Watchdog's action is one of the biggest errors ever, says Quinn
Published 02/04/2010 | 05:00
BUSINESSMAN Sean Quinn was engaged in a war of claims and counterclaims last night as he slammed the Financial Regulator's decision to appoint provisional administrators to his insurance firm.
He described the move as "one of the biggest errors ever in the history of corporate Ireland". In an interview with RTE News last night, Mr Quinn rejected claims that Quinn Insurance failed to disclose crucial information about the state of its finances until a few days ago.
The Financial Regulator took court action this week when it became aware that some units of the insurer had given guarantees to bond investors which had the effect of reducing the group's assets by €448m.
But Mr Quinn insisted last night that the guarantees were known to the watchdog for a number of years and contained in the company's accounts.
He claimed it only became an issue in recent weeks when he pointed out to the Financial Regulator that the bond holders wanted to hold on to the guarantees as they renegotiated the debt facilities.
The cement-to-insurance tycoon also said the decision to appoint administrators to the company threatened the future of thousands of jobs in Ireland.
"Whatever happens it is major collateral damage to me and to my family, to the area, to Quinn Direct and its employees," he said. He added that there "is absolutely no need for it," saying that he had €100m of cash in the bank ready to meet insurance claims if needed.
But court documents show that the watchdog has also been worried about the broader Quinn Group since last December, when Quinn Insurance said it was seeking a waiver from certain commitments to its financiers at the end of last year.
Affidavits presented to the High Court also show that a business plan presented by Quinn Insurance early last month was dismissed by the regulator as "exceptionally disappointing" and "very optimistic". Mr Quinn also told RTE News that he first learned of the regulator's action on the radio news on Tuesday.
However, he later said that he had contacted government ministers on Monday and Tuesday over his concerns relating to the watchdog.
He warned the regulator's move was "putting a company with 5,500 employees at risk".
The broader Quinn Group employs this level of people. The Irish Independent has learned, however, that 12 potential suitors have already contacted the provisional administrators, Paul McCann and Michael McAteer of Grant Thornton.
The Grant Thornton duo are believed to have told all interested players that they will contact them if they decide to sell all or part of the business in the future. Mr Quinn added that he "fundamentally disagreed" with Finance Minister Brian Lenihan, who told the Dail on Wednesday that the watchdog had carried out its functions properly.
The minister said the regulator was worried that the company had significantly breached solvency ratios -- a key measure of the strength that an insurer has to pay out potential claims.
He added that the regulator was concerned that Quinn Insurance had failed to make adequate provisions for its debts and prospective liabilities.
The interview was broadcast just hours after 300 workers from across the Quinn Group gathered outside the Dail in protest at the Financial Regulator's decision. Yesterday marked the second time in 14 months that the normally publicity-shy businessman has given a television interview to defend his prized empire.
He conceded in January last year that his family were "too greedy" and lost well over €1bn on their dud investment in Anglo Irish Bank. The family had held up to a 25pc stake in the lender at one stage.
He accepted at the time that a €288m secret loan from Quinn Insurance to other family companies to fund the stock market gamble on Anglo shares was in breach of insurance regulations.
But he insisted that "there's no impropriety in anything we've done in that bank".
The Financial Regulator hit the firm with a €3.2m fine -- and Mr Quinn personally with a €200,000 penalty -- last October 2008 over the issue.