Saturday 25 May 2019

Quinn admits he was too greedy as losses hit €1bn

The impressive headquarters of Quinn Insurance in Blanchardstown, Co Dublin.
The impressive headquarters of Quinn Insurance in Blanchardstown, Co Dublin.

Joe Brennan

IRELAND'S richest man, Sean Quinn, admitted yesterday that his family were "too greedy" and lost well over €1bn on their ill-fated investment in Anglo Irish Bank.

But in an emotional interview on RTE television, he insisted that "there's no impropriety in anything we've done in that bank".

The Fermanagh-born cement-to-insurance tycoon said, however, he fully accepted that a €288m secret loan from his Quinn Insurance arm to other family companies to fund the stock market gamble on the bank's shares was in breach of insurance regulations.

The Financial Regulator slapped the insurance firm with a €3.2m fine -- and Mr Quinn personally with a €200,000 penalty -- last October over the issue.

"We never at any stage put our company in any undue risk. Any money we put into shares was money we could afford to do without," Mr Quinn said. "In hindsight, we were too greedy."

Asked if he would have done anything differently over the past 24 months, he said: "I certainly wouldn't have bought shares. I would have invested more money in India and Russia." The group, which has a substantial commercial portfolio in Europe, has recently extended into Russia and India.

Mr Quinn acknowledged that "we all got carried away a little" in the boom years, but that Irish people are now becoming accustomed to a new reality.

At his peak last year, the entrepreneur was estimated to be worth €4.7bn.

Mr Quinn revealed last July that his family held a previously undisclosed stake of 15pc in Anglo -- through complex financial instruments called contracts for difference (CFDs), which allowed an investor to avoid disclosing its holding under a loophole in Irish law.

Secret

Investors who own more than 3pc of actual shares in a company are required to show their hand under stock exchange rules.

Mr Quinn said at the time the family was converting the CFDs into shares, but it emerged this week they had a secret interest of as high as 25pc in Anglo at one stage.

The Department of Finance has acknowledged that Finance Minister Brian Lenihan was aware last summer that the Financial Regulator and Anglo itself were concerned about the size of the holding, and that it posed a threat to the stability of the sector and the market.

Sources have confirmed that the 10pc CFD position that the Quinn family was either unable, unwilling, or not allowed, to convert to shares were sold to a group of about 10 wealthy investors -- without the knowledge of the market.

The department said that "any significant corporate governance issues that come to light will be investigated by the appropriate authorities".

There are currently three separate probes ongoing into matters at Anglo -- mainly centred around former chairman Sean FitzPatrick's hiding up to €122m of loans from shareholders.

Mr Quinn said he was completely unaware of Mr FitzPatrick's practice, carried out over eight years.

Mr Quinn said the Anglo shares were an investment of his wife and five children, but that he was "involved" in the deal.

Market sources have said they have lost well over €1.5bn, though he would only concede yesterday that the loss was in excess of €1bn. He said they have written off the entire investment.

This is in spite of the fact that the Government has yet to appoint an assessor to work out if shareholders are due any compensation from Anglo, which was nationalised last week.

The publicity-shy businessman lashed out at the "media frenzy" surrounding the group in recent times. "We have no idea why there's this agenda to get Quinn," he said.

He added: "If we owe an apology to anybody it is to our staff." The group, which has built up an empire over 35 years, spanning everything from cement to hotels, pubs, property, glass and radiators, employs almost 8,000 worldwide, with about 5,500 in Ireland alone. He reiterated the group is on track to post between €400m and €500m of profits this year, despite being in the throes of a recession.

In a good year, it would hope to turn in up to €700m, he said.

quinn was feeling the pressure, page 25

Editor's Choice

Also in Irish News