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The once mighty Quinn cries foul

THEY do things differently in the Ukraine. Robert Dix knows that better than most.

He arrived in the Ukraine, surrounded himself with a team of burly bodyguards, and embarked on his mission: to recover, on behalf of the former Anglo Irish Bank, as many millions of the Quinn family money as he can. He has gone to extraordinary lengths to do so, not only having to acclimatise to the local political culture, fending off the unwelcome attentions of mysterious locals, but also roping in the Taoiseach Enda Kenny to help.

Little wonder that Sean Quinn is feeling victimised. Once Ireland's richest man, he is now bankrupt, allegedly worth less than stg£50,000, and at war with Anglo over a disputed €2bn debt, run up through gambling on the bank's share price.

Unusually for the once publicity-shy tycoon, he has recently begun to make his feelings known. Last month he issued a long statement after he asked a Northern Ireland court to declare him bankrupt because he couldn't pay his debts. In it, he claimed that Anglo -- now known as the Irish Bank Resolution Corporation -- and the Irish Government "are intent on making scapegoats of my family and I. Anglo has consistently ignored its own wrongdoing in affairs."

He followed this up with a rare interview -- given to his local newspaper, the Impartial Reporter -- in which he described feeling "very hard done by" and vowed the Quinns would be back.

Last Monday came another statement, saying he was "shocked" at Taoiseach Enda Kenny's "political interference" in the bank's attempts to secure overseas assets that once belonged to his family. And on Friday, hot on the heels of RTE's libel debacle against Fr Kevin Reynolds, Quinn's daughter lodged an official complaint with the national broadcaster over a recent Prime Time report on the -- Quinn/Anglo saga she claimed was "biased" and unfair to her family.

Quinn's claims that he is being victimised are getting louder by the week, which could possibly be related to the looming court battles over the matter of the unpaid €2bn.

His calls for a fair hearing have been met with scepticism, even incredulity. There seems little doubt that Quinn's gamble on Anglo's share price contributed to the bank's demise. Thus he contributed to the cost of the bank's collapse, and the almighty burden placed on the shoulders of Irish taxpayers for generations to come.

Quinn blames Anglo for his own misfortune. He believes his side of the story is not being heard.

The former tycoon, once worth more than €4bn, conquered cement, glass, insurance before turning an ambitious eye on the banking sector with disastrous consequences. From 2007, he sunk huge sums into building up a secret shareholding in Anglo Irish Bank. The share price started falling as the financial systems collapsed, and Quinn started running out of money to shore up his share losses. Quinn revealed his secret stake-holding to the bank's now disgraced chiefs, David Drumm and Sean FitzPatrick. That's where the family's allegations of Anglo skulduggery come in. Quinn alleges Anglo loaned hundreds of millions to cover the Quinn losses to protect its share position.

Quinn's allegations will ultimately be tested in the High Court (Anglo is suing the Quinns and the Quinns are suing Anglo). In one of the many legal preludes to the court hearing next year, Anglo's lawyers said it was "extraordinary" for the Quinns to try and shake off liability for the €2bn by accusing the bank of the "criminal offence" of market manipulation.

Anglo claims the loans were working capital and equity release on property -- and not to fund the share losses.

The legal cases are inching their way through the Commercial Court and will not be heard until next year.

The battle between Quinn and Anglo is being waged on other fronts as well.

Since the fallen tycoon was ousted from his empire last April, the bank has pursued his family's assets in Russia, Cyprus, India, Turkey, and -- the latest flashpoint -- Ukraine, estimated at €500m.

The nationalised bank has gone to extraordinary lengths to recover any money it can for the taxpayer. Nowhere is this more evident than in the Ukraine, where Anglo has resorted to unorthodox methods in its bid to take control of a vast shopping mall in the capital Kiev that used to belong to the Quinn family.

The shopping mall, called Ukraina, was a relic of the Soviet era that was transformed into a glass-fronted commercial extravaganza in 2003 and snapped up by the Quinn family three years later. Its rent roll is $10m (€7.4m) a year and with a value of $80m (€59.6m) to $100m (€74.6m), it was the Quinn's most valuable Ukrainian asset.

When Anglo called in the Quinn loans earlier this year, a share receiver was appointed to the Swedish company which held several family assets. Robert Dix was appointed to the board at the bank's request.

Dix is, in a manner of speaking, in charge of the bank's overseas brigade. His mission: to seek out and sequester foreign assets owned by the Quinn family. In an attempt to recover €500m of the disputed €2bn. That included the shopping mall.

The Quinns owned 93 per cent of the mall through their company, Quinn Holdings Sweden. The remainder was owned by about 4,000 small shareholders. The family used to own a 15 per cent stake in a commercial building called Leonardo Business Centre, worth an estimated $80,000 (€59,680) to $100,000 (€74,600).

While the bank has secured its stake in Leonardo building, the shopping mall is another story. As Anglo has discovered, doing business in Ukraine is not straightforward. On his trips to the country, Dix was accompanied by body guards at all times.

And, as the bank moved to install a new management team with the support of the shareholders last month, strange things began happen.

Lawyers acting for the former director general of the shopping centre went to the Ukraine court to challenge the validity of an $80m mortgage to buy the shopping centre.

Then a Russian law firm went to court to stake a claim over the shopping centre, alleging that Quinn owed them $226,000 (€168,597) in legal fees.

The legal bill corresponded almost exactly to the share value of Quinn Holdings Sweden. The law firm got its attachment order, which means that if the bank does get control of the shopping centre, it will be constrained from selling it.

Meanwhile, the shopping centre's new director general has effectively been locked out of the building. On the eve of a shareholders' meeting which approved his appointment, a new security firm was installed.

So Anglo went down the "political route" to attract attention to their troubles. It hired a public relations consultancy in Ukraine and embarked on a political lobbying campaign.

In September Enda Kenny "referenced" the matter in a meeting with the Ukranian president but did not "discuss" it, according to a spokesman. Representations were made to through diplomatic channels in the Czech Republic and the Ukraine.

And a week ago last Thursday, Dix wrote an open letter to Ukraine's prime minister, Mykola Azarov, which was published in several local newspapers. "As a result of a series of unlawful activities on the part of the former management of the mall and other persons, numerous obstacles, which make it impossible for us, the owners of almost 93 per cent of the shares of the 'Ukraina' shopping mall to exercise our lawful rights, have been and continue to be created. Despite having the status of the majority shareholder, Quinn Holdings Sweden AB has been literally stripped off of their power to control the running of the enterprise."

It concluded: "We appeal to you, Mr Prime Minister, with the request to take this matter under your personal control."

The Quinn family has not been implicated in any of this and they are not party to any of the volley of injunctions and challenges currently before the Ukraine courts.

But someone is trying to keep the shopping centre out of the hands of the Irish taxpayer and Dix suspects there is a Mr Big lurking behind all the legal challenges.

According to a paper by the Institute for International Economics, Ukrainian corporate raiding has exceeded Russian levels with several large enterprises "raided" in the past year. "The common strategy (in corporate raiding) is to create a false liability, get it committed to the record, take the asset and ride off into the sunset," said Dix.

In the past, Richard Woodhouse, Anglo's executive head of corporate projects, claimed in court documents that new information was coming to light "on an almost daily basis" about the Quinn "conspiracy" to put their assets beyond reach of the bank.

"When viewed as a whole, it is very clear that there is a sinister pattern in Sweden, Russia, Ukraine, India and Cyprus of the personal defendants conspiring from Ireland to act unlawfully to put valuable secured assets beyond the reach of Anglo," he claimed.

Chasing the Quinn assets has proved expensive. The bank has hired financial investigators to track the huge Quinn family fortune across several countries. The cost of pursuing litigation in five countries excluding the mammoth legal battles that it faces in Ireland is enormous.

So far all Anglo has to show for it, in terms of foreign assets, is a hotel in Nottingham, a shopping centre in Turkey, two hotels in Prague and the Leonardo building, of which it owns 15 per cent.

The Quinn family has denied Woodhouse's claims. They have secured an injunction in Cyprus to keep their offshore assets from the bank. The court will decide this month whether it should stand.

Sunday Independent