Sean Quinn has told an inquiry into alleged regulatory breaches at Quinn Insurance Ltd (QIL) that he first learned in March 2010 that subsidiary assets were used to guarantee massive loans a number of years earlier.
The existence of the guarantees contributed to the insurance company being placed into administration by the Central Bank of Ireland.
Mr Quinn said he had "huge anger" and still did against his senior executives and his legal advisers when he found out that assets owned by the insurance group had been used to support Quinn Group loans totalling €1.2 billion. "It was a huge disappointment," he said. "I still can't believe it."
Mr Quinn told an inquiry established by the Central Bank that he relied heavily on three key executives – Liam McCaffrey, Kevin Lunney, and Dara O'Reilly.
“I was running the show. They were responsible for administering the company.”
The inquiry centres on allegations that Mr McCaffrey, the former chief executive of Quinn Group, and Mr Lunney, a one-time director of QIL, were involved in QIL subsidiaries providing the guarantees in the 2005 to 2008 period without the knowledge of the rest of the company’s board or its investment committee.
Mr Lunney and Mr McCaffrey were present during Mr Quinn’s evidence, but chose not to put any questions to him.
Shown accounts of QIL subsidiary Quinn Property Holdings, by Eoin McCullough SC for the inquiry, Mr Quinn agreed he had signed them as a director. The accounts referred to the guarantees being investigated by the inquiry.
Mr Quinn said that at the time he would have signed a huge number of documents without reading them.
“I don’t believe there was ever a document that was put in front of me by Liam McCaffrey, Kevin Lunney or Dara O’Reilly that I didn’t sign,” he said.
“I might sign 20 or 30 of those in two or three minutes. I’m not saying that was right, but that’s the way it was.”
Asked if he would read the documents before signing them, Mr Quinn replied: “No I would not. Why would I read them if I trusted those men?”
He said that, when looking at the accounts of the subsidiaries, he would only look at the profit and loss page. “That’s the only thing I would look at, is this thing making money.”
Mr Quinn said it was his understanding from the outset that not just QIL but also its subsidiaries should be used to support the loans . He said he presumed at the time that “everybody understood” this.
Shown what appeared to be board documents where decisions were made about the granting of the guarantees, he said he had never seen them before. Mr Quinn was a former chairman of QIL. His name did not appear on the documents.
Eight subsidiaries of QIL – including Quinn Property Holdings Ltd and Quinn Hotels Ltd – provided guarantees against €1.2 billion of loans taken out by Mr Quinn's then cement-to-property conglomerate between 2005 and 2007.
As the assets of these subsidiaries were being used by QIL to bolster its reserves, the existence of the guarantees meant that the assets may might not have been available to the insurer if it ran into trouble.
The inquiry centres on allegations that Mr McCaffrey, the former chief executive of Quinn Group, and Mr Lunney, a one-time director of QIL, were involved in the QIL subsidiaries providing the guarantees without the knowledge of the rest of the company’s board or its investment committee. The period under investigation spans October 2005 to July 2008.
Mr Lunney and Mr McCaffrey are due to give evidence next week.
