Quinn retraces decisions that led to demise of business empire
Businessman says he was a ‘fool’ over Anglo dealings
“At the time we only spoke about putting a toe in the water, but I’m afraid the whole head, feet and neck went into the water,” Mr Quinn told the court of his dealing with Anglo. Photograph: Frank Miller
On the stand yesterday in day four of the Anglo trial, Seán Quinn’s striking gold tie and neat dark suit was a reminder that he once ran a vast business empire.
Senior counsel Brendan Grehan, defending former Anglo executive Patrick Whelan, took this as his starting point.
Grehan asked Quinn to recall his group’s slogan “Strength through diversity”, which he did.
When did Quinn move from buying shares to using contracts for difference, a way of betting on share movements, Grehan asked.
Quinn could not recall.
“At the time we only spoke about putting a toe in the water, but I’m afraid the whole head, feet and neck went into the water,” Quinn said.
He added he didn’t see his investments in CFDs as “speculative at all”– they were part of a wider business strategy.
“That was me, that was Seán Quinn,” Quinn said, when asked who gave the instruction to invest in Anglo.
Quinn admitted he sold out of “good” companies to put more on Anglo. By March, 2008, “we had thrown the kitchen sink at [Anglo]”.
Quinn was asked when he had first told Anglo of his sizeable position in its shares. He said he done so over dinner with David Drumm, Anglo’s chief executive, in the Slieve Russell some time in 2007. Grehan said this fact was not previously known.
Quinn was then asked about his meeting with Drumm and Seán FitzPatrick, Anglo’s former non-executive chairman, in the Ardboyne Hotel in Co Meath on September 11th, 2007.
Quinn said it was correct to say he felt the two men were not happy about his then 24 per cent position in Anglo shares.
“They made it very clear that if our shares went on the market, the share price would collapse.”
Grehan put it to Quinn that by building such a large position on Anglo he had created an “artificial market” and created a situation where people could “do the opposite” and bet against Quinn and Anglo.
“That did happen,” Quinn acknowledged. “Yes,” he replied, when Grehan asked him if hedge funds had bet against him because of his “vulnerable” position in holding such a large stake in one stock.
“With perhaps catastrophic effects for the bank?” Grehan asked.
“Yes,” Quinn replied.
Grehan asked Quinn what was the “logic” behind his decision to increase his stake by 4 per cent to 28 per cent in the months after Ardboyne.
“I thought it was an opportunity to buy shares,” he said.
Grehan asked Quinn to detail how he had borrowed €500 million in December 2007 from Anglo. Quinn agreed he had rung Drumm and told him he had a “hole” in his company accounts and had lost €1 billion on Anglo’s shares. Quinn said this “hole” was €400 million. He said he did not ask Drumm for any money.