BANKRUPT BUSINESSMAN Seán Quinn and his nephew signed documents in Russian which neither could read and which assigned multimillion euro loans of Quinn firms to a Ukrainian man they had never met so as to keep them from Anglo Irish Bank, Mr Quinn’s nephew has told the High Court.
Peter Darragh Quinn said there was “a gentleman’s agreement” made in April 2011 with Yaroslav Gurnak – a former railway worker from west Ukraine – under which loans were assigned to him for nominal sums, with the Quinns to get 20 per cent of anything recovered.
This arrangement was entered into after taking advice from Russian lawyers and he believed it was better to take a risk with someone the Quinns did not know at all than to be in a situation where it was guaranteed they would get “nothing” from Anglo.
Peter Quinn, general manager of international property assets held by the Quinn Group from 2009, was cross-examined yesterday in the continuing hearing of the bank’s application for orders for attachment and committal against him, Seán Quinn and Seán Quinn jnr for alleged contempt.
The bank contends the three had breached court orders of June and July 2011 restraining dissipation of assets in the Quinn property group. They deny contempt and contend steps to place assets beyond Anglo’s reach were carried out prior to the orders.
When asked by Paul Gallagher SC, for the bank, why anyone would enter such an alleged arrangement with an unknown Ukrainian, Peter Quinn said it was to keep assets from Anglo.
As an accountant he knew some of the actions he took were not of benefit to the companies involved, but said the intention was to benefit the Quinn family as ultimate owners of the assets.
The actions taken included assignments of multimillion euro loans for nominal €100 payments and the doubling of interest on loans to 30 per cent, plus the backdating of the 30 per cent rate to 2007, and the insolvency of a Russian firm, Finansstroy, and other Russian firms. The effect of such actions was to potentially reduce the assets of those firms, he agreed.
His understanding was he had done nothing illegal, but he accepted the doubling of the interest rate was not to Finansstroy’s benefit and increased the debt of that company by some €40 million. He agreed he entered into arrangements whereby Finansstroy guaranteed debts of other companies so as to potentially reduce its assets.
Mr Gallagher put it to Peter Quinn that such steps were all part of “an illegal plan” to ensure creditors could not recover monies.
He denied there was an “overriding scheme” to move assets out of the reach of Anglo and said the plan was constantly changing. He had focused on taking out unsecured cash assets from Russian companies and Seán Quinn had probably become aware of his plan in mid-April 2011.
