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Saturday 23 August 2014

Martina Devlin: Quinn's charm offensive is sure to crash and burn

Martina Devlin

Published 02/08/2012 | 17:00

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IT'S like watching a car with steering failure approaching a wall at high speed. Its passengers appear to be on the brink of disaster. Yet even as the wheels turn and the wall looms, there is an outside chance of limiting the crash damage.

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Except the driver is in denial. He sees the wall but imagines he can drive through it and emerge safely on the other side.

Sean Quinn is that man behind the wheel. He has embarked on a publicity blitz to put his case to the people, somehow convinced it might spirit away the wall and change the outcome -- although the views which really matter are those of the High Court judges assigned to Quinn cases. And neither placards nor rallies will influence them.

Public backing cannot return the Quinn Group to him, or allow his family to keep hidden assets.

A rally in Ballyconnell, or one in Dublin for that matter -- even if it was held in Croke Park or on the steps of the Pro-Cathedral -- will not purge his contempt of court.

Apparently, he hopes popular support can at least restore his good name. Honesty is referenced frequently by him in that volley of interviews.

And, indeed, he was scrupulous. Until biting into the shiny red apple that was Anglo Irish Bank.

Sean Quinn's reputation has suffered, and clearly he regrets its loss. He believes his companies and his good name were stolen from him -- "daylight robbery" is his description of the Quinn Group's loss. Misfortune certainly played a part there but so, too, did his own misjudgment. As for his character, it has been smeared by his actions in shielding foreign assets, and in his dealings with the Irish judicial system. Not by outside forces.

Still, Sean Quinn makes a plausible case: we are hearing from a sincere man who did much good in his day.

But that wall rearing up ahead of him is replicated in his mind, which refuses to accept he made some extremely poor choices in recent times.

His rationale holds that it was unfair to deprive him of his business empire, therefore any counter action he takes is justified; two wrongs adding up to a right.

His sense of victimhood is understandable. However, he has been a businessman for most of his life, and must realise the business world is merciless when mistakes are made and compounded.

The higher the risk, the more someone stands to gain -- or lose.

Those who lend him support, from leading lights of the GAA to Catholic priests, are taking the easy road. Telling him what he wants to hear. Nourishing that sense of denial. True friends would urge Sean Quinn to comply with the law. And to stop giving those interviews -- compelling though they are, with their appeal to the voyeur in all of us -- because every time he does, that runaway car gathers speed.

Hand on my heart, I feel enormously sorry for Sean Quinn, though I have lacerated him over those poor choices for some time now, and still believe he is steering towards destruction. I share his wish that he had never gambled on Anglo shares. Even more, I wish he wasn't hell-bent on going mano-a-mano against the State over something he shouldn't have done.

Yet how to explain his ongoing support, even in the face of damning evidence? We had further proof of it this week in the High Court when its President, Judge Nicholas Kearns, described as "truly shocking" the revelation that some €1.65bn may be needed from the Insurance Compensation Fund as a result of Sean Quinn's mismanagement of Quinn Direct. Reasons include a culture of under-provisioning in insurance reserves.

During the Troubles, however, the border counties were woefully neglected. Multinationals didn't locate there and work was scarce. Foreign direct investment is now more prevalent in the region, but for many years employment was only generated when local entrepreneurs set up companies. Quinn Group, Glen Dimplex and Kingspan led the field, and Sean Quinn was the best known of them, employing 7,000 at his peak. But he diversified into areas outside his expertise.

Glen Dimplex and Kingspan have survived, while Sean Quinn has lost control of his empire because he expanded beyond what economists call his 'core competency'. He is terrific at running certain businesses, such as building materials, but with more complex companies he cannot judge risk. He seems to have presumed his undoubted business acumen was a transferable skill. But when Sean Quinn approached insurance, stockbroking and banking, the results were catastrophic. While Anglo is his nemesis, he would have experienced difficulties anyway.

The Quinn Group was heavily reliant on the construction sector, so layoffs were inevitable in his cement, plastics and radiators companies.

As for Quinn Direct, it was a flawed model. He tampered with the reserves, leading not just to the 2pc levy now paid by customers on all non-life policies, but to an extension of that tax far beyond the expected 12 years.

Cash to restock the insurance company has to be lent by the Exchequer and repaid little by little via that levy on policies. The money advanced comes from the pot of money raised in taxes and IMF- EU loans; to find it, other expenditure must be squeezed. This is not Sean Quinn's finest hour. As regards the rest of his group, he gambled it by using it as security on loans to Anglo. He says he had no choice -- the bank's previous management forced him to use it as collateral. But seeking security on loans is normal practice, as is enforcing security upon default.

THESE facts are not palatable to Sean Quinn, and haven't been absorbed by his supporters. No doubt there will be another rally. People have a democratic right to protest, and the narrative of the Quinn family's fall is a compelling one which divides opinion. Sean Quinn's problem is that he doesn't take advice, as he admits in interviews. Currently, he is out of control with his foot on the accelerator. Instead of listening to people who say he's in the right, he needs to take notice of those who tell him he's in the wrong.

It won't give him back his business empire. But it might put him back on the right road.

Irish Independent

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