I didn't know about loan guarantees: QIL ex-CEO
Former Quinn Group CEO Liam McCaffrey has told an inquiry the role of former executives in the collapsed Quinn Insurance Limited (QIL) that he was not aware that the collateral of the company's subsidiaries were included in a €1.2bn loan agreement.
Mr McCaffrey was giving testimony at the inquiry. The 2010 collapse of QIL means all policy holders continue to pay a 2pc levy on non-life products.
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The Central Bank of Ireland imposed a fine of €5m on QIL for its failure to maintain those solvency margins and for the lack of management controls in 2013, but the fine was waived as the firm was in administration.
"The guarantees weren't hidden, but I can safely say that nobody spotted them over that period," Mr McCaffrey testified, saying he had relied on the judgement of legal advisers A&L Goodbody as well as auditors PwC who had not raised the issue as far as he was aware.
Mr Quinn's evidence took the whole of yesterday afternoon and he will continue today. He referred throughout his hearing to copious notes in a red ring binder and flummoxed the hearing's chairman, Mr Justice Iarfhlaith O'Neill, with a reference to A&L Goodbody "quarterbacking" the deal.
Mr McCaffrey also appeared to aim a dig at Sean Quinn.
"If you are looking for dominance you might prefer somebody who never attended a meeting he didn't chair," he said in a comment that referred to a section of Mr Quinn's testimony last week.
The assets of the eight companies formed part of the regulatory capital of Quinn Insurance and, as such, had to be ring-fenced and were not available to be pledged as collateral.
Mr McCaffrey said the loans process was one that was initiated by Barclays and that given the size of Quinn Group's operating profits measured by ebitda, were more than covered by cash flow and there was no consideration of the loan being liquidated.
In testimony last week, the inquiry heard that the board of Quinn Insurance did not become aware that the assets of eight subsidiary companies, which were directly or indirectly owned by the insurance company, or some of its entities, had been pledged until 2010 when, in the words of Senior Counsel Eoin Mr McCullough "matters became difficult". It also heard that Quinn Insurance board meetings that were supposed to sign off on the loans did not appear to have taken place, something Mr McCaffrey appeared to agree with when he said they "were unlikely to have taken place".
The firm was put into administration in 2010 and later bought by Liberty Insurance of the US for €1.
The public section of the inquiry will conclude this week, although a ruling may still be some time away.