The family of former billionaire Seán Quinn has filed a legal action seeking €4.5 billion from the State to compensate it for the loss of its business empire following alleged illegal lending by Anglo Irish Bank.
The family, according to a statement of claim delivered yesterday, is suing the Central Bank and the Minister for Finance as well as 10 former directors of Anglo. It is expected that these claims will be vigorously defended.
The family is not suing former Anglo chairman Seán FitzPatrick, or the bank's former chief executive, David Drumm.
The Quinns allege the defendants, their servants, and/ or agents “conspired to commit illegal and/or unlawful acts through breaches of section 60 of the Companies Act 1963 and the Market Abuse Regulations 2005”. These claims have already been denied by former Anglo directors.
In a 28-page statement of claim, the family accuses the Central Bank of failing to fulfil its statutory duties to ensure Anglo “acted within the law and did not commit criminal and/or unlawful acts”.
It also accuses the Central Bank of knowing, encouraging and allowing Anglo lend more than €2 billion to the Quinn Group and family entities as "convenient vehicles for the purpose of the artificial support of the Anglo share price", contrary to market abuse regulations and the Companies Act.
The family accuses the bank of breaching its obligations as regulator “grossly, wilfully and in bad faith”. They also claim it was “party to deceiving the market for Anglo shares and conspiring with others to so deceive the market”.
These claims too have previously been denied by directors of Anglo.
The Central Bank was involved in “concealing the true market value of Anglo”, the Quinn family claims.
It permitted Anglo to lend so much money to it, the family says, that it breached the EU directive on the monitoring and control of large exposures of credit institutions.
The Quinns also claim the Central Bank was involved in a “conspiracy” with the Minister for Finance and the former board of Anglo that allowed the bank illegally lend them so much money that the family lost control of an empire the family says was independently valued at €4.5 billion in 2007. This has also been previously disputed.
The family accuses the office of the Minister for Finance of “misusing his authority, power and influence” and that the office unlawfully exerted influence and pressure to force the regulator and Anglo to lend to the Quinn family. The Minister acted “in the knowledge and/or reckless disregard that their activities would probably injure” the family, they allege.
The former board of Anglo is accused of not only allowing alleged illegal lending but also of “inducing” the staff of Anglo to “falsely record” lending to the Quinn family and of “failing” to keep minutes of “multiple discussions” about lending to them. These allegations have also been previously denied by former board members of Anglo.
The family claims it lost control of its business empire only because Anglo “illegally” lent the Quinn Group and other companies €2.34 billion. Anglo has previously contested this claim.
It says Anglo enforced illegal share pledges by the family to seize control of both the Quinn Group and the family’s other assets. This has also been denied by Anglo’s former directors. “We will robustly be defending our position,” the Central Bank said last night.
"We received the papers today. We will take whatever action is required," a spokesman for the Department of Finance said.
Directors of Anglo could not be contacted for comment.