State is the real loser even if attempt to unwind Quinn asset-stripping scheme is successful
ANALYSIS:The cost of recovering Quinn assets means the State faces a long road
THERE ARE strong reasons for believing that the disaster that is the Quinn family asset-stripping scheme has a long way to run yet.
The extraordinary fact is that the family admits that it set out to put an international property group worth up to $500 million (€389 million) beyond the reach of the State-owned Irish Bank Resolution Corporation (IBRC), even though that bank had security on it.
The family paid $1 million to a firm of Moscow lawyers, Attorneys and Business, and also engaged a firm in Dubai called Senat, as part of the scheme.
The bank believes that even after the High Court ordered last year that the family desist, members of the family continued to implement the scheme, and continue to implement the scheme. Seán Quinn snr has now gone to jail for contempt for continuing the scheme after these orders, and his son has already served a three-month sentence.
IBRC executive Richard Woodhouse told the court on Thursday the bank believes the Quinns continue to seek to put the assets beyond reach and that it is the bank’s view that the family “has no intention of abiding by the orders” of the court or reversing the asset-stripping scheme.
The bank thought it was making progress in its efforts in Russia, but more recently these advances have been reversed.
Having won control of the valuable Kutuzoff Tower in Moscow in July, by way of a Russian court, it lost control again on October 11th. The company that runs the towers has $8 million in cash in its bank accounts. Furthermore, because it has lost control of the Russian company, efforts the bank’s administrator began last July to reverse “a series of large cash payments” the bank believes were made for bogus reasons will now most likely be abandoned. Likewise with efforts initiated to retrieve money paid to family members as “purported salaries”.
The tower is worth up to $180 million, while other Russian assets are worth up to $205 million. A shopping mall in Ukraine is worth up to $50 million. The whereabouts of about $45 million in rental income from these properties in the period since the Quinns launched their asset- stripping scheme are not clear.
It is because of the series of bizarre moves that have frustrated the bank over the past year that it has engaged the services of the $59.9 billion Alfa Group. The Russian group is a substantial player in Russia and Ukraine and “any individual or organisation will be wary of being in conflict with such an influential player”, according to Woodhouse. The group is “best placed to counteract any instances of local corruption” it encounters.