Ulster tycoon Sean Quinn attacks move to seize family firm
Northern Ireland tycoon Sean Quinn went on the offensive last night accusing the Financial Regulator in Dublin of putting 5,500 jobs at risk after it penalised his family business for a second time.
Mr Quinn wrote to every Irish government minister after interim administrators were appointed to Quinn Insurance by the High Court following a request from the Financial Regulator.
The regulator raised “very serious concerns” over solvency levels at the insurance giant if it was hit with an influx of claims.
Mr Quinn immediately wrote to cabinet members, slamming the regulator's actions as “highly aggressive and unncessary” and claiming the move “endangers” 5,500 jobs across the Quinn Group.
Enterprise Minister Arlene Foster last night said she would be seeking assurances on the future of the Quinn plant in Enniskillen.
She said: “Invest NI will seek clarity from Quinn Insurance and the joint administrators regarding any likely impact on the Enniskillen site.”
Meanwhile, an employee of the Enniskillen office has described the shock of finding out that administrators had been called in.
He told the Belfast Telegraph: “There was an a very short email — just two sentences — sent out just telling us the basics that it has been taken over by the administrators and that business would continue.
“We are just in shock at the moment. Nobody really knows what is going on, what has happened or why it’s happened. I think everyone is worried about their jobs but that’s because we don’t know what is going on, that’s all.”
The Financial Regulator has been locked in intense negotiations with Quinn Insurance since last December after the insurer indicated it could fall below minimum solvency requirements.
A month later, the Financial Regulator asked Quinn Insurance to draw up contingency plans in the event of the entire Quinn Group going bust, documents lodged with the High Court yesterday reveal.
The High Court dash wasn't triggered until last Wednesday, when the Financial Regulator learned that assets of Quinn Insurance had been used to guarantee hundreds of millions of the Quinn Group's debt.
The guarantees, some of which had been in place since 2005, reduced Quinn Insurance's reserves by €448m and pushed the levels below the regulatory minimum, prompting alarm at the regulator's office.
The regulator then investigated whether Quinn Group's lenders would release the guarantees and allow a €35m injection to shore up the insurer.
When the lenders and bondholders declined, the regulator yesterday asked the High Court to install an administrator to effectively take over the running of the insurance company. Grant Thornton duo Paul McCann and Michael McAteer were appointed as provisional administrators until the case comes before court again on April 12.
The pair immediately travelled to Cavan, where they began meeting with management. The Financial Regulator also dispatched a “small team” to Cavan yesterday as it begins its own investigation into the circumstances surrounding the loan guarantees.
Sources yesterday said “nothing had been ruled out” in relation to the course of action that might be taken.
Despite the moves, both the regulator and the administrators stressed that Quinn Insurance continues to accept new policies and honour existing ones, while Quinn Life is completely unaffected by the developments.
The Financial Regulator, who is legally responsible for supervising insurance businesses, told the High Court that Quinn Insurance had “significantly breached” its solvency ratios, had failed to deliver a financial plan aimed at restoring its health and was operating in a way that “was jeopardising and prejudicing the rights and interests of those who have insurance policies with the company”.
In last night's letter to cabinet members, Mr Quinn insisted his insurance company was on track to reach the regulator's solvency requirements “by year-end”.
He went on to ask the ministers why the regulator was taking this action when “the group and Quinn Insurance are in a position to meet all their respective obligations from a cash perspective” and why the Government and its agencies were “unwilling to give the necessary time to Quinn Insurance when all parties were confident that a satisfactory conclusion could be found”.
How selling gravel cemented a road to riches
From cement to hotels and insurance, it seemed that Sean Quinn (63) could make a mint in any sector he chose, the diversity of his interests appropriate to a man who marries many contradictions.
The unassuming billionaire, who despite a far-flung business empire, is synonymous with Fermanagh, the county of his birth.
Sean Quinn famously built his international empire out of a hole on his father's small farm and a borrowed £100.
Mr Quinn left school aged 14 to work on the family farm in Derrylin. With a borrowed £100 he dug a hole on the 23-acre small-holding, extracted gravel, washed it and sold it to local builders.
From humble beginnings he built huge wealth, but continued a famously modest lifestyle also espoused by his wife, and five children who work in Quinn Group.
His public appearances are few and far between, but he is still recognisable.
“I live a very simple life and that’s the way I want to continue living that life,” he said in an appearance at his best known hotel, the Slieve Russell in Co Cavan in 2007.
His employees, particularly those on his doorstep in Cavan and Fermanagh, look up to him as the agent of employment and wealth creation in border counties, which would have high rates of unemployment without him.
His personal reputation is as an ordinary man with extraordinary wealth who enjoys ordinary pleasures, such as watching a Gaelic football match with the Fermanagh county team he once captained, or his favourite pastime, a game of cards.
He used his GAA contacts to spread his business into the Republic and took on Cement Roadstone Holdings, which previously had a monopoly on cement.
That market cornered, he moved into hospitality, glass, insurance and health and now employs 8,000 people, including around 5,500 in Ireland. His Hilton Hotel in Prague was recently graced by guests President Barrack Obama and his wife Michelle.
Mr Quinn has been tasting if not business failure, then definitely the slings and arrows of outrageous fortune. He lost over £1bn on his stake in Anglo-Irish Bank. He had invested €715m (£636m) in Anglo-Irish Bank, part financed by a loan from Quinn Insurance of €288m (£256m). The movement of the money from Quinn Insurance to another part of the group triggered a record fine from the Financial Regulator. He resigned as director and chairman of Quinn Insurance in 2008, and said: “We will pay the fines and move on.”
In January, he told staff in a newsletter: “Last year and its predecessor were difficult for all of us.''
If 2008 and 2009 were difficult times for the group, how he sums up 2010 in the next staff newsletter will make interesting reading.
Home county rallies round
In Fermanagh, where Sean Quinn grew up and made his fortune, locals rallied to support the man affectionately known as ‘The Mighty Quinn’.
Although his success has seen businesses grow across Europe, he is fondly remembered by many who knew him as a teenager on a local farm.
Gerry McHugh, Sinn Fein MLA for Fermanagh and South Tyrone, has known Sean Quinn for a number of years, and said this latest hit will not deter the businessman.
“To a certain extent this all looks like a bit of an over-reaction. Sean Quinn is a leader in innovative business and I would hope this is just a blip to be honest. As a business leader who has given so much to this area I would think he has the whole support of the people of Fermanagh.”
Balfour Quarries, a company based in Irvinestown, has insured their fleet of vehicles with the Quinn Group for more than 10 years now and Manager Matthew Murphy said they have no intention of switching to anyone else.
“Put it this way, this news may have come as a shock to us but we haven’t been ringing around any other companies since hearing it. We have always been happy with their service,” he said.
UUP MLA Tom Elliot said assurances from the regulator that insurance policies will not be affected still leaves questions unanswered.
He said: “There are questions around the coverage for people who have accidents — are they still covered or not? It is all very uncertain.”