Quinns ‘doing what they were told’ over Anglo holding

Anglo shares held in Cyprus to maximise tax efficiency, Quinn financial director says

Former financial director of the Quinn Group Dara O’Reilly who gave evidence today in the trial of three former Anglo directors who have all pleaded not guilty to providing unlawful financial assistance to 16 individuals in July 2008 to buy shares in Anglo Irish bank. Photograph: Collins Courts

Former financial director of the Quinn Group Dara O’Reilly who gave evidence today in the trial of three former Anglo directors who have all pleaded not guilty to providing unlawful financial assistance to 16 individuals in July 2008 to buy shares in Anglo Irish bank. Photograph: Collins Courts

Thu, Mar 20, 2014, 15:14

The former financial director of the Quinn Group has said the Quinn family was “doing what they were told to do” when their holding in Anglo Irish Bank was unwound.

Dara O’Reilly told the trial of three former directors of the bank he believed businessman Sean Quinn was not happy about the unwinding. His view was that the value of Anglo Irish Bank shares would recover, Mr O’Reilly said.

He told the court he was involved in the execution of the deal to unwind the Quinn’s contracts for difference (CFDs) – investment products based on share price – in July 2008.

The Quinn children bought 15 per cent of the shares in the bank and the Maple 10 businessmen bought 1 per cent each.

Mr O’Reilly said he liaised with Morgan Stanley, the investment bank handling the unwind, in relation to documentation and he also liaised with Anglo in relation to the facility letters for the loans to buy the shares.

Paul Anthony McDermott BL, for the prosecution, asked who was giving the direction in terms of the deal.

“Quinn was doing what they were told to do,” Mr O’Reilly said.

Mr McDermott asked who decided the deal should take place over that weekend, of July 12th.

“That would have been Anglo,” Mr O’Reilly said.

Seán FitzPatrick (65) of Greystones, Co Wicklow; William McAteer (63) of Rathgar, Dublin; and Pat Whelan (51) of Malahide, Dublin, have been charged with 16 counts of providing unlawful financial assistance to 16 individuals in July 2008 to buy shares in the bank, contrary to section 60 of the Companies Act.

Mr Whelan has also been charged with being privy to the fraudulent alteration of loan facility letters to seven individuals. All three men have pleaded not guilty to the charges.

Mr O’Reilly said the shares bought by the Quinn children went to a trust account and after a few months, a new corporate structure using Cypriot companies was developed for the shares. This was for tax efficiency reasons, he said.

He also agreed that the company that held the Anglo CFDs, Bazelly Ltd, was incorporated in Madeira to ensure tax efficiency.

Patrick Gageby SC, for Mr McAteer, suggested the Anglo shares were moved to Cyprus to maximise the “non-taxable returns” for the Quinn children, if possible.

Mr O’Reilly said it was to maximise returns for further investment.

“That was always the strategy,” he said.

Under cross-examination from Lorcan Staines, for Mr Whelan, Mr O’Reilly confirmed he provided the Quinn children with the documentation to sign for the loans from Anglo to buy the shares.

Mr Staines said it puzzled him that some members of the Quinn family had taken the stand and said they were not aware of the loans until 2010.

“I would have taken my direction either directly or indirectly from Sean Quinn senior,” Mr O’Reilly responded.

But he agreed he did provide the Quinn children with the documentation for signing.

Also this morning, Colin Morgan, chief executive of Quinn Insurance until 2010, gave evidence of his role in the preparation of a press release that would announce the Quinn family’s purchase of Anglo shares and the unwinding of their CFDs.

He said he did not know whose idea it was to issue the release or who drafted the original version, but he was asked to circulate it to Morgan Stanley. He agreed to some changes of the first draft, he said, and he would have gotten approval for this from either Mr Quinn or Liam McCaffrey, former Quinn Group chief executive.

The case was adjourned to next Monday. Judge Martin Nolan told the jury the court had to decide on certain issues.