Quinn family fight against Anglo closest yet to banking inquiry
Material given to the Quinn family, in its battle with the former Anglo Irish Bank, indicates what would be revealed in a banking inquiry
Seán Quinn Snr with daughter in law Karen Wood and daughter Aoife. Photograph: Cyril Byrne
Donal O’Connor, former non-executive director of Anglo. Photograph: Matt Kavanagh
An indication of the type of material that would emerge were a banking inquiry ever established is contained in an affidavit sworn earlier this year by Aoife Quinn, daughter of the former billionaire, Seán Quinn snr.
The Quinn family, in its battle with the former Anglo Irish Bank, has been given access to a swathe of material as a result of an order of discovery granted by the courts in July of last year.
One of those documents, called the O’Connor Report by the Quinns, is dated January 9th, 2009, and was prepared by Anglo executive Pat Whelan for Donal O’Connor, a non-executive director of Anglo and an accountant with PricewaterhouseCoopers, who was appointed executive chairman of the bank in December 2008 following the departure of chairman Seán FitzPatrick. O’Connor’s appointment was made following consultations with the then minister for finance, the late Brian Lenihan.
Aoife Quinn makes repeated use of the report to support the family’s case that, after Seán Quinn snr told the bank in September 2007 that he had a secret 24 per cent stake in Anglo, held by way of contracts for difference (CFDs), the bank told the Financial Regulator about it and then worked with the regulator as it set about handling the explosive situation, one which threatened not just Anglo but the entire banking system.
The family’s argument is that the billions of euro in funding that Anglo put into shoring up Quinn’s CFD position, as the bank’s share price plummeted, was illegal and that, for this reason, the family cannot be held accountable for the resulting €2 billion plus debt. The bank, which was nationalised in January 2009 and became part of the Irish Bank Resolution Corporation, which is now in liquidation, disputes the family’s claim.
As the bank’s share price plummeted, Quinn was obliged, under the terms of his CFDs, to put more cash into his investment. Aoife Quinn uses the O’Connor report to document how this occurred and to support the family’s claim that, although the bank described the funding as being for “working capital”, it knew the money was being used to fund the CFD positions and, thereby, to support the bank’s shares.
A facility letter, dated June 3rd, 2008, refers to €140 million being used to fund the capital requirements of the borrower and its subsidiary companies in respect of property holdings in Russia, India, Ukraine, Turkey, the UK and the Czech Republic.
Solutions in a crisis
However, a corresponding note to the bank’s credit committee gives some background: “Seán Quinn has built up a large shareholding in Anglo Irish Bank through CFDs using a special purpose vehicle . . . Seán Quinn has requested the bank to provide funding in the amount of €140 million. This is to be used to fund cash calls relating to the recent fall in the Anglo share price.”