Monday 19 August 2019

Former Quinn executive can't explain his signatures on loan guarantees

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Stock image

David Chance

A former Quinn Group executive being questioned about the collapse of Quinn Insurance Ltd (QIL) told a public inquiry yesterday that he did not know that the assets of some subsidiaries had been signed away as loan guarantees.

QIL collapsed in 2010 after it emerged that assets that were supposed to form its regulatory capital had become collateral for a €1.2bn loan made by Barclays to Quinn Group.

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Mr Kevin Lunney, who served on the board of QIL and later the Quinn Group, told the inquiry that he did not recall signing any loan documents.

Senior Counsel Eoin McCullough then presented Mr Lunney a series of loan documents which carried his signature.

"I was unaware of the guarantees," Mr Lunney replied.

As a result of the implosion of QIL, which later was bought by US insurer Liberty, all non-life policies sold in Ireland carry a 2pc levy.

Mr Lunney's appearance follows testimony earlier this week by Mr Liam McCaffrey, another former Quinn executive, who also signed a series of documents relating to the loans.

Mr McCaffrey likewise said he was unaware that the statutory capital supposed to back Quinn Insurance was used as loan security.

In testimony last week, the inquiry heard that the board of QIL did not become aware that the assets of eight Quinn subsidiary companies had been pledged until 2010 when, in the words of Mr McCullough, "matters became difficult".

The inquiry also heard that Quinn Insurance board meetings at which loans supposedly were signed off did not appear to have taken place at all. Some of these documents bore Mr Lunney's signature.

Mr Lunney said he could not account for the discrepancy. He added that, unlike the lawyers and accountants present at the inquiry, he had responsibility for ensuring that a company currently employing 830 workers kept running.

This meant, Mr Lunney said, he had not had the time to devote all of his resources to the hearing.

Mr Lunney today is a director of Co Fermanagh-based Quinn Industrial Holdings (QIH), a firm composed of some parts of Sean Quinn's former business empire. Mr McCaffrey is the company's chief executive officer.

Mr Lunney said he could not afford to retain a lawyer to help prepare evidence and documentation for the inquiry.

"We did have legal representation until we could no longer afford to do so," he said, adding: "Quite frankly, our priorities were elsewhere."

Yesterday marked the final day of public hearings in the Irish Central Bank's examination of QIL.

Written submissions are expected to be considered in July. It is not clear when the three-member panel will make a ruling.

Quinn Industrial Holdings is controlled by three US hedge funds: Brigade Capital, Contrarian Capital and Silver Point Capital.

Irish Independent

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