Quinn Insurance faces hurdle as it signs off annual accounts
QUINN INSURANCE has launched a robust defence of the way in which its affairs were managed and will challenge the manner in which the Financial Regulator Matthew Elderfield moved to take over the company founded by businessman Sean Quinn and his family.
Yesterday Quinn Insurance Limited (QIL) lodged lengthy sworn documents defending its record and contesting a series of claims by the regulator less than an hour before the hearing of a High Court action by the regulator to have the company placed into full administration.
The submission of the documents, whose contents were not disclosed in court, resulted in a brief, seven-day reprieve for QIL as lawyers acting for the regulator sought time to consider their contents and comes as Quinn Insurance struggles to complete and sign off its annual accounts.
The company will have to provide a fresh balance sheet, outlining what its assets are worth. Depending on the valuations the solvency margin of the company could be reduced even further. For example, the company is propped up by €661m of loans and investments in Quinn subsidiaries. Much of these are facing potentially crippling writedowns, leaving the Quinn Insurance Group in an even more vulnerable state and attracting further investigation by the regulator.
The new information in the Quinn documents is unlikely to derail Mr Elderfield's plans to remove control of the lucrative business from the Quinn group, which is ultimately owned by Mr Quinn and his family.
John Hennessy, representing the regulator, told High Court President Mr Justice Nicholas Kearns that the documents did not appear to "go in substance into several of the very serious concerns" of the regulator, but sought an adjournment to give the new information careful consideration.
The regulator will tomorrow furnish QIL with its comments on the documents ahead of a full hearing which has been scheduled for next Monday.
A report carried out by joint provisional administrators Michael McAteer and Paul McCann of Grant Thornton has also been tendered to the High Court.
Judge Kearns declined a request by Michael Cush, representing Quinn Insurance, to allow the company to respond to the regulator's revised submissions next Monday, leading to a mid-week hearing, owing to the "importance and urgency" of the case.
In a statement released after the brief hearing, QIL said it hoped the adjournment would allow enough time to hammer out a resolution in ongoing talks with the regulator.
"Notwithstanding recent issues, we believe the underlying QIL business is profitable and that the operational model is robust, having brought much-needed competition to the market and improved service levels to consumers," said a spokesman.
The company again urged that it be allowed to reopen for new business in the UK "as a matter of urgency" to secure its future.
"The Quinn group will continue in its efforts to find an overall solution that secures the long-term position of the business and that of its employees who have been so supportive to the company, the group and the Quinn family in recent weeks," added the spokesman.
Speaking in Roscrea, Co Tipperary, yesterday, Taoiseach Brian Cowen said the week-long adjournment would allow time for further negotiations to take place. "Well, I think the concerns of all the stakeholders have to be dealt with as best we can in this situation," he said.
"We have policyholders themselves, we have taxpayers, we have people who are employed in the company and we have, of course, the regulatory requirements and all of these issues have to be dealt with.
"The case has been adjourned this morning for a further week and that provides an opportunity for further discussions to take place. At the end of the day, there are processes in place and we have to respect those processes."
Mr Cowen said the negotiation process between all concerned parties in the Quinn crisis must be allowed continue.
"These are matters that are under discussion between stakeholders," he said.
He added: "As you know, there is a court process that is being undertaken today so I think we have to allow that process to deal with the issues in the appropriate way."