State is the real loser even if attempt to unwind Quinn asset-stripping scheme is successful
In essence, the bank has decided the Quinns are not going to help it gain control of the assets and, therefore, the bank has cut a deal with the Alfa Group to help it thwart the Quinns’ scheme.
As part of this, the bank has entered an agreement that will see the Russian group get about 35 cent for every euro of value recovered. This translates into a loss to the exchequer of more than $100 million if assets worth more than $300 million are recovered. After costs, Alfa will get the first $31 million seized. Thereafter differing splits have been agreed between Alfa and the bank. The objective does not appear to include the retrieval of the missing rent.
If the bank is correct in its belief that the assets are under the control of the Quinn family, then the tens of millions of dollars already taken from the group are likely to be held for their benefit.
The bank may yet take further contempt proceedings in an effort to put more pressure on the family to unwind the asset-stripping scheme, though the appointment of Alfa would appear to indicate it has chosen a different tack.
It is noteworthy that the bank’s agreement with Alfa includes an agreement that any evidence of asset-stripping activities uncovered will be made available to the bank in a manner that “preserves its evidential integrity”, according to Woodhouse.
In his lengthy affidavit to the court, Woodhouse made a number of references to fraud.
“IBRC has been met with fraudulent activity and delays which I believe to have been orchestrated by the defendants,” he said. The bank has been hampered by “the fraudulent activities of the defendants, their servants or agents”. Alfa has experience in “recovering fraudulently alienated assets”. The engagement of Alfa is an indication of IBRC’s determination to “recover the assets and uncover the fraud”. The bank has also mentioned fraud in its dealings with the High Court in Belfast.
Under the Criminal Justice Act 2010, the bank is obliged to report suspected criminal offences to the authorities. It would seem to follow that the Garda, and possibly the PSNI in Northern Ireland, have been notified by the bank of its concerns.
If the bank is correct in its suspicions, the Quinn asset- stripping scheme has seen it benefit to the tune of a significant fortune, even if the properties being targeted by Alfa are recovered. The loser has been the Irish State.