Lenihan to insist Quinn pays back €2.8bn debt
Minister gets tough on tycoon over outstanding Anglo loans
Published 04/10/2010 | 05:00
FINANCE Minister Brian Lenihan is to insist that Sean Quinn repays €2.8bn of debts to the taxpayer.
Mr Quinn and his family personally borrowed the money from Anglo Irish Bank -- but that debt is now effectively owed to the Irish taxpayer since the bank was nationalised.
The Irish Independent has learnt the bank is entitled to pursue personal assets owned by Mr Quinn -- once Ireland's richest man -- and his family to recover this money.
The bank forced Mr Quinn and family members to give personal guarantees on a portion of the huge debt and consequently could try and seize their personal assets.
The bank has written off €2.3bn of the €2.8bn loans but is still entitled to go after Mr Quinn and his family for the full amount.
However, whatever happens, only a portion is likely to be recovered on such a large sum.
"You can't draw blood from a stone," said a senior source familiar with the Quinn situation last night.
Mr Quinn's best hope of meeting his debts -- by using the profits generated by his Quinn Group of companies -- looks set to be dashed.
All the profits from this company will have to go to other lenders for the foreseeable future and Mr Quinn could even lose control of the company forever as hard-nosed hedge funds from the US look to take it over.
Some 33 of these funds are now owed money by the Quinn Group.
Despite all these difficulties, it emerged that Mr Lenihan is determined the bank should pursue Mr Quinn and his family to recover all possible debt.
A Department of Finance spokesman said the department's position was that all of Anglo's debts had to be recovered.
"The instruction to Anglo is to take all steps to recover the amount of money," he said.
The department was unable to say last night if Mr Lenihan had been required to sanction the writing off of the Quinn debt by Anglo Irish Bank.
Anglo has written off the Quinn money because the main security behind the loans is shares in the Quinn Group and Anglo has decided these are effectively worthless at this point.
A spokesman for the Quinn family declined to comment yesterday, as did Anglo Irish Bank, when contacted by the Irish Independent.
The news of Mr Quinn's financial problems has caused alarm in the border region, where his companies employ thousands of people.
Labour finance spokeswoman Joan Burton said Mr Quinn had lost the "biggest gamble in Irish history" -- which was his disastrous decision to enter into a contracts-for-difference deal on Anglo share price values. "It's very sad for the workers and the Quinn family as well. Obviously, the State will have to try to recover as much of its money as the taxpayer has been put on the hook for. These are real losses that taxpayers have to take," she said.
Ms Burton said she expected that Anglo Irish Bank would carry out a thorough examination of Mr Quinn's assets and his "worldwide empire" to get a statement of assets.
Fine Gael Cavan-Monaghan TD Seymour Crawford said that in the town of Ballyconnell in Cavan alone, the Quinn Group owned a cement factory, a glass factory and the Slieve Russell Hotel. "All of those things provide an enormous amount of employment. Ballyconnell and Cavan town and the whole of west Cavan has very little else. He's the major employer in the border area," he said.
Mr Crawford said he fully understood the need for Mr Quinn to repay his debts but expressed concern at the possible effect on his workers' jobs.
"I'm not justifying what Sean Quinn did. He was literally betting on a bank and he was the first to put up his hand to say he made a major mistake. But God only knows what it would take to get employment re-established in that area if his empire was taken out," he said.
Mr Crawford said he knew Mr Quinn and had helped to organise meetings between him and Fine Gael leader Enda Kenny and Labour leader Eamon Gilmore during the Quinn insurance jobs crisis earlier this year.
"The pressure he's under is absolutely enormous. He's not trying to run away from this, he's just trying to see if he can get help from any side to retain the jobs," he said.
Meanwhile, Anglo Irish Bank chairman Alan Dukes said yesterday that the final figure for the cost of sorting out all the banks might be affected by future behaviour in the financial markets and trends in the Irish property markets.