Business Irish

Monday 26 September 2016

Sean Quinn debt deal is threatened by Siteserv sale row

Published 03/05/2015 | 02:30

Sean Quinn
Sean Quinn

The Siteserv controversy threatens to jeopardise talks between the Quinn family and the IBRC's liquidators to end the protracted legal battle over massive debts of €2.3bn, according to informed sources.

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Finance Minister Michael Noonan has asked the bank's special liquidators to investigate the sale of Siteserv and other IBRC transactions involving debt write-downs of more than €10m.

Their appointment as investigators of IBRC transactions has complicated the fragile talks with the Quinn family to reach a deal on its disputed debts of €2.3bn owed to the wound-up bank.

One source suggested the talks with the Quinn family could have to be stalled until the liquidators complete their review of IBRC's debt write-downs.

Another source described the talks as having entered "a very sensitive stage".

The talks are aimed at calling a truce in the toxic and expensive battle between the nationalised IBRC and the Quinns, once one of the richest families in Ireland, over their disputed bank debts.

The bank has been pursuing the family's offshore assets while the Quinn children are suing the IBRC and the State in a multi-billion euro action over the legality of the loans.

According to sources, the deal aims to draw a line in the sand, with both sides dropping their legal actions against the other, saving massive legal bills, and enabling the liquidator to sell the Quinn assets that have already been secured.

But sources said the IBRC liquidators, Kieran Wallace and Eamonn Richardson, have been put in a "difficult position" because of their roles as "independent reviewers" of IBRC debt write-downs.

"In this environment, it is difficult now for people to make definitive decisions on the Quinn case while also investigating previous transactions by the bank," one source told the Sunday Independent.

"If they can establish the facts of the Siteserv deal and other transactions quickly, then it should be possible to move forward."

The timing of the liquidators' appointment to independently review the IBRC transactions is also sensitive. The Quinn family's civil action is due to open on June 3.

The row over IBRC's debt write-downs erupted a fortnight ago after the Department of Finance released documents to Independent TD Catherine Murphy which confirmed civil servants' concern over the sale of Siteserv in a deal approved by IBRC in 2012.

The support services firm owed €150m to IBRC. It was sold for €45m to businessman Denis O'Brien's firm, Millington. IBRC wrote off two thirds of Siteserv's debt and approved a €5m payment as a sweetener to its shareholders.

The documents revealed that officials were not only concerned about the Siteserv deal, but about several other IBRC transactions, including an unspecified aspect of the bank's dealings with the Quinn family.

In a note dated July 2012, and headed "business conduct concerns", the "Quinn family" is listed but the actual "concerns" are blacked out. The Quinn family wrote to the Department of Finance last week, requesting the unredacted document and any others held in the Department that relate to them.

The Department has declined to explain what "concerns" it had about the bank's conduct with the Quinns in July 2012. The former chairman of IBRC, Alan Dukes, has suggested that the concerns could have been the bank's decision to hire a controversial debt recovery agency, A1, to secure the former Quinn properties in Russia and the Ukraine. But the Department's concerns appear to predate the bank's decision to hire A1, which was made several months later.

Meanwhile, the Sunday Independent has learned that the accountancy firm that Mr Wallace and Mr Richardson work for, KMPG, was paid fees of €18,548 by bust company Siteserv after it was liquidated. The fees are disclosed in the liquidators' report on Siteserv which is filed in the Companies' office.

The disclosure of the fees will fuel opposition claims of a conflict of interest in the KMPG partners conducting the independent review of the Siteserv sale and other IBRC transactions.

Arthur Cox, the legal firm that advised both buyer and seller in the deal, was paid fees of just over €12,000 by Siteserv after its liquidation. Minister Noonan has appointed a retired High Court judge to monitor "conflicts of interest" in the review of IBRC's transactions.

Sunday Independent

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