IBRC considers fraud proceedings over properties

FRAUD PROCEEDINGS are under active consideration by the Irish Bank Resolution Corporation (IBRC) as part of its efforts to seize European properties linked to unpaid loans advanced to companies owned by the children of Seán Quinn, the High Court in Belfast was told yesterday.

There was no appearance by representatives of Quinn family company Demesne Investments Ltd, of Derrylin, Co Fermanagh, when Mr Justice McCloskey continued to January 26th two injunctions he granted prior to Christmas affecting loan agreements he described as assets of two offshore companies.

The injunctions prohibit Galfis Overseas Ltd, of Belize, and Lyndhurst Development Trading SA, of the British Virgin Islands, from dealing with these assets in any way including any development that might obstruct IBRC, formerly Anglo Irish Bank, from seeking to have agreements between Demesne and other defendant companies before the court, including Galfis, set aside.

The injunctions prohibit the two offshore companies from discharging any monies remitted to them as a result of the loan agreements.

The orders made by Mr Justice McCloskey prior to Christmas detailed loan agreements and assignments made during 2011. The assignments are of interest to IBRC as it has been unable to seize control of a commercial tower in Moscow and a shopping centre in Kiev, worth about $180 million (€140.7 million) and $60 million respectively, which it claims it has pledges over as a result of loans issued to Quinn family companies in the past decade by Anglo.

They have been obstructed by Galfis and Lyndhurst, which have been granted substantial judgment orders in the Moscow and Kiev courts respectively arising out of debts they claimed they are owed by the operating companies of the Moscow tower and the Kiev shopping centre. The offshore companies acquired their interests from the Quinn family’s Demesne Investments.

These developments have threatened State-owned IBRC’s chances of seizing valuable assets linked to the Quinn family loans.

One injunction issued by Mr Justice McCloskey cited a loan agreement Demesne entered into with Galfis. A second injunction order cited a supplementary loan agreement dated April 6th, 2011, between Demesne, Innishmore Consultancy Ltd, and Univermag, the latter being the Ukrainian company that operates the Kiev shopping centre. It also cited an October 7th, 2011, assignment agreement between Innishmore and Lyndhurst, and a November 4th, 2011, supplementary loan agreement between Innishmore, Lyndhurst and Univermag.

Mark Horner QC, for IBRC, told the court IBRC has secured a “Norwich Pharmacal” order from the courts in Belize ordering Galfis to identify its beneficial owners. It is seeking a similar order in the British Virgin Islands in the case of Lyndhurst.

He said contempt of court proceedings in the matter before the court were a possibility, and told Mr Justice McCloskey other possible proceedings, such as fraud or breach of fiduciary duty, were under active consideration.

Mr Justice McCloskey said he expected to hear the action on an unspecified date in March and that he apprehended there might be significant developments in the proceedings in coming months. These could include the defendant companies making an appearance, or making an application for a discharge of the action, or IBRC expanding or initiating new proceedings as the fund of information available to it became more extensive.