Rent from family’s Russian properties, now owned by IBRC, is beyond reach
A multi million euro shopping centre in Ukraine that was once owned by Seán Quinn’s children but recovered by the State to pay his debts, has re opened for business as civilian life resumes in the war-torn capital city.
The Univermag shopping centre, along with a six-storey office block in Kyiv, were quickly boarded up after Russian forces invaded Ukraine on February 24. The buildings escaped damage from heavy bombardment as Ukrainian forces repelled the Russian army’s attempts to surround the city.
The shopping centre reopened in recent weeks with most of the retail outlets resuming business, according to an informed source, while the office block has also reopened.
The shopping centre and office block are among four commercial properties in Ukraine and Russia that were once key parts of the €500m overseas property portfolio owned by Seán Quinn’s children.
They are now ultimately controlled by the liquidators of state-owned Irish Bank Resolution Corporation (IBRC), which planned to sell off the former Quinn assets in Russia and Ukraine this year and next.
Plans for the sale have been shelved, said the source.
Meanwhile, international sanctions mean that the rent generated by the two key Russian properties is beyond reach.
The landmark 20-storey Kutuzoff Tower in Moscow and a logistical centre called Q-Park in Kazan were worth a combined €100m before the war, and bring in an average rent of €7m to €8m.
The properties are under Russian management and rent is landing in the local bank accounts of the IBRC holding company that owns the properties. However, the cash can’t be transferred out because of financial sanctions prohibiting business with Russia’s banks and financial institutions.
There were fears that two key properties in which the Irish State has an interest could be nationalised by Vladimir Putin in retaliation for Western sanctions.
But there “is genuinely no sign of that”, said the informed source.
Attempts to sell the Russian and Ukraine assets to recover some of the €2.3bn debt owed by Seán Quinn to the former Anglo Irish Bank have suffered repeated setbacks. Russia’s invasion of Ukraine is just the latest obstacle.
Anglo was nationalised and subsumed into the state-owned IBRC, which set about recovering the €2.3bn debt, seizing control of Seán Quinn’s business empire and targeting the €500m overseas property portfolio.
IBRC fought a long and expensive battle for control of the Quinn family’s international property portfolio. At one point, the children were accused of putting the assets beyond reach.
Control of some properties had been transferred to various entities in different countries, and tens of millions of euro in rent went missing.
At one point, after winning control over the Kutuzoff Tower in Moscow through the courts, only to lose control in another legal action, the IBRC embarked on a joint venture with the Russian oligarch Mikhail Fridman’s Alfa Group, an asset recovery company, to help secure control of the properties there.
Fridman’s company struggled to sell them, as Russia was embroiled in a recession, and the IBRC repaid a loan of €34m to end the arrangement.
Fridman has been sanctioned by the European Union, and two weeks ago a Ukrainian court seized assets worth around €400m.
The Quinn family and IBRC agreed to drop their respective legal actions against each other after a deal brokered in 2019.
The Quinn children agreed to judgments of €88m registered against them by the IBRC. But the judgments were paused on condition that the children agree to help recover what’s left of the overseas property portfolio.
The liquidators of IBRC, Kieran Wallace and Eamonn Richardson of KPMG, had planned to sell the Russian assets this year and the Ukrainian assets next year.