Thursday 14 December 2017

Maeve Sheehan: With treasured reputations in tatters, Quinns still unrepentant

With the web of deceit uncovered, do the unapologetic Quinns regret the lies, wonders Maeve Sheehan

Sean Quinn
Sean Quinn
Maeve Sheehan

Maeve Sheehan

Ms Justice Elizabeth Dunne destroyed in a sentence the myth of Sean Quinn as the modest billionaire who hauled himself up by his farm- labourer's bootstraps to build a global empire.

"The behaviour of the respondents outlined in evidence before me is as far from the concept of honour and respectability as it is possible to be," she concluded at the end of her stinging judgement. With those words, she exposed Quinn's blind insistence that right was on his side as he fought the former Anglo Irish Bank over a disputed €2.3bn debt: Sean Quinn chose deception over honesty to secrete what was left of the family fortune on disastrous stock-market gambles.

Like John B Keane's Bull McCabe, who nurtured barren rock into a fertile field, Quinn transformed a gravelly field into a global empire. Just as the Bull McCabe character refused to give up the field that didn't belong to him, Sean Quinn refused to let his dying empire go, risking jail rather than repay the bank he claimed ruined him.

After he was found guilty on Tuesday of contempt of court by conspiring with his son, Sean Jnr, and nephew, Peter, to conceal the remnants of the family's fortune from the bank, Sean Quinn turned stony-faced to reporters as he got into his car and said: "I am not dishonest." Even with Ms Justice Dunne's damning judgement still ringing in his ears, Quinn refused to admit he was wrong.

Sean Quinn must feel keenly the loss of his reputation. He cultivated the image of a humble man who made his fortune from hard graft and ambition. He borrowed £200 and a corner of a 23-acre farm in Derrylin, Co Fermanagh, that was rich in sand and gravel. He dug the stones, washed them and used his GAA contacts from his days as a former captain of the Fermanagh team to sell them. The quarries expanded to cement, to building materials, plastics, hotels and made a final fateful move into finance when Quinn set up Quinn Insurance, a precursor to his gamble on Anglo Irish Bank shares. He was a local hero in the neglected border counties of Cavan and Monaghan where he brought employment to thousands. "I don't use a mobile phone. I play cards in a house at night where you have to go out into the front street to go to the toilet," he said in a rare interview. "I'm not overly shy but I much prefer to sit back and enjoy what I'm doing with my two dogs, the Wellington boots on and dodging around the mountain. It gives my brain more time to do what it's best at doing."

Their children seemed the antithesis offspring of Celtic Tiger millionaires. Colette, Ciara, Aoife, Sean Jnr and Brenda each had their own slice of the family business, owning hotels and a golf club.

They lived in relatively modest houses, Colette in Cavan and her siblings in Dublin, in the Farmleigh Woods estate, beside the Phoenix Park, rather than the Dalkey mansions occupied by many of their peers. They avoided the charity-ball circuit. His wife, Patricia, whom he met at a dance in Galway, stayed close to home. She later claimed she was a downhome housewife, with no head for business, who signed whatever business documents her husband pushed under her nose.

This unpretentious image of what was once Ireland's richest family has been blackened since Sean Quinn lost his fortune. He did so by persistently ploughing money into Anglo shares, through contracts for difference, as the bank's stock crashed. The nationalised bank started calling in outstanding loans that were now effectively owed to the taxpayer, which the Quinns refused to repay.

The Quinns owe €2.8bn to Anglo. The family dispute €2.3bn, claiming the money was illegally shovelled to them to prop up the bank's share price. They don't dispute that they owe the rest -- some €455m -- much of which is tied up in the vast overseas property empire owned by the Quinn children.

On April 14 last year, Anglo Irish Bank seized control of the Quinn Group and its myriad international subsidiaries, sending in security guards, changing the locks and sacking the Quinn family. Anglo soon discovered that the valuable Quinn properties in Russia and Ukraine, which they hoped to sell to recover the debt, had been stripped away and placed in the control of mysterious business entities.

Last summer, the bank got court injunctions ordering the Quinns to stop. When they didn't, Anglo accused Sean Quinn, his son, Sean Jnr, and his nephew, Peter, of contempt of court. The case was heard over weeks in May, and on Tuesday Ms Justice Dunne delivered her judgement. In an astonishing indictment of Sean Quinn, his son and his nephew, she found their evidence blatantly dishonest and deceitful.

When he gave evidence, Sean Quinn presented himself as a broken man who abdicated all his responsibilities in the business to his family after Anglo closed in. He went off to lick his wounds, looking around for a "handy way" out of his difficulties, trying to get a "wee bit of pride back".

Ms Justice Dunne disbelieved this tall tale, presenting an altogether different impression: "I am satisfied that not only did he give his imprimatur to implement the plan . . . but also that he took whatever steps were required by him in signing documents as required as and when necessary."

The Quinn family made no secret of their deep-seated animosity towards Anglo. Sean Quinn claimed his nephew Peter had warned him the bank would take over the company and urged him to take steps to put the family's properties beyond Anglo's reach. Quinn held off, claiming he never believed Anglo would come after the €2.8bn. When he realised he was wrong he claimed: "I rang Petey and said, lookit Petey, whatever this agreement you and I had for the last six, 12 months. . . whatever advice you've been getting from Russia, if you can get that thing put together as quickly as possible it should be done."

Peter Quinn came up with the plan. Sean Quinn gave it his "imprimatur", according to Ms Justice Dunne. "I find it impossible to believe that he took no further interest in the protection of assets for the benefit of the Quinn family." The most valuable international properties in their portfolio are the Univermag shopping centre in Kiev, Ukraine, and the Ivanov Tower in Moscow. According to Ms Justice Dunne, these were the properties the family went to great lengths to secure.

Peter Quinn took advice from Russians, Ukrainians and people in Dubai on how to achieve this end. The family claimed that they stopped such actions after Anglo secured court injunctions, instructing them to desist, in June and July last year, and produced documents to support their defence. According to Ms Justice Dunne, this was a pretence which they tried to shore up with fabricated documents, bogus records and back-dated contracts.

She found Sean Quinn and his nephew in contempt in three cases and his son in contempt in one. On June 20, for instance, Peter Quinn travelled to Dubai where he met a firm specialising in company services. He claimed in court that he was there to set up a Swiss trust, after his uncle had suggested that it might be a good idea to set one up for his grandchildren. But the judge found that he was actually there to buy offshore companies to which he could transfer the assets being stripped out of the family businesses in Russia and elsewhere.

Peter Quinn bought an offshore company called Galfis. He used a complex series of loan transfers from Quinn companies that ultimately resulted in Galfis having a claim over the valuable Moscow tower block.

Sean Quinn Snr and Peter Quinn claimed that they signed these loan transfers before the court orders injunctions were in place. The judge accused them of backdating the loan transfers to make it look as though they had signed them in April.

When Anglo found evidence of this, they went after Galfis to win back the Moscow tower for the taxpayer. The Quinns produced an unlikely Russian railway worker, Iaroslav Gurniak, in an attempt to support their claims that they signed the documents in April.

But Gurniak turned out to be "a man of straw", according to Ms Justice Dunne: "I do not for one moment accept that they would have blithely signed away valuable assets worth approximately $130m in the form of loans. . . to an unknown individual who is clearly a man of straw."

The second case of contempt involved the Quinn family's valuable Univermag shopping centre in Ukraine. In late August last year, Anglo moved to take control of it. The bank's representatives notified shareholders (the Quinns were majority stakeholders) of a meeting on August 30, at which it proposed ousting the Quinns from the business.

The day before the shareholders' meeting, Peter Quinn and his cousin, Sean Jnr, landed in Kiev, intending to transfer money out of the shopping mall before Anglo took it over. According to evidence given in court, and accepted by Ms Justice Dunne, they covered their tracks with fabricated paperwork which was left on the company's files.

The money was transferred to the shopping centre manager Larisa Yanez Puga, who looked after the Quinn family's property interests in Ukraine. According to the judge, Ms Puga's work contract was "falsified" and a clause inserted in the document to say that she was to receive $500,000 if her employment was terminated. A second document -- purported to be a minute of a meeting -- duly recorded Ms Puga's sacking and compensation. Both documents were signed by Sean Quinn Snr and Peter Quinn and placed on the files of the Ukrainian property company before the Quinn family were effectively voted out of the business.

By the time Anglo's representatives cottoned on to the ruse a couple of days later, the $500,000 was already transferred out of the business. Anglo complained to the police and the money remains frozen in Ms Puga's bank account.

Peter Quinn claimed he went to Kiev to say goodbye to the people who worked there, to thank them for their efforts and to reassure Ms Puga that her she had done a good job and hoped she would be kept on as general director.

Sean Quinn Jnr -- who had nothing to do with the running of the shopping centre -- claimed at first that he was there for a meeting with an unnamed Ukrainian businessman that Ms Puga had set up. In the witness box, he claimed that Peter had doubts about Ms Puga and wanted him to give a second opinion.

The judge didn't believe either of them. Peter Quinn's evidence was evasive, lacking in candour and plain untruthful, Ms Justice Dunne found. Sean Jnr's was "unbelievable"; she did not accept for a moment that he was there to give "a second opinion" on Ms Puga. Sean Quinn Snr's explanation as to how his signature ended up on the allegedly bogus minute and the Ms Puga's falsified contract was simply "not credible".

During his evidence to the court, Sean Quinn had railed at Anglo Irish Bank, contrasting its alleged conspiratorial skulduggery with his own honourable way of doing business.

"We've done everything. We've told them we will work free of charge for six, seven years, we'll try to get every penny back, even money that wasn't due to them." he said.

"Why did they want rid of Sean Quinn? Why did they want rid of the whole Quinn Group? Who was behind it?"

Ms Justice Dunne dismissed this misplaced victimhood. Quinn had spoken about how important the Quinn Group was as an employer of 7,000 people, and she appreciated his ability in creating his business empire. But he also spoke of "the honourable, respectable way" in which the businesses in the Quinn Group were run. "I wish I could say the same about the manner in which the respondents have dealt with the adverse circumstances in which they now find themselves having regard to the collapse of the Quinn business empire," she said.

The Quinn children will get their say when their legal action against Anglo comes up for hearing next year. Meanwhile, Quinn's attempt to keep what's left of that empire for his family has led them all down an ugly route.

When his wife, Patricia, was sued for €3m by Anglo, she claimed she couldn't recall signing documents and was under her husband's undue influence. The judge was disbelieving of her "startling proposition" that she was a "cat's paw" for her husband, clueless as to what she was signing. Their children are confined to a spending €2,000 a week by High Court order and their personal bank accounts will be forensically trawled through by a receiver appointed by the court.

On Friday, Sean Quinn, Sean Jnr and Peter were back before Ms Justice Dunne to hear whether or not they would be jailed for contempt. She gave them a reprieve, tossing the ball into their court by requiring them to comply with court orders to start helping Anglo to to get hold of the foreign assets and their valuable rent rolls for the Irish taxpayer.

Throughout the proceedings, Sean Quinn sat erect and inscrutable on the bench, a hint of a smile playing on his lips. His son sat beside him. His expression was calm but his skin looked grey and there were dark rings under his eyes. Peter Quinn spent almost the entire proceedings hunched over the bench, staring intently ahead. Ms Justice Dunne noted with disappointment that they had not apologised.

Afterwards, when reporters asked Sean Quinn Snr why he didn't apologise, he turned his flinty gaze on them and walked away. With a prison sentence still in prospect, and more litigation looming, there are many dark days to go for the Quinn family.

Was it really worth it for €455m?

Sunday Independent

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