ANALSYSIS:Cyprus, Russia, Turkey, Ukraine, India, Belize and Sweden serve as backdrops in Quinn case
THE CONFLICT between Anglo Irish Bank and its one-time biggest shareholder, the family of businessman Seán Quinn, is growing more complex and international with each hearing.
Yesterday, as Anglo sought to lift an injunction obtained by the family last June in Cyprus, the bank fired a volley of salvos.
The allegations were contained in an affidavit sworn by Anglo executive Richard Woodhouse, a document the family has sought to suppress since the summer months. Anglo alleged that Quinn’s wife Patricia and five adult children, Seán jnr, Ciara, Colette, Aoife and Brenda, “denuded” assets worth up to $200 million from their international property portfolio.
Anglo has security over the €500 million properties in Russia, Turkey, Ukraine and India, and has tried to seize control of them since moving against the Quinns in April over debts of €2.8 billion.
About €2.3 billion were loans to cover Quinn’s losses on Anglo’s share price as the stock plummeted in 2007 and 2008.
The properties were held within the family’s labyrinthine corporate structure. At the top were Swedish companies which held shares in Cypriot companies – which in turn owned Russian companies that owned the family’s properties.
Now the bank has argued that a company, Galfis Overseas, in the Central American state of Belize has emerged as the creditor of the Russian firm behind a Moscow office block owned by the family.
The creditor, owed $276 million by the firm, was previously an Irish company, Cranaghan Property Management.
Anglo claims the family are trying to put assets beyond its reach by setting up a “mirror” structure, the Cranaghan Foundation, for the benefit of the family. Anglo claimed in Woodhouse’s affidavit opened in court yesterday that the family used an injunction obtained in Cyprus last June as cover to “denude” companies of assets securing the bank’s loans.
The Quinns had claimed shares in three Cypriot companies, which own Russian properties, were held in trust by three Swedish companies for the family.
Anglo disputed the existence of a trust but said that if the trust deeds were valid, then Quinn snr would have committed a criminal offence under Swedish law when he signed share pledges to Anglo for the Swedish companies.
A source close to the family said any suggestion of criminality against Quinn or his family was “baseless and hardly deserving of comment”. The allegations were another attempt by Anglo “to blacken the name of Seán Quinn and his family”, the source said. It added that no court has made any finding of impropriety against any family member.
Quinn’s wife and children had argued in the Irish courts that Anglo’s loans to the family were “tainted with illegality” as they had been advanced to prop up the bank’s share price in 2008.
Anglo said in its affidavit that Aoife Quinn now admitted that €500 million was used to repay loans between Quinn companies. This included €200 million to repay a loan to Quinn Insurance.
Anglo said she was now arguing, in a very significant change, that “an overwhelming proportion” of Anglo’s loans were for illegal purposes. Aoife Quinn claimed that Anglo had not provided evidence that was contemporaneous when the loans were made and she was unaware of the purpose of the loans. Anglo said she had available her father, “who was intimately involved in the seeking of the loans in dispute but the Quinn family have chosen to keep Seán Quinn snr hidden in all of their claims both in Ireland and in Cyprus”.
