TWO stockbroking firms have been ordered to disclose documents related to controversial transactions by companies linked to the family of jailed businessman Sean Quinn.
The transactions were allegedly carried out to prop up share prices in Anglo Irish Bank in the run-up to its collapse, the Commercial Court heard.
The documents were sought from NCB Stockbrokers Ltd and J&E Davy by Irish Bank Resolution Corporation (IBRC), formerly Anglo, for its defence of the forthcoming action by Mrs Patricia Quinn and her five children denying liability for some €2.34bn of loans made by Anglo to Quinn companies.
Both firms had indicated they were not opposing the disclosure – discovery orders – if the court ordered them to do so.
The Quinn children, the beneficial owners of the companies, claim the loans were intended to meet margin calls on Contract for Difference (CfD) investments made in Anglo by Sean Quinn via a Madeiran-registered company, Bazzely, and were for the unlawful purpose of propping up Anglo's share price.
The bank denies that, but contends that if the family prove their claims, it is entitled to be indemnified by Sean Quinn and two senior Quinn group executives, Dara O'Reilly and Liam McCaffrey, against any judgment awarded against it.
IBRC claims the three men were central to a strategy to buy shares in Anglo via CfDs.
A solicitor for IBRC, Karyn Harty, said in an affidavit yesterday that the bank made loans of some €2.34bn from September 2007 to the Quinn Group and has confirmed that loans advanced after March 14, 2008 were to meet margin calls on CfDs but that was not the purpose of the lending before that date.
The bank denies senior management of the bank supported and encouraged, or were authorised to support or encourage, the CfD investments, she added.
IBRC says NCB acted for the Quinn side in relation to the CfD transactions while Davy was a counter-party to some of the transactions. If either firm has documents signed by the Quinns, those documents were likely to be "crucial" and "core" documents in the trial, fixed for next April, Ms Harty said.
Brian Murray SC, for IBRC, asked Ms Justice Mary Finlay Geoghegan to direct NCB and Davy to discover a range of documents related to the CfD transactions.
Niall McPartland, Sean Quinn's son-in-law and representing the Quinns, said they were not objecting to the discovery application but were anxious that the trial date of next April should not be delayed.
Making the discovery orders sought, the judge said it was indicated that the discovery would take six weeks, which was unlikely to delay the trial.