Court hears Seán Quinn laid all his eggs ‘in one basket’

Punt meant ‘bank joined with Seán Quinn at hip’

Former Quinn Group chief executive Liam McCaffrey leaving Circuit Criminal Court after yesterdays sitting of the Anglo Irish Bank case. Photograph: David Sleator

Former Quinn Group chief executive Liam McCaffrey leaving Circuit Criminal Court after yesterdays sitting of the Anglo Irish Bank case. Photograph: David Sleator

Fri, Feb 7, 2014, 01:00

Brendan Grehan, senior counsel for Patrick Whelan, Anglo Irish Bank’s former managing director lending Ireland, cross-examined former Quinn Group chief executive Liam McCaffrey yesterday afternoon in the Criminal Courts of Justice.

McCaffrey had earlier been taken through the sequence of events around how Seán Quinn ended up borrowing so much money from Anglo Irish Bank by prosecuting counsel Úna Ní Raifeartaigh SC.

“We need to go back over matters in a bit more detail,” Grehan said, however.

He asked McCaffrey where was his job relative to company founder Seán Quinn.

“On top of me if I can put it like that,” McCaffrey said. “Seán Quinn was the boss,” he explained.

McCaffrey agreed that Quinn had initially invested in shares based on his opinion of their senior management using an offshore company owned by his children called Bazzely Ltd.

Michael O’Leary of Ryanair and David Drumm of Anglo Irish Bank he agreed were two examples of company leaders Quinn admired.

Grehan asked McCaffrey when did he believe Quinn first began to prefer using contracts for difference, a financial instrument, versus buying shares to invest.

McCaffrey said he was not sure but he believed “brokers in London” had introduced the Fermanagh businessman to the idea.


‘Enamoured’ of CFDs
Grehan contended Quinn had gradually become “enamoured” of CFDs. “Clearly it ended up that way, yes,” McCaffrey said.

Grehan asked McCaffrey had a “laying all ones eggs in one basket type of situation,” developed in relation to Anglo. “Yes,” McCaffrey replied.

McCaffrey said the Quinn Group had made profits of up to €500 million during the boom. He said the Quinn Group had never formally valued itself so he was unable to agree with Grehan’s contention it was worth €5 billion.

“I saw figures in the paper,” he said.

Grehan asked McCaffrey what would have happened if Quinn had been unable to fund his margin calls in relation to his CFDs.

“If funding hadn’t been forthcoming, the course of action would have been to close out the positions,” McCaffrey said. Quinn did not want to do this.

“I think his view of the scale of the recovery changed, but ‘How low can it go?’ was one comment I remember him making.”

Grehan put it to McCaffrey that the scale of Quinn’s punt meant “effectively the bank was joined with Seán Quinn at the hip”. “I don’t really know,” McCaffrey replied.

Grehan said Quinn had continued to increase his CFD position in Anglo even after it became a “major problem” for him in late 2007.

“I think he did, yes,” McCaffrey replied.