In October 2008, after the Irish Financial Regulator imposed record fines [3.25million] on Quinn Insurance Ltd, and on Seán Quinn personally [200,000], Seán Quinn resigned as chairman and as a director of that company, but not from the Quinn Group. The key issue, at the time, was a loan of 288million, extended from the insurance company to another related company, which was used to part finance the Quinn family’s purchase of shares in Anglo Irish Bank. It later emerged that they had actually built up a stake in Anglo Irish of 25 per cent without informing the market and that, under pressure from the regulator, approximately 10% was bought from the family by a group of wealthy individuals rather than the shares going on the open market. Those indivduals haven’t, to my knowledge, been named. Now, as the Irish Times notes, the Quinn family owes Anglo Irish approximately 2.8 billion, and the ‘Celtic Chernobyl’ is owned by the State. And, as the Irish Times report also notes
Guarantees totalling 1.2 billion provided by Quinn Insurance subsidiaries to cover Quinn Groups debts prompted the Financial Regulator to seek the appointment of provisional administrators in the High Court earlier this week.
The Quinn Group reacted to the appointment by calling the decision “pre-emptive, aggressive and unnecessary” and, as another Irish Times report notes, “used similar language in a letter to all Government Ministers”.
Despite questions from political friends and foes in the Dáil, the Irish Minister for Finance, Brian Lenihan, has defended the Financial Regulator as acting “in the proper performance of his functions”
The BBC reports that politicians here are to meet Quinn Group management at the company headquarters in Fermanagh today.
And RTÉ reports that “Cavan Chamber of Commerce has announced is is to hold a rally in support of Quinn Insurance and its employees in the town next week.”
But it’s difficult to disagree with yesterday’s Irish Times editorial
The successful appointment of provisional administrators by the courts suggests that the Financial Regulator has passed the initial test in this regard in relation to Quinn Insurance, the motor, health and general insurer within the Seán Quinn group. All the indications are that the group will contest the appointment by any means at its disposal, including exercising its political muscle. That is the Quinn Groups right and it intensified its fight back yesterday with a strongly worded statement. As things stand, however, it would appear to have a difficult battle ahead.
The group has a history of falling foul of the regulatory authorities when it comes to the all-important issue of the financial reserves that underpin the insurance policies that it has written for Irish families and businesses.
The repeated blurring of the lines between what is Quinn Insurances money; the Quinn Groups money and on occasion the Quinn familys money is simply unacceptable for an enterprise that enjoys the public trust. [added emphasis]