Quinn payout of $23m on oil firm shares in doubt
A $23 MILLION (€18.7 million) payout to businessman Tony Quinn is in doubt after a court found he was not validly appointed as director of an oil firm.
Although Mr Quinn has served on the board of International Natural Energy (INE) since 2007, he was never properly appointed, according to a judgment from the Eastern Caribbean Supreme Court in the British Virgin Islands.
There was a serious question over the allotment to Mr Quinn of 64,000 shares worth $23 million, the ruling by the court’s commercial division found. It described as “clearly excessive” INE’s spending of $1.8 million on security and surveillance which was allegedly justified by a need to protect Mr Quinn and other directors from their enemies.
“Whatever may have been the need for some personal security, the expenditure was made in very large part for the purposes of Mr Quinn, who appears to have hired what amounted to a private army at the sole expense of INE,” Mr Justice Edward Bannister stated.
The court sat for nine days last month in a case brought by a founder of INE, Sheila McCaffrey, against Mr Quinn, the company and its chairwoman, Susan Morrice. Ms McCaffrey alleged Mr Quinn and Ms Morrice siphoned off money from the company for their own uses after squeezing her out.
They denied her claims and alleged Ms McCaffrey was suspended as a director because she was impossible to work with.
Ms McCaffrey and Ms Morrice, along with most of the small shareholders, are Irish people who attended Mr Quinn’s Educo mind seminars.
The judge described Mr Quinn as “a highly controversial figure both in the Republic of Ireland and further afield. He runs what he calls Educo seminars, which people are persuaded to attend at very high cost.”
He described the business structure Mr Quinn promotes as “no more than advice to promote better employees in preference to inferior ones” and noted Mr Quinn “claimed” to have a doctorate and degree in hypnotherapy and a master’s degree from the University of East London.
Mr Justice Bannister said there appeared to be a body of opinion which was passionately opposed to Mr Quinn, to the point where campaigns were run against him in the media and he had been subjected to “serious intimidation”.
He said Mr Quinn’s appointment to the board in 2007 was “plainly invalid” and there was a “serious question” about the purported allotment of shares to him.
INE’s subsidiary, Belize Natural Energy, has been, the judge noted, “astonishingly successful” since striking oil in the Central American country in 2005, but had been racked by disputes since.
Mr Justice Bannister found Mr Quinn gave no consideration for his 64,000 shares. He described a letter allegedly inviting him to accept the shareholding as a “clumsy forgery” and an “after-the-event concoction written in an unsuccessful attempt to legitimise the allotment”.
He rejected claims by Ms McCaffrey that Mr Quinn had advocated “sharp business practices” and scams, saying the claims were designed to blacken his reputation. He said Ms McCaffrey was progressively sidelined and then excluded from the management of BNE. There was no power to suspend a director, he found.
INE has never paid a dividend but has released loans to some shareholders. The judge found this loan release scheme was a “bizarre arrangement” designed to punish shareholders of whom Mr Quinn and Ms Morrice disapproved.
Ms Morrice spent far more of the company’s money than was commercially justifiable on travel and security, but “outright theft” was not shown, he said.
Mr Justice Bannister declined to order the company to purchase Ms McCaffrey’s shares and refused to dissolve the company. He granted a declaration that Mr Quinn was never validly appointed and that Ms McCaffrey was never validly suspended.