A ploy that ranks high in the league of Irish scandals
ANALYSIS: The Quinn family is claiming that the debt is ‘tainted with illegality’ and that, as a result, it does not have to be repaid
THE EFFORTS of Seán Quinn and his family to put assets worth about €500 million beyond the reach of State-owned Anglo Irish Bank belongs high up in the premier league of Irish scandals.
If successful, the ploy would have seen family members ending up as multimillionaires while society laboured to pay off their debts by way of increased taxes and reduced public services.
Members of the family have admitted in sworn evidence that they set out to place their international property portfolio beyond the reach of State-owned Irish Bank Resolution Corporation, which now incorporates Anglo.
This is despite the fact that there is no dispute over the bank’s claim that it has legal security over Quinn property-holding companies that, in turn, own shopping centres, office complexes and logistics parks in such places as Kiev, Moscow and Hyderabad.
The security was given in return for loans worth hundreds of millions of euro that were issued by Anglo and that the family cannot now repay.
IBRC says the family owes it €2.88 billion. The family disputes this, saying much of this debt was issued as part of an illegal scheme to shore up the Anglo share price at a time when the bank was in danger of collapse. The family is claiming that the debt is “tainted with illegality” and that, as a result, it does not have to be repaid.
The key point, however, is that the family’s claims in this regard have yet to be heard by the courts.
Nevertheless the family, by its own admission, initiated a covert scheme to put the properties beyond the reach of the bank by moving them outside the holding company structure over which the bank has security.
Furthermore, although a large part of the debt being claimed by the bank is disputed by the family, there is no dispute over loans of about €455 million, a fact noted by Ms Justice Elizabeth Dunne in her contempt judgment yesterday.
Instead of trying to deal in a straightforward and upfront way with this debt, the family has instead sought to render valueless the bank’s legal security.
“The behaviour of the respondents outlined in evidence before me is as far removed from the concept of honour and respectability as it is possible to be,” the judge said.
In June and July last year, Mr Justice Frank Clarke, following an application to the courts by IBRC, ordered the family to stop its efforts to put the assets beyond the bank’s reach.
Ms Justice Dunne, in her reserved judgment yesterday, agrees with the bank’s claims made earlier this year that Seán Quinn, his nephew Peter Darragh Quinn and his son, Seán Quinn jnr, continued in their efforts after the orders from Mr Justice Clarke to desist were issued.
The family’s scheme came undone after it emerged that a Belize company, Galfis, to which the right to a large amount of money associated with a Moscow office block was purportedly assigned in April of last year, before Mr Justice Clarke’s order, was only a shelf company at that time. The right to the funds, it emerged, could only have been assigned after the orders of Mr Justice Clarke.
Other evidence emerged that contributed to yesterday’s decision, which was arrived at the level of proof of being beyond a reasonable doubt.