IBRC wins temporary stay against seizure of Q City in India by watchdog

Irish Bank Resolution Corporation (IBRC), the State-controlled remains of Anglo Irish Bank, has won a temporary reprieve against Indian officials who seized control of Q City, an $80 million technology park in Hyderabad formerly controlled by the family of Seán Quinn.

IBRC, run by KPMG liquidators Kieran Wallace and Eamonn Richardson, gained control of Q City earlier this year, as part of their global hunt to repossess former Quinn assets to satisfy judgments registered by the bank.

Last month, however, India’s Enforcement Directorate (ED), a financial crime agency, issued a “seizure order” against Q City.

The ED alleged that more than $16 million had been illegally moved out of India by Mack Soft Tech Private, the former Quinn company that owns Q City, between 2012 and 2016, before IBRC gained control.

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IBRC challenged the seizure order in an Indian appeals court, which last week granted a temporary stay, giving control of Q City back to IBRC. The matter is expected to return to court in Hyderabad for a full hearing in several months.

Indian officials have argued that Mack Soft breached financial laws through “sham” transactions to salt money out of the company and put it beyond the reach of creditors.

The alleged fake transactions included deals for legal services and software with companies in Hong Kong, Singapore and Dubai.

IBRC argues the transactions were carried out when Q City was not under its control, and assets that the bank needs to satisfy judgments should not be taken.

‘Mesmeric complexity’

Legal papers filed by the ED describe a scheme of “mesmeric complexity” to “siphon” $16.48 million out of India in at least 20 transactions over four years. ED draws upon evidence from court judgments delivered in Ireland as part of IBRC’s long-running battle with the Quinns, as well as statements from Indian locals who were employed by Mack Soft at the time of the transactions.

Indian executives alleged to ED they were appointed as “dummy directors” of Mack Soft, and “told” to sign documents to enable the disputed transactions without reading the papers.

One Indian employee said he was made sign documents to enable a transaction in Dubai. But he later told the ED that he did not know any details, had never travelled to Dubai to do the deal, and didn’t even have an Indian passport.

The IBRC liquidators previously alleged to the High Court in Dublin that Q City took in rents of $37 million between 2011 and 2017, but only $88,000 was left in its accounts.

The complex, which comprises 245,000sq ft of prime office space in India's Hyderabad tech hub, was one of most valuable international property assets previously owned by the Quinns. Tenants include tech giants such as Amazon.

IBRC was unavailable for comment.