Courts may face challenge by Quinn

BUSINESSMAN Sean Quinn and his family may challenge the jurisdiction of the courts to hear proceedings by Anglo Irish Bank aimed at preventing the family transferring assets, over which the bank holds security, from Swedish companies which hold the family’s properties in several countries.

Anglo, owed €2.8 billion by Quinn interests, claims the Quinn side had set up a “mirror corporate structure” — The Cranaghan Foundation — in a “systematic attempt” to transfer assets to “mirror” Quinn companies for the benefit of the Quinn family, including Sean Quinn’s children and grandchildren.

Such actions were “severely hampering” Anglo’s ability to deal effectively with the property assets and it was concerned those assets may “simply disappear,” Anglo senior executive Richard Woodhouse said in an affidavit.

He claimed Peter Quinn — Mr Quinn’s nephew who managed the family’s international property interests — had moved €4.5 million from a Russian bank account into which rental income on a Moscow office block was paid to meet loan repayments to Anglo.

Paul Gallagher, counsel for Anglo, told the High Court yesterday the bank had just learned that a company called Finansstroy — which had funds in a bank in Russia — had filed for bankruptcy and funds were transferred after that on June 3. What impact that had, he did not know, counsel said.

Mr Gallagher said his side had also learned an injunction was obtained against Anglo in a district court in Nicosia, Cyprus, which was returnable to next week. He knew no more than that.

Mr Justice Frank Clarke has adjourned the Anglo proceedings to Friday to allow the sides make further preparations for the hearing of Anglo’s application for an interlocutory order (to apply pending the outcome of a full legal action) restraining the transfer of assets from Swedish companies holding Quinn family assets in Russia, Turkey, Ukraine and India. The judge continued to tomorrow interim orders granted by him last Monday restraining that transfer.

The case is against Sean Quinn, his children Ciara, Colette, Sean Junior, Brenda, Aoife, his nephew Peter, two of his sons-in-law — Stephen Kelly and Niall McPartland — and two companies, Quinn Investments Sweden AB and Indian Trust AB.

The Quinn family’s international properties are worth an estimated €500m and the interim orders secured by Anglo effectively freeze the corporate structure of the property group.

Brian O’Moore, for the Quinn side, said there was potentially an issue about the ability of the court to make orders that would have ramifications in Russia, Cyprus and Sweden.

He said the District Court of Nicosia had issued an injunction on June 26 against Anglo and Kieran Wallace (the receiver appointed by Anglo over shares in various Quinn companies). His side was neither consenting, nor objecting, to the interim orders continuing and noted Anglo was to provide it with corrections to certain matters in Mr Woodhouse’s affidavit, Mr O’Moore added.

Mr Justice Clarke said he had not ruled on jurisdiction when granting the interim orders but had made a finding there was a sufficient case for the interim order.