Nama had ‘prejudicial approach’, Johnny Ronan claims

Developer alleges members wanted to ‘take down’ Treasury Holdings

Johnny Ronan's 28-page submission to the Oireachtas banking inquiry, published yesterday, lifts the lid on his business activities up to 2008.

It also covers his dealings with the National Asset Management Agency after it was set up in 2009 to take toxic property loans off banks' balance sheets.

Ronan, who is now free from Nama, runs a company called Ronan Group Real Estate (RGRE), a property company involved in income-producing prime office and retail investments rather than house building.

It began life as Ronan Group Ltd, a family company established by his father in the early 1970s.


This was run separately to Treasury Holdings, a development group that Ronan co-owned with Richard Barrett.

Ronan told the inquiry that between 2001 and 2008, RGRE employed five people directly; the others being chief operating officer Deirdre Lemass, a financial controller/accountant and two administration staff.

These were supplemented by a “small circle” of professional advisers to assist with “every aspect of the business”.

Its advisers included law firms Arthur Cox and McCann FitzGerald and accountants KPMG and Cooney Carey.

At the end of 2008, soon after the collapse of Lehman Brothers and the Government's blanket bank guarantee, RGRE's debt was €330 million.

Its assets under management were valued at €850 million, giving an overall loan-to- value ratio of 39 per cent.

Some 45 per cent, or €148.5 million, of this debt was held by Bank of Ireland, with AIB holding 32 per cent, or €105.6 million, and Anglo Irish Bank 16 per cent, or €52.8 million.

The balance was divided between First Active/Ulster Bank, Permanent TSB and Bank of Scotland (Ireland).

Paris office

In geographic terms, 96 per cent of the debt related to the Republic with 4 per cent in France connected with a property at Rue Cimarosa in Paris where the head office of BNP Paribas bank was situated.

Ronan’s submission states that 87 per cent of its debt was commercial and income-producing, with 9 per cent related to zoned development land, and 4 per cent to income producing residential.

“RGRE did not own any un-zoned lands and therefore had no necessity to lobby any [political] party to achieve zoning,” he said.

The company’s turnover, which related to rental income on investment assets, rose from €8.2 million in 2001 to €25.7 million by 2008.

These were the reference years used by the inquiry.

According to Ronan’s submission, RGRE paid annual interest of about €14 million and had annual surplus income less interest of around €12 million.

The interest cover ratio was 1.81 and RGRE had cash reserves of more than €50 million.

The list of buildings developed by RGRE and its joint venture partners included the Treasury Building on Grand Canal Street, which houses Nama; Bewley’s cafe on Grafton Street; 70 and 116 Grafton Street; Connaught House, home to Treasury Holdings; and Embassy Buildings on Burlington Road.

Ronan states that during the property crash RGRE was “forced” by Nama to sell properties such as 30 Herbert Street, Dublin 2, and 3 Burlington Road, Dublin 4.

“The sales . . . resulted in significant capital gains tax liabilities for RGRE,” he said. “Thankfully, RGRE has managed to retain the balance of the buildings through its recent re-finance out of Nama.”

The primary collateral provided by RGRE to its banks was a first legal charge granted over the particular asset.

In some cases, cross collateralisation of assets and/or companies within the group was required.


Ronan estimated

interest roll-up equivalent to about 1.3 per cent of RGRE’s overall debt would have been provided for facilities relating to development assets between 2001 and 2008.

After the property and banking crash, RGRE’s loans were transferred to Nama, as were those of Treasury Holdings.

Ronan’s statement to the inquiry details how the relationship between the parties began well but then “deteriorated significantly”, resulting in the enforcement action by Nama against Treasury and a protracted dispute between the two.

He is scathing about Nama.

“I firmly believe that certain individuals within Nama decided that they did not want to work with Treasury Holdings, its shareholders and/or its management team and that they would take it down, whatever the consequence,” he claimed.

Ronan claims it had a “prejudicial approach” to Treasury and a “stifling effect on the Irish property market”.

In response, Nama said: "These and other contentions have been comprehensively considered by the High Court which ruled in Nama's favour."

Treasury floundered as a corporate entity but RGRE is back in business. “RGRE recently exited Nama, having repaid its debt in full and is now firmly focused on re-building its business and constructing quality buildings to meet the widely publicised scarcity in supply in Dublin,” he said.

Ciarán Hancock

Ciarán Hancock

Ciarán Hancock is Business Editor of The Irish Times