Tycoon Sean Quinn has accused Ireland's financial regulator of getting its sums wrong amid claims his insurance division has a €448m (£400m) black hole in its books.
The Fermanagh billionaire's international business empire, the Quinn Group, said it was ironic the watchdog moved to wrestle control of two insurance divisions on the same day as the Irish government pledged about €30bn (£27bn) to save crisis-hit banks.
“We note that yesterday was marked by significant announcements in relation to the Irish economy and the banking sector, and it is highly ironic that, on that same day, the regulator's action was taken in respect of one of the most successful Irish companies, providing crucial jobs in the |export sector,” the company said.
Administrators have taken over two divisions, Quinn Direct and Quinn Healthcare, in the insurance wing amid concerns over guarantees other subsidiaries gave as far back as 2005 to support debts across the group.
“These guarantees are entirely lawful, do not breach any insurance regulations and were fully disclosed in the statutory accounts of the relevant companies,” the group said.
Quinn said it held talks with the regulator on Monday — less than 24 hours before the watchdog went to Dublin's High Court to secure provisional control of the two businesses.
The company said its financiers and advisers have been working around the clock to answer the regulator's questions and address concerns over the guarantee.
“The guarantees have not been called upon, there was no reason to believe they would be called upon and the regulator was provided with comfort on this by our financiers,” the group said.
Quinn also said it was in the middle of negotiating a refinancing package to ease fears and insisted it was confident of securing a new deal.
“The regulator's analysis that these guarantees give rise to a €448m liability is totally incorrect. The regulator's demand that the guarantees be released was therefore unnecessary and not practical in the time which he allowed,” the group said.
Quinn said it was going through a difficult period but was on target for between €45m (£40m) and €50m (£44m) cash profits in the first quarter of 2010, and more than €20m (£7m) every month this year.
It said the regulator has made the wrong decision.
“We do not believe that his decision was in the interests of any of the relevant stakeholders — Quinn Group, its staff, its customers or indeed the Irish Exchequer, which has received well in excess of €1bn (£890m) in tax from Quinn Group since it was established in 1973,” the group said.
“Even if the regulator's concerns in relation to QIL (Quinn Insurance Limited) were well- founded (which we dispute), it is extraordinary that the regulator was unwilling to give the necessary time to work through those concerns, rather than taking precipitate action which damages the interests of all stakeholders, including the state.”
Quinn also said it entirely |disagreed with the regulator's |assessment that Quinn Insurance UK is unprofitable.
“We entirely disagree with this statement and unless reversed, this direction will be immensely damaging to the future prospects of QIL,” the group said.
The Quinn Life division is |unaffected by the court action.
Quinn Insurance employs almost 2,800 people in Ireland and the UK, out of more than 8,000 workers in the wider group across Europe.
Formed in 1973 by chairman Mr Quinn, its headquarters are in Derrylin, Co Fermanagh, Northern Ireland, the group has successfully diversified over the years into cement and concrete, glass, radiators, plastics, hospitality and property.