Belfast Telegraph

Quinn children used firm like a personal bank, hearing is told

Ciara Quinn, daughter of Sean Quinn (right), after her wedding to solicitor Niall McPartland
Ciara Quinn, daughter of Sean Quinn (right), after her wedding to solicitor Niall McPartland

By Shane Phelan

The children of former Fermanagh billionaire Sean Quinn used the Quinn Group as "their personal bank" and took €1.95bn out of the company, the High Court in Dublin has heard.

The cash was used to cover significant losses from share speculation, property purchases and lifestyle expenses, a lawyer for the Irish Bank Resolution Corporation (IBRC) has claimed.

Paul Gallagher SC said while the children drew modest salaries and portrayed themselves as living modest lifestyles, the reality was "very different".

He said one example of this was the €1m spent on Ciara Quinn's wedding at the then Quinn-owned Slieve Russell Hotel in Co Cavan. The money was never repaid after the hotel was taken over by IBRC.

The barrister said that of €1.95bn taken out of the company some €1.6bn alone came out in 2007. The children were the shareholders at the time.

Mr Gallagher also alleged the children engaged in "a sophisticated and devious fraud" by taking assets out of the family's international property group at a time when such assets were part of the security for massive borrowings.

Counsel for IBRC also claimed significant transactions in the Quinn Group accounts were falsified with the intention of misleading banks and bondholders about the solvency of the group.

His comments came as IBRC opened its defence of an action by the five Quinn siblings, Sean Jr, Ciara, Colette, Brenda and Aoife, against IBRC, and its liquidator Kieran Wallace.

The siblings say they should not be held liable for €2.34bn in loans advanced by Anglo in 2007 and 2008 to fund losses stemming from their father's disastrous speculation on shares.

They also claim the security on the loans is invalid and unenforceable. A key plank of their case is that they were unduly influenced by their father, even though it was they who held the shares in Quinn Group.

They allege Anglo behaved in a "morally reprehensible" manner towards them when they signed guarantees for loans.

The children say they were never informed of the perilous state the bank was in and were never advised by the bank to take independent legal advice.

Sean Quinn Snr began investing in contracts for difference (CFDs) in September 2005. These are financial instruments which allow someone to bet on the performance of a share without actually owning it. Mr Quinn soon concentrated almost exclusively on Anglo shares, but when the bank's share price collapsed he suffered massive losses.

Large sums of money were loaned by the bank to companies owned by the Quinn children to fund "margin calls" as the share price dropped.

The loans were also intended to prop up Anglo's share price.

Mr Gallagher told Mr Justice Garrett Simons the case being brought was "extraordinary". He said the plaintiffs had many opportunities to complain the loans were invalid.

Mr Gallagher said they had sought to portray themselves as "naive and unsophisticated", when the opposite was true.

He said they "knew what they were signing" and "had expert help", when they signed various guarantees related to the loans.

"They had the most experienced and capable people who knew about all of these documents. It beggars belief that these would have been signed without the siblings knowing what they were about," he said.

The case continues.

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