Swiss group sought to buy Quinn assets

The Irish Bank Resolution Corporation was approached in August about selling the foreign properties formerly owned by the Quinn family, according to agent of a Swiss asset management group.

Dr Thomas Borer said he was surprised by the lack of interest in his approach on behalf of Corestate Capital, which wanted to buy the assets from the bank, then set about seizing them through the Russian courts.

The approach from Dr Borer was one of many private expressions of interest IBRC received over the past year. It decided early on that it would not offer the assets by way of public tender. The bank is entering into a deal with the Alfa Group, one of the largest private conglomerates in Russia, which involves the sharing of the proceeds of any assets recovered.

The properties are worth up to $500 million, although they may be worth substantially less because of the Quinn asset-stripping scheme.

Quinn assets

Dr Borer, a former Swiss ambassador to Germany, wrote to IBRC’s chief executive, Mike Aynsley, in August, saying he acted for clients who were interested in the Quinn assets. “I would like to find out if there is an interest on the part of the IBRC in selling these assets.”

Two weeks later he wrote to Stephen Kenny, an IBRC executive. By this stage he had revealed that he was acting for Corestate Capital, a Swiss asset management group with property assets of €2 billion.

“Because of our extensive network and experience in Russia, and since we already executed similar transactions, we are convinced [we are in a] position to take over the assets.”

Litigation

On September 10th, Mr Kenny suggested they park their discussion as the bank was engaged in extensive litigation over the assets. Subsequently, progress that the bank was making by way of the Russian courts was reversed by a further court ruling.

IBRC then decided to do a deal with the Alfa Group asset recovery arm A1, a move that was approved by its board and by Minister for Finance Michael Noonan. The fact of the proposed deal with A1 was revealed to the courts on Thursday, November 1st.

On November 6th, Dr Borer wrote to Mr Aynsley, copying the letter to bank chairman Alan Dukes and Mr Kenny.

“I am very surprised that IBRC is now about to conclude an agreement with the Russian A1 Group with a view to enter a long and insecure process to partly recover the disputed assets – without even discussing with us the possibility of a fast and profitable transaction.” He said the agreement with A1 involved a “very generous profit” for the Russians, even if the recovery took years.

“I wonder if this kind of agreement is in the best interests of IBRC, your shareholders and the Irish taxpayer. Would it not make more sense to sit down with Western investors and accept a serious offer with immediate payment?”

Dr Borer said he was mandated to make Corestate’s offer public if needed. Mr Aynsley responded on November 7th saying the bank had considered numerous alternative recovery strategies and had concluded that a joint venture with A1 was the best economic outcome for the bank and the taxpayer.

“It is the bank’s policy not to continue relations with organisations that attempt to apply pressure by threatening to make communications public,” he added.

An IBRC spokesman said it received many expressions of interest from intermediaries and principals in relation to recovering the Quinn assets.

“Fundamental to the bank’s decision-making process in this regard was the quality and financial strength of potential partners, their track record in recovering value from distressed and disputed assets in both Russia and the Ukraine and advice the bank received from numerous independent government and non-government sources in these jurisdictions.”