A €200 MILLION payout shared by five children of Seán Quinn from his business group during 2008 was used to offset losses on the family’s investment in Anglo Irish Bank, according to a spokesman for the family.
The money was used to reduce the deficit at Quinn Finance, a company controlled by the family used to finance the acquisition of their interest in Anglo, the spokesman said. He declined to disclose the size of the deficit at the company, but said Mr Quinn was “comfortable” with the current position. “Any deficit will be addressed over time,” said the spokesman.
The Irish Times reported last November that Mr Quinn’s five children shared the payout from shareholders’ funds at Quinn Group, which controls the bulk of the family’s business interests.
A spokesman for the company said at the time that the payout had been made “to facilitate the development of their independent wealth portfolios”.
Mr Quinn’s children – Colette, Seán jnr, Ciara, Aoife and Brenda – each own one-fifth of the group.
Quinn Finance, as an unlimited company, is not required to file accounts. The company’s auditors, PricewaterhouseCoopers (PwC), said in a report dated November 12th, 2009, that the firm’s 2008 accounts show “a material uncertainty which may cast significant doubt about the company’s ability to continue as a going concern”.
The auditors said the company had an excess of liabilities over assets at December 2008.
“Quinn Finance is a finance company of the Quinn family, which provided finance to acquire the family’s interest in Anglo Irish Bank Corporation,” the group said in a statement. “As such, the results for the period include the impact of the losses incurred on that investment, hence the inclusion of the matter of emphasis [from PwC] in the audit report.”
This was “not related to the performance of the familys property portfolio which continues to be satisfactory”, the company said.
The company said the Quinn Group advanced loans to Quinn Finance in previous years and that these were “fully provided against and reflected in the Quinn Group accounts in 2007 and 2008”.
There would be “no further impact on the results of the Quinn Group”, the company said. Mr Quinn has never disclosed the exact losses incurred on the Anglo investment. The bank’s shares became virtually worthless when the lender was taken into State ownership in January 2009.
Asked in his only public interview on the subject about how much his family lost on Anglo, Mr Quinn told RTÉ News last January: “It’s more than a billion,” but declined to disclose the amount.
The Quinn Group wrote off €888 million over two years that had been forwarded to the family by the business and lost in Anglo.
The Sunday Timesreported last weekend that Mr Quinn lost €2.5 billion on the investment, citing an internal report by the bank completed two weeks before its nationalisation. The Quinn spokesman dismissed the figure as "speculative", adding that the family's losses on their investment in the bank were "history now".
Mr Quinn and his family amassed an indirect stake in Anglo, which peaked at about 28 per cent of the bank through contracts for difference, a form of share derivative which does not require a public disclosure.
The family later reduced their interest to about 25 per cent, eventually taking a direct 15 per cent stake in Anglo in July 2008. The remaining shares underlying the family’s larger CFD position were placed by Anglo with 10 customers using €451 million in loans from the bank. This transaction, which propped up Anglo’s share price at a volatile time, is one of a number of matters being investigated by the Garda and the Director of Corporate Enforcement.
