independent

Saturday 19 April 2014

Liam Collins: Courts lay bare Quinn's oil empire

The millionaire guru Tony Quinn's business dealings are coming under the spotlight, writes Liam Collins

The bizarre world of that international man of mystery Tony Quinn is being peeled away, layer by layer, in courts in Dublin, Denver, Colorado, USA and the Caribbean island of St Kitts & Nevis.



The Dublin-born 'guru' has been dragged centre stage over a series of legal actions revolving around what could be a billion dollar oil fortune in Belize.

The tanned and bearded Dubliner, Tony Quinn, one of whose followers claimed she was indoctrinated to believe he was "the reincarnation of Jesus Christ", only made one visit to the Central American country of Belize, but it turned out to be a very profitable journey.

At a ceremony on October 10, 2006, two of his then "admirers", Susan Morrice and Irish woman Sheila McCaffrey, presented him with 'Class A' shares in the oil exploration firm International Natural Energy (INE), registered in the Carribean island of St Kitts & Nevis and which were later valued at more than $16m (€12.2m).

Ms Morrice and Ms McCaffrey "appear" to have known each other since 2002 and, according to court documents, Ms McCaffrey was involved in oil and gas exploration in Ireland before they began putting the Belize project together.

INE was set up to hold shares in Belize Natural Energy (BNE), which carried out the oil exploration in Belize and "to the industry's surprise" struck oil in 2005, began to sell it in 2006 and has been "astonishingly successful" with reserves that could be worth billions.

The exploration company had 32,000 'Class A' shares, held by a small group known as the "Originators" of the Belize exploration project and 63,000 'Class B' shares. "The balance of the initial funding (of the exploration) was raised from persons (the Class B members) who had attended so-called Educo seminars run by Mr Quinn and who were encouraged in the course of those seminars to invest in INE in exchange for shares," said Judge J Bannister of the East Caribbean Supreme Court, in a judgement delivered on July 16, 2012.

Many of the Class B shareholders are devotees of Mr Quinn in Ireland.

"It appears," he continued, "that there is a body of opinion in the Republic of Ireland which is passionately opposed to Mr Quinn and to whatever it may be that he stands for or promotes, to the point where campaigns have been run against him in the media and where he is, or has been, subjected to serious intimidation."

As well as getting the valuable parcel of shares, Mr Quinn, it was later claimed, was appointed to the board of the company, an appointment which the judge later declared was "plainly invalid" because he hadn't been elected or paid for the shares.

Although he owns a landmark home on the coast road in Malahide, Co Dublin, another of Mr Quinn's homes appears to be Hamhaugh Island, an old fort on the Thames in London, which he has converted into a luxury mansion.

It was there, on August 16 and 17, 2007, that a meeting of the 'Originators' of the oil company took place in a "fraught atmosphere".

The Caribbean judge records Ms McCaffrey's version of the meeting "was that Mr Quinn spent time over the two days advocating a number of sharp business practices" and "scams" which he suggested should be put in place at Belize Natural Energy -- including operating their own offshore banks and "creaming off profits for themselves at the expenses of the Class B shareholders and the government of Belize".

However, Judge Bannister found that Tony Quinn "did not make these suggestions" and that none of these so-called suggestions were put in place.

However, a new operating agreement was signed on December 13, 2007, in Belmopan, the capital of Belize, in which Mr Quinn was defined as an 'Originator' of the company, with a permanent seat on the board.

The judge found that after the London meeting Ms McCaffrey was "progressively sidelined from the management of BNE" and "became effectively excluded" from all participation in the management" and was later suspended as a director. He also noted that a peculiar feature of the company is that INE has paid no dividends, but it allowed some shareholders -- said to be supporters of Ms Morrice and Mr Quinn -- to borrow large sums of money in lieu of future earnings, where other shareholders who are not favoured by them are excluded from this arrangement.

The reason that all this has come out is that around the same time in 2007 another founder of the company Jean Cornec, a Canadian mining engineer who had worked originally in Belize and was one of the original founders of the company, also felt he was being sidelined and came to an agreement to sell his Class A shares to Susan Morrice at $290 (€230) a share. He was paid $2m (€1.5m) cash up front with the balance, $15.6m (€12m), to be paid in 12 further installments.

Part of the sale agreement was that Mr Cornec would "not in any way cause to be made or otherwise disclose any disparaging comment, statement or communication about the purchaser (Ms Morrice) or any director of INE". After making payments worth $4.7m (€3.6m) no further payment was made after October 2008 and he is now suing Ms Morrice in Denver, USA.

It is as a result of this clause that the case eventually found its way to the High Court in Dublin.

Last week in Dublin, Judge Gerard Hogan delivered his judgement in the case of Jean Cornec V Susan Morrice, taken under the Foreign Tribunals Evidence Act, in which a court in Denver sought to question two Dublin writers on the 'sources' of stories they had written about the background and involvement of Mr Quinn in the Belize oil venture.

Although Mr Quinn was not a party to the proceedings and not represented, he loomed large in the background. Mr Quinn "professes what many might regard as rather unorthodox religious views", said Judge Hogan in his summary of the case.

"Mr Cornec maintains that Ms Morrice herself has come under what they see as the baneful influence of Mr Quinn and that she herself has effectively gifted large amounts of stock to him while also permitting him to use the assets of the company in a wholly unorthodox fashion."

Judge Hogan had to decide if Nicola Tallant, a journalist with the Sunday World, and Mike Garde, who publishes articles in a magazine run by his anti-cult organisation, Dialogue Ireland, should be compelled to reveal their sources in litigation "presently pending" in the district court of Denver, Colorado, concerning the $16m deal between Ms Morrice and Mr Cornec.

Ms Morrice contends that Mr Cornec had broken the sale agreement by sending his attorney Katrina Skinner to Ireland where she met with the two journalists and Mr Cornec is seeking to enforce the payment of the balance of the $16m for his shares.

In an article dated March 1, 2008, Ms Tallant conducted an interview with Marie Lawlor who "contends that she was effectively indoctrinated into believing that Mr Quinn was the reincarnation of Jesus Christ and that one of his closest followers was the reincarnation of Moses".

Judge Hogan decided that Ms Tallant and Mr Garde were "entitled to assert an immunity" from disclosing their source and so the litigation in Denver over the share transfer will have to go ahead without them.

In the meantime, separate litigation in St Kitts & Nevis was told that after Sheila McCaffrey was ousted from the company INE came under the influence of Ms Morrice and, it is claimed, Mr Quinn.

The company spent $1.8m hiring a "private army" of security personnel to protect the Irish guru against attack, both physical and from cyber-space.

INE paid Mr Quinn and his companies $544,000 in 2008. In 2010 they spent $201,000 to send Ms Morrice and an "associate" of hers Mary Ann Malone to a 13-day seminar in the Bahamas organised by Mr Quinn.

"The figures are inherently preposterous and no reason has been given why the business of INE required, or justified, expenditure of this sort," said the judge in relation to the trip to the Bahamas. "It seems to have been a jaunt for which Ms Morrice should have paid out of her own pockets," said Judge Bannister.

The court documents also disclose that $718,000 was paid over three years to Mr Quinn's companies by BNE for Educo seminars for its employees.

In his judgement in the commercial division of the East Carribean Supreme Court, Judge Bannister found that the 2007 "operating agreement" was invalid and that Mr Quinn was "never validly appointed to the board of INE" and that Ms McCaffrey had not been "validly suspended" from the board.

Where it all goes from here is a matter for the various litigants, but further episodes in the colourful life of the Dublin guru are expected in the coming months.

Sunday Independent

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