[The judgment in the case is now available here]
“The behaviour of the respondents outlined in evidence before me is as far as removed from the concept of honour and respectability as it is possible to be.” Ms Justice Elizabeth Dunne concluding the judgment handed down today in the Anglo v Quinn contempt case.
The continuing Quinn family saga took a dramatic turn this morning when Dublin’s High Court ruled that members of the family were in contempt of orders made by the court last year, orders aimed at preserving assets that IBRC wants to use to offset €2.8bn of loans given by the bank. The Quinns – Sean (senior, the formerly richest man in Ireland), Sean (junior) and Sean senior’s nephew, Peter Darragh (otherwise, Peter Darragh Quinn) – are each held to have breached orders made by the court in 2011.
The judgment handed down this morning by Ms Justice Elizabeth Dunne is here. It follows a long line of judgments in Dublin and Belfast. And Kiev, in the Ukraine where IBRC has so far failed to get its hands on a €50m shopping centre. The BBC undertook a special investigation – which was broadcast last month – into the global machinations involving the Quinn property empire. The BBC’s Jim Fitzpatrick pursued a trail of asset transfers which took him from Derrylin to Stockholm to Kiev to Moscow to Belize City – below is a screengrab from the programme with Jim pointing, in an anonymous post office hallway in Belize City, to the registered office of a company laying claim to a €100m Moscow office block. You will find two of the previous court judgments and commentary here and here.
The judgment this morning is damning of the three Quinns. There are findings that documents were fabricated and back-dated, that the Quinns were not truthful in giving evidence and that, contrary to the orders obtained by IBRC last year, they deliberately sought to put assets beyond the reach of IBRC. It is believed it will be some days before the Judge decides on the penalties to apply – IBRC sought “committal or attachment”, meaning prison or financial penalties. Sean Quinn Senior is a bankrupt.
IBRC’s CEO Mike Aynsley said this morning in response to the judgment “Bringing this contempt motion was a valid and necessary step for IBRC to take. The proven planned, covert and illicit actions taken by the Quinns and connected parties have resulted in millions of Euros being lost or put at risk. IBRC will continue to seek to remedy this and recover as much of the remaining assets as possible on behalf of the Irish taxpayer.”
Larissa Puga (above, left) employment contract judged to have been altered so as to provide for a USD 500,000 termination payment.
NAMA Wine Lake 
Hardly surprising. A very crude attempt to throw a spanner in the works after the event got the obvious judgement.
Et tu, Brute?
What happened to the cheering and hollering for the “John Ignatius Quinn” stroke?
Surely this was just more of the same?
@wgu, This was messing with the court – a different thing altogether.
I’d change that title were I you. ‘in contempt’ is the term. You really need to stick in ‘to be’.
@Vince, the title was carefully drafted.
There’s been a lot of complaining that there isn’t enough tough legal action against those involved in the financial crisis. But here we are…
misleading the court and others…
Is this the interesting line… ‘There are findings that documents were fabricated and back-dated’.
@NWL
The Spotlight programme which went to air during the case causes me some discomfort – why was a programme essentially about the political and economic scene in Northern Ireland so worried as to losses likely to be incurred by the RoI taxpayer ?
Not suggesting for one moment that Justice Dunne was in any way influenced by its content but the timing certainly fails the smell test.
@YoB, Sean Quinn had his HQ in Derrylin in Fermanagh (Northern Ireland) and it was Derrylin where he was born and breed. He initially declared himself bankrupt in Northern Ireland even though that was ultimately annulled and IBRC made him bankrupt in Dublin. Apparently Sean paid 20% of his tax to the Irish Revenue Commissioners, with the implication that the rest was paid in the UK. And there have been a number of legal cases heard in Belfast, including some related to asset transfers.
https://namawinelake.wordpress.com/2012/05/04/belfast-judge-rules-that-sean-quinn-and-family-transfers-of-assets-smacks-irresistibly-of-an-orchestrated-elaborate-and-illicit-charade/
We had an RTE PT programme on Sean Quinn late last year which made all sorts of accusations and didn’t give Sean an opportunity to respond, and I understand that a complaint has been made by the Quinn family to RTE.
As for Judge Dunne being influenced by a TV programme, you may be confusing the conduct of judges with jury members.
@nwl
Sean Quinn as far as I know paid or at least purported to pay 20% of his income tax in NI. The issue here was nothing to do with his residency it was the potential loss to the RoI taxpayer – as far as I can recollect the Spotlight programme made no reference to the UK taxpayer being out of pocket by the Quinn family movement of a Quinn Company property assets.
It just seems curious that the programme was aired during the case where there was obviously no right of reply and the loss was 100% carried by the RoI taxpayer.
No I’m not in any way confusing judges with jury members – I can only assume Justice Dunne has access to a TV and sometimes even watches it. Judges are human just like the rest of us and subject to exactly the same type of human bias that each of us exhibits from time to time. That’s not my point. The broader point here is that why would the Spotlight programme makers feel the need to fight the IBRC/Irish taxpayer corner as blantantly as they did knowing that the right of reply from the Quinn side could not have been heard. It just seems rather odd, that’s all.
I would suggest that BBC editorial guidelines meant there were exhaustive efforts to secure a right to reply.
Also – what’s your point exactly?
The Spotlight programme featured the same “stars” as the one sided Prime Time programme . The Quinn family have maintained a dignified silence throughout all the legal actions as is appropriate during high court proceedings. Anglo, on the other had have used every opportunity possible to influence and manipulate the entire situation.
True.
John Ignatius has been the perfect British citizen – holding his head high in Belfast while the common rabble in Dublin were grubbily leering at his Ukrainian affairs!
The savage Irish bogtrotter driving the entrepreneurial British gentleman from the land.
Is history doomed to repeat itself?
Spotlight Reply on Now BBC1
The Quinns were basically slow to react to their ‘new’ reality if they were ahead of the game and planned properly is there any chance they would be nabbed.
Anglo are persistent, legal actions in 7 different jurisdictions… I wonder would NAMA be in the same boat?
Anglo entrenched? will the Quinns be equally entrenched when it come to the ‘loans for propping up the anglo share price’ issue?
emotion outplaying financial sense, great viewing for us rubber neckers but is it of any tangible value (besides teaching the next generation how not to do it)
Conclusion
This is an application in which Anglo has faced considerable obstacles, not to say obstruction, in making its case that the respondents are in contempt of court by reason of a number of breaches of the Orders made herein on the 27th June, 2011, and the 20th July, 2011. There have been proceedings in a variety of jurisdictions involving the respondents and others in Russia, the Ukraine, Cyprus, Sweden, Northern Ireland and Belize. They have encountered significant hurdles in obtaining documents and information as to the activities of the respondents. Court files have been examined and copied in different jurisdictions. Affidavits have been obtained from a number of lawyers in different jurisdictions. Anglo has been both defendant and plaintiff in proceedings in a number of different countries. Anglo has been opposed at every step of the way.
Justice Dunne’s verdict is damning.
I have absolutely no sympathy for the defendants in this case.The fact that it took Anglo (IBRC) to get this verdict is indicative.
The fact that insurance policies throughout this jurisdiction are subject to a levy because Quinn Insurance was insolvent and had insufficient capital to meet it’s commitments, rankles. As does the fallout from alleged share support scheme at Anglo.
What do you have to to to commit perjury in Ireland? Oh, I forgot – prosecutions for perjury are only taken against intimidated witnesses in criminal trials.
I hear curious things about contempt – seems there is no clear constitutional or legislative basis. Essentially, judges make it up as they go along. Jurists of strict “rule of law” persuasion are very uncomfortable with contempt despite leading Supreme Court case which used some very creative reasoning to “discover” a legal basis. Could be long-running smelly if someone like Quinn takes it to the European Court of Human Rights.
Perjury is a critical bulwark against gangsterism in jurisdictions such as the US and could be a very cost-effective deterrent against white collar crime if properly deployed in this country. A pennyworth of criminal law is worth several million of regulatory wallpaper. However it seems our legislators have more pressing crimes on their mind, such as blasphemy. I go to bed proud knowing that we have the best damned blasphemy legislation west of Kabul!
@jp
And you’re 100% sure on that fact ?
My point is very simple – the ongoing one sided coverage from State controlled media entities in relation to this case is troubling. I can think of no other such case where during the middle of hearings a programme such as we saw would have been allowed to have been aired, it seems all too comfortable that the BBC NI just so happened to be investigating the background to the case at exactly the time of the contempt hearing was underway, when realistically the outcome to NI/UK taxpayers is of zero consequence in cash terms. I don’t buy it.
My own view is that the State knows it is holding a losing ticket in terms of the Anglo share support Quinn family case. The Quinn family case based on what I can determine looks very sound. The States ODCE case against the Directors looks very sound. It seems to me that the State needed to ensure that it did its utmost to ensure the Quinn family name is as tarnished as it possibly could before these cases were heard as it knows the outcome based on what the ODCE have unearthed during its trawl through Anglo is damning.
The bottom line here is that the State will lose the case against the Quinn family re the share support venture and it cannot afford to win the ODCE case as winning that case and convicting the Directors will likely lead to a series of compensation claims from equity holders who were led up the garden path by the same convicted Directors. Hence the need for the State to get its retaliation in first.
So in conclusion the BBC were put up to this by the shadowy state forces of the Republic?
@YOB, RTE were super-deferential to Quinn when he was sponsoring the Late Late. No Charlie Bird camped outside his door back then. Fortunes of war amigo.
Y or B & NWL
The taxation of directors’ fees is based on the place of registration of a company. The Irish tax case on the issue is Tipping v Jeancard. It can make sense to split one’s income between different jurisdictions to avoid paying Social Insurance as one cannot be insurable in two member States of the EU.
I would not read anything into the income split between different States, other than he continued to draw an income from some companies in the UK. In the case of a privately owned business it also makes it difficult to get a handle on what is going on where activities straddle a border.
The underlying weakness of the Quinn group was well known by many people for a long time before the collapse. Back at the time of the dot com bubble, Mary Harney allowed property assets to be transferred into Quinn Insurance to cover an earlier hole in the Insurance company.
The insurance company had no rating from any ratings agencey so many businesses were precluded from doing business with the group. For example schools in Ireland could not do business with Quinn. Indeed the insurance manager of the GAA at the time had instructed units of that organisation not to do business with Quinn, despite the close connections.
I would suggest an alternative view. Quinn needed to take over Anglo to bail out the Quinn Group, which was already in deep trouble. How better to hide all of your problems than to own your own private bank, just like Mr Gallagher did some decades previously.
A Revenue audit of the Quinn Group’s affairs some years before the collapse raised many issues relating to whether it was in a position to meet its debts . The Quinn group were represented at that audit by a PWC partner and former tax inspector, of whom their web site says he “…. specialises in advising private companies and their owners.”
No mention of the Quinn group on PWC website!
@Niall,
A nice plausible theory. (Quinn taking over Anglo). It may very well have been the dream of Sean Quinn. But how was he to achieve it? He was betting on the fluctuation of a share price through contracts for difference. He did not actually own the shares.
I believe it was a dance of death. From the time he purchased such a large amount of CFDs in Anglo’s shares, both he and Anglo were joined at the hip. Anglo had to fund him or see their share price collapse – and I firmly believe that both the government and the DoF were fully aware and supportive of the illegal (?) share support scheme. The full details should all surface in court eventually.
@ WSTT – I think you have partly answered your own question. Yes, they were joined at the hip. However go back to 2001/2002. Mary Harney as the Minister then responsible for the Insurance industry, was forced to accept the use of property as reserves of the insurance company.
The financial position got completely out of control. Instead of cutting his losses he ploughed ahead. I imagine he also felt that the then FF Government would allow him to take over, together with the other property speculators
@Niall,
I have no doubt that Sean Quinn held ambitions to own the bank, however it could never have happened – he did not own any shares. He owned CFDs. A chimera – they are nothing more than a bet on the movement of the share price.
Quinn notified Anglo of the problem losses at a meeting in the Ardboyne Hotel in Navan. Anglo realised that the market makers had bought the shares to back Quinn’s bets and that the sale of the CFDs would result in the consequential sale of the underlying assets (the shares) which would in turn mean a collapse in the Anglo share price. Anglo felt that it had no alternative but to increase the funding for Quinn’s cash calls as the share price continued to fall.
Whatever Fianna Fail or the other “property speculators” (where did that come from?) may or may not have thought, he was never in a position to take over the bank. As I said he never owned the shares.
The “Maple 10” (if that’s who you make reference to with the term “property speculators” were recruited by Anglo, not by Quinn, to support the share price and they (the Maple 10) bought shares, with Anglo’s money, in order to allow Anglo to force Quinn to dispose of some of his CFDs while allowing the share price to be supported on the other side of the transaction. So the “property speculators” were minions of Anglo – not Quinn. And neither they nor the Fianna Fail government had anything to do with supporting or facilitating Sean Quinn in a takeover of Anglo Irish Bank.
Rewriting history based on supposition and incorrect hypothesis and data does a disservice to a serious website.
@WSTT – i think you’re being a bit “innocent” there stating that CFDs are merely a bet on the movement of shares.
Nice primer here on the how and why of Anglo, Quinn and CFDs:
http://www.independent.ie/national-news/just-three-letters-cfd-at-centre-of-shares-controversy-1644972.html
@WGU,
To quote your own reference:
“What in God’s name are CFDs?
Contracts for difference (CFDs) are a contract between a buyer and a seller where the seller agrees to pay the buyer the difference between today’s share price and the share price at some date in the future.
If the share price rises then the buyer receives the difference from the seller at the due date. However, if the share price falls then the buyer must pay the shortfall to the seller.”
What is that if not a bet on the movement of shares?
@WGU, P.S. The article referenced is factually incorrect on a number of points. There is no “ownership” of the shares – no physical shares change hands. When applied to equities (as in this case), the contract is an equity derivative that allows traders to speculate on share price movements, without the need for ownership of the underlying shares.
The report is also incorrect in its forecast of margins. These are the current margins.
http://www.incrediblecharts.com/trading/cfd_compare_margins.php
Just on a point of interest – They are illegal in the USA. Too risky even for the freewheeling Yanks – but not for Sean.
@ WSTT – It’s a little bit more than betting on the movement when you end up with a leveraged 29% of the company!
It was, to quote from the rest of the article, the strategy of “going dark” and the lure of leverage that was the siren song:
Going Dark:
Leverage:
And it explains that, if buying at only 5% of the share price, a large movement against you can both wipe you out and start to do really serious damage with every % movement against you after that.
The St. Patrick’s Say massacre knocked 15% in one day off the share price:
http://www.independent.ie/business/irish/anglo-irish-banks-bad-loan-losses-expected-to-reach-14bn-2102830.html
After that, it was just a case of the hedgies in London taking John Ignatius behind the woodshed.
@ WSTT – As for being factually incorrect – I chose it more for it’s simple stating of the Anglo/Quinn disaster.
Here’s a proper (but, for the layman, unenlightening) link:
http://www.tddirectinvesting.ie/getting-started/types-of-account/derivatives-trading/contracts-for-difference-cfd/
@WGU,
I don’t know what JI Quinn thought he was doing – but in reality all he did was place a bet on the share price movement.
It may very well that the London “wide-boys” sold him on the fact that he controlled the shares, but in reality he never had any control on either the shares nor indeed the price. And the people who sold him the CFDs shorted them when the realised that he was overexposed. He was swimming with sharks and was just a “humble Cavan farmer” when it came down to it.
As for the 29% punt on the share price, JP McManus in his gambling days said that it wasn’t worth placing the bet if you didn’t feel the loss. I’m not sure John Ignatius would agree with him. Quinn must have been aware that 98% of all players in the CFD market lose money, but chose to ignore it. Hubris again.
The problem with CFD’s isn’t that they are too risky, it is that CFD holders are motivated to see a particular type of change in share price, for shares they does not necessarily own. This is crazy.
If I buy shares I want company performance, not some billionaires betting game, to determine what happens the price. And I would expect this to be protected by law.
Not too many mentions of the word “greed” in this thread. But I guess some people never have enough.
@jp
I simply don’t know in the same vein that you don’t know as to the editorial guidelines surrounding the programme itself but the airing of the programme during the hearings was wrong.
I know little of the case but to me the timing of the programme seems at odds with any sort of natural justice. I can’t recall RTE for instance running a similar investigative programme during the Supergrass trials in the North in the 1980s or the most recent versions last February. As we now know most if not all of those convicted on the back of the evidence of the Supergrass testimony have since been released and those released came from both sides of the divide.
A contempt hearing such as this requires the same level of proof the as in most criminal cases i.e. very high, and surely the citizens in the RoI at the time had significantly more interest in the goings on during the Troubles than what the taxpayer in NI/UK have to the potential losses borne by RoI taxpayers on the back of Companies based in Moscow et al.
I’m sorry I simply do not accept that this is ‘one of those things’; its too coincidental and one sided to be left unexplained.
@Niall
Nice theory but simply daft as a brush. By the way the Revenue Audit process never looks beyond the collection of outstanding taxes, the claim made above is complete nonsense.
@PTMIW
I can only presume Quinn Insurance paid RTE for their sponsorship of their programmes. Explain to me exactly why RTE would not treat them with due care etc. ?
http://www.bbc.co.uk/bbctrust/contact_us/making_a_complaint.html
Knock yourself out
@Niall
I’m open to correction here but I’ll think you’ll find that Quinn Insurance did have a rating from Moodys if memory serves for a period (2006/2007) a rating of ‘B’ if I recall correctly.
I recall this as a client of mine arranged a quote through them at the time.
There is quite a good analysis of the Quinn story here particularly around the withdrawal of ratings http://kathleenbarrington.blogspot.ie/2010/04/quinns-day-of-reckoning-arrives.html
Revenue audits of large cases are quite different. The Quinn audit was carried out by three accountants with specialist skills and from different backgrounds. One had worked in Internal audit in a financial institution, and the other two had other specialist skills for the job.
By the way, a proper Revenue audit starts with what the business does and how he does it. It finishes with ensuring the correct liability is paid on the business activities. Your claim that they work back to front is bizarre.
@Niall
Having been involved with hundreds of Revenue Audits I can assure you I know precisely what I’m talking about. Taxes are raised on activities namely trading and the focus is in virtually all cases large and small is on trading activities. The solvency or otherwise of a business is normally an issue in loss making businesses where problems relating to tax compliance issues raise their head potentially long before audits are even requested, just ask Mick Wallace.
Y or B having carried out Revenue audits for over twenty years, I think I am very clear as to how I carried them out.
I was under the impression that it was not the fact that the CFD bet was made but that when it was made a number of ‘institutions’ were used instead of one, the result was that when it turned instead of swimming with a few sharks he was swimming with all the sharks (all the punters knew who was going to win the race and kept piling on, the bookies couldn’t alter the odds).
the real error was not strategy but operational, by using ‘many’ to buy the CFD, ‘many’ had a interest in the punt and acted in their short term interest.
When Anglo (Seanie and Davie) realised the amount of shares with CFD’s on them (in navan allegedly) they understood the implications… (and laid the bets off, seemingly elsewhere but not really).
The real Q. is, who was aware of the lay-off before it happened?
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