Quinn family gambling again, this time with their liberty
THE BOTTOM LINE:Quinn in effect called ‘pot’ many times on the Anglo share price, lost and, cash-strapped, turned to Anglo as his ATM, writes SIMON CARSWELL
WE USED to play a card game in college called “In Between”. It’s a simple game. Everyone ponies up a euro or two to start with a decent-sized pot. Two cards are dealt face up and each player bets an amount, or not at all, that the third card will be “in between” the two. So if a two and a king are dealt, the third card dealt is most likely to be “in between”.
More often than not, a player could call “pot” when this happened and if a three was drawn, for example, the player took the pot. If it was an ace, the player would have to pay in their bet or the pot if they bet that sum.
If a two or a king were drawn, however, the player had to stump up double what was in the pot. This made the game exciting and nerve-racking. It was harmless fun and rarely did the pot go over a tenner when we played.
But the nature of the game meant the stakes could rise very quickly. A pal recalled playing one time when a player was driven to an ATM when a “pot” bet backfired and he didn’t have the cash to cover the loss.
The downfall of businessman Seán Quinn into bankruptcy and the threat of jail in the contempt proceedings taken by the former Anglo Irish Bank can be traced back to his reckless bet on the bank’s share price.
Had he not lost €3 billion on Anglo, he would not have had to dip in the cash reserves of his insurance company to cover his early gambling debts; he and his company would not have been fined a combined record amount by the Financial Regulator as a result; he would not have had to borrow more than €2 billion from Anglo to cover his later gambling debts; he might not have lost control of Quinn Insurance; he might not have been ejected from his Quinn Group; and he might not be “dealing with the risk to his liberty” as his new lawyer put it in court last week.
His side has maintained, as many small shareholders could also argue, that Anglo hoodwinked him, presenting its financial position to be far healthier than it actually was as markets turned against it during the start of the financial crash in 2007 and 2008.
Quinn and many others may have a case here, but Quinn is being kind to himself. His decision to invest so heavily in the bank, up to 28 per cent at its peak, and by way of a contract for difference (CDF), whereby he only put up a small cash proportion of the overall bet (between a fifth and a third) and was exposed to either the full profits or losses, meant he was betting with borrowings, not cash he had. Quinn in effect called “pot” many times on the Anglo share price, lost and, cash-strapped, turned to Anglo as his ATM.