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Vultures leave their carrion to resurrectionists

By Frank Connolly

So Johnny Ronan is back on top of the heap. According to the Sindo, the “maverick” developer is about to storm the most lucrative real estate sites in Dublin and London, with the help of US and Asian funds. The man with the magic touch has paid back €400m to get out of the clutches of NAMA with the help of US private equity group, Colony Capital, and international bank M&G.

So far so good for Johnny who will not waste our time moaning about his treatment by the ‘bad bank’, misguided as he suggests it was in relation to the seizure and sale of the Battersea power station in London which he and Richard Barrett saw as their “master plan” to survive the property crash at home.

We are informed that whatever he thinks of NAMA it “wouldn’t be fit for print.” The newspaper (5th April) also suggested that a report published in a “national newspaper” last year had almost scuppered Johnny’s plans when it “made reference to political corruption and false accusations against Mr Ronan of fraudulently stripping assets from his previous business, Treasury Holdings”.

Despite an apology the damage was done until the Colony boys came riding over the horizon to re-finance his NAMA loans of €300m. It is unclear what Ronan had to offer in order to attract the likes of Colony, a real estate trust with global investments of more than $60bn. Surely he must have brought more to the table than his undoubted charm and experience in the property game.

The 1991 founder of Colony Capital, Thomas J Barrack is certainly no pushover and previously served in the Reagan administration as Deputy Undersecretary of the Department of the Interior. In 2010, French president Nicolas Sarkozy awarded him France’s Chevalier de la Légion d’honneur, no less.

Meanwhile, the former nemesis of the Treasury pair, Garrett Kelleher has his own story to tell about dealings with former NAMA board member, John Mulcahy, the real estate agent who helped blow up the bubble before it burst some seven years ago and then joined the agency to help sort out the mess in the banks as its head of asset management.

Kelleher has alleged that he was promised by Mulcahy (who joined fast-growing property-pension fund, IPUT six months after leaving the agency last year) that his €46m in personal guarantees would not be called in if he co-operated with the agency.

That conversation was in a pub in September 2009, just as the bad bank was being set up and encouraged Kelleher, he says, not to declare “quick and easy” bankruptcy in the US. NAMA insists that no such assurances were given then, or later by different officials in 2010 after the agency was set up. NAMA went on to sell loans it acquired from Kelleher’s aborted Chicago Squire project at below market price, the developer claims, which hampered his ability to repay the personal guarantees and other debts held by the agency.

Those who have followed the fortunes of these brave masters of the universe over the decades will, no doubt, see the irony in these recent developments. Back in the day, when Kelleher was building a hotel on Parnell Street it was none other than Treasury Holdings that used a piece of land on historic Moore Lane as a “ransom strip” to block their rival.

It was alleged at that time in the late 1990s that Richard Barrett “had his foot on” Kelleher’s head, if necessary, to block his plans. Treasury went on to threaten the Sunday Business Post for many millions in damages (a multiple of what the paper was worth) for reporting a statement made at a hearing of An Bord Pleanála to the effect that the company was able to block any planning development in Dublin due to its influence at the higher levels of political authority. It never proceeded with the writ against the Post.

When it came to the crash, of course, Ronan became the poster boy for the hubris left in its wake and he found that his political and banking contacts were not what they used to be. Nonetheless, he and the less visible Barrett who spends a lot of time in the Far East these days, have emerged from their long battle for survival, albeit that Treasury Holdings and the  taxpayer were not so lucky.

Meanwhile, the various vulture funds who invested in the depressed Irish property market in recent years are now apparently rushing to cash in and move on, with healthy returns, perhaps leaving the market once again to some familiar if older-looking faces. •