New details emerge on Quinn campaign to prevent $500m portfolio's seizure

ANALYSIS: Bank executive says a legal firm is running the international campaign for the Quinn family

RENTAL INCOME of more than $35 million (€27.7 million) per annum from Russian property formerly owned by the family of bankrupt businessman Seán Quinn is being sent offshore rather than going to the Irish Bank Resolution Corporation, according to the latest evidence to the Dublin courts from the State-owned bank.

A lengthy affidavit from IBRC executive Richard Woodhouse presented to the High Court on Thursday outlined new information it has identified in the campaign the Quinn family has waged to prevent an international property portfolio worth $500 million being seized by the bank, which is owed €3 billion by the family.

Woodhouse said Senat Legal, part of the Senat Group, a legal, business and wealth management operation with offices in Liechtenstein, Austria and Dubai and whose principal is Michael Waechter, was orchestrating the campaign for the Quinns.

According to Woodhouse, Waechter purchased offshore companies at the request of Peter Darragh Quinn, nephew of Seán Quinn, which have since become the holders of multi-million euro assets which the bank believes are being held for the benefit of Seán Quinn’s five adult children: Seán, Aoife, Ciara, Colette and Brenda.

The bank believes Seán Quinn snr is involved in directing the “complex and devious” scheme aimed at securing the valuable properties for his children.

At one stage, a series of Ukrainian firms were established as part of the family’s efforts to hold on to the properties, the shareholders of which were members of Quinn’s extended family. They included: Patricia McMahon, Seán Quinn’s sister; Thomas McMahon, Seán Quinn’s brother-in-law; and Karen Woods, at the time Seán Quinn jnr’s fiancee and now his wife, according to Woodhouse. The property portfolio was owned by way of holding companies that had their ultimate parent companies in Sweden. The bank got security over all the firms involved and much of the property in return for loans worth hundreds of millions of euro.

The bank seized the Swedish holding companies in April 2011. Since that date, according to Woodhouse, Russian rental income of $35 million has not been accounted for. A Russian businessman, Golyshev, who manages the properties in that country, has told a Russian lawyer acting for IBRC, Dmitry Dyakin, “his instructions are to ensure that all income received by Finansstroy is placed offshore, and that he has done so”.

The bank has charges over all the holding companies involved in the portfolio, but does not have direct mortgages on all the properties. The portfolio is located in Russia, Ukraine and India, though the unsecured, or unmortgaged, properties are mostly in Russia. These are worth about $120 million.

In evidence earlier this year to the Dublin courts, Peter Quinn said he believed IBRC would be focused on the “big ticket” properties and that the lesser, unsecured assets “would be the easiest things, I suppose, to get for the benefit of the Quinn family”.

He said he had put in place a scheme to keep the assets from the bank, but he had not taken any steps once he had been instructed to stop on June 27th, 2011, by the High Court. A ruling on whether he, Seán Quinn, and Seán Quinn jnr had acted in contempt since is due shortly.

Companies based in Panama and Belize have become the owners of so-called unsecured properties in recent times and Woodhouse believes information unearthed recently shows the companies are holding the properties for the Quinns.

During his evidence to the contempt hearings, Peter Quinn said he met with Waechter in Dubai on June 20th, 2011. He said he asked Waechter to set up a number of companies “for the Quinn family”, and that some of the unsecured assets would be transferred to them.

He produced an email string between Senat and Aleman, a Panamanian law firm. The first email appeared to name a number of Panamanian and Belize companies, but their names had been edited out. His solicitors, Eversheds, later confirmed to IBRC’s solicitors, McCann Fitzgerald, that their client only had the edited version of the email. However, in a case in Belize, IBRC got access to an unedited version of the email with the companies’ names. The companies were established on June 22nd, 2011.

“It is my belief that these companies are within the control of the Quinn family, although the mechanism by which the companies are held on its behalf is not yet apparent,” Woodhouse told Mr Justice Peter Kelly.

He gave details of events affecting the properties and involving these companies. One example is StroyTorg Centre LLC, a Russian company that owns property in Ekaterinburg worth about $1.15 million. Ownership of this company has moved to Marfine, a Belize company that is one of those named on the email.

Stephen Kelly, acting on the basis of power of attorney granted by his wife, Aoife Quinn, acted in the affair, according to Woodhouse, who gave similar examples of other Russian properties ending up in the ownership of the companies cited in the email.

He told the court about a property in Hyderabad, India, worth $80 million, owned by an Indian company which included Seán Quinn snr and Peter Quinn among its directors. New shares in this company were issued to Mecon FZE, a company in the United Arab Emirates, on June 22nd, 2011. According to Woodhouse, IBRC has recently established that the domain name for Mecon was registered using Waechter’s name and the fax number for Waechter’s office.

Woodhouse’s affidavit grounded a successful application to Mr Justice Kelly for the freezing of the assets of the Quinn children, Peter Quinn, Stephen Kelly, and Niall McPartland, husband of Ciara Quinn. The interim orders are up for mention next Wednesday. A request for a comment from the Quinn family got no response.