Tycoon attacks 'aggressive' move to seize his family firm
Quinn claims 5,500 jobs now at risk
Published 31/03/2010 | 05:00
TYCOON Sean Quinn went on the offensive last night accusing the Financial Regulator of putting 5,500 jobs at risk after it penalised his family business for a second time.
Mr Quinn wrote to every government minister after interim administrators were appointed to Quinn Insurance by the High Court after a dramatic request from the Financial Regulator.
The regulator raised "very serious concerns" over solvency levels at Ireland's second biggest insurer -- if it was hit with an influx of claims
Mr Quinn immediately wrote to cabinet members, slamming the regulator's actions as "highly aggressive and unnecessary" and claiming the move "endangers" 5,500 jobs across the Quinn Group.
The Irish Independent can reveal that the Financial Regulator has been locked in intense negotiations with Quinn Insurance since last December after the insurer indicated it could fall below minimum solvency requirements.
A month later, the Financial Regulator asked Quinn Insurance to draw up contingency plans in the event of the entire Quinn Group going bust, documents lodged with the High Court yesterday reveal.
The High Court dash wasn't triggered until last Wednesday, when the Financial Regulator learned that assets of Quinn Insurance had been used to guarantee hundreds of millions of the Quinn Group's debt.
The guarantees, some of which had been in place since 2005, reduced Quinn Insurance's reserves by €448m and pushed the levels below the regulatory minimum, prompting alarm at the regulator's office.
The regulator then investigated whether Quinn Group's lenders would release the guarantees and allow a €35m injection to shore up the insurer.
When the lenders and bondholders declined, the regulator yesterday asked the High Court to install an administrator to effectively take over the running of the insurance company.
Grant Thornton duo Paul McCann and Michael McAteer were appointed as provisional administrators until the case comes before court again on April 12.
The pair immediately travelled to Cavan, where they began meeting with management. The Financial Regulator also dispatched a "small team" to Cavan yesterday as it begins its own investigation into the circumstances surrounding the loan guarantees.
Sources yesterday said that "nothing had been ruled out" in relation to the course of action that might be taken in respect of any breaches discovered.
Despite the moves, both the regulator and the administrators stressed that Quinn Insurance continues to accept new policies and honour existing ones, while Quinn Life is completely unaffected by the developments.
The Financial Regulator, who is legally responsible for supervising insurance businesses, told the High Court that Quinn Insurance had "significantly breached" its solvency ratios, had failed to deliver a financial plan aimed at restoring its health and was operating in a way that "was jeopardising and prejudicing the rights and interests of those who have insurance policies with the company".
In last night's letter to cabinet members, Mr Quinn insisted his insurance company was on track to reach the regulator's solvency requirements "by year-end".
He went on to ask the ministers why the regulator was taking this action when "the group and Quinn Insurance are in a position to meet all their respective obligations from a cash perspective" and why the Government and its agencies were "unwilling to give the necessary time to Quinn Insurance when all parties were confident that a satisfactory conclusion could be found".
Mr Quinn also stressed the Quinn Group's status as one of Ireland's six largest companies, with group-wide profits of €20m a month and with commitments to pay back all monies borrowed from all institutions.
"If this situation (the administration) remains in force the damage to the business could be serious," the letter continued, predicting a "significant loss" to the country over the coming years.