Loans, fines and losses leave Quinn reeling

BILLIONAIRE businessman Seán Quinn will be glad to see the back of 2008 for a number of reasons.

His failure to disclose a €288 million loan by Quinn Insurance to buy shares in Anglo Irish Bank has cost the insurance company €3.25m in fines.

Mr Quinn had to cough up €200,000 himself to the Financial Regulator.

As a result he has been forced to resign as a director and chairman of Quinn Insurance, one of the biggest motor insurers in the Irish market.

However, the bad news did not end there for the Quinn Group, which bought out health insurer Bupa Ireland in 2007.

Results for last year show the group was hit by exceptional losses that turned a major profit into a huge loss.

Exceptional charges of €829m were incurred in 2007 reducing the recorded pre-tax position to a loss of €425m.

Those exceptional loses related primarily to a provision against amounts advanced to related party investment companies.

“These advances were deemed not to be fully recoverable due to a fall in the value of the underlying investments as a result of exceptionally difficult investment conditions,” the company report stated.

On top of the losses — understood to centre to a significant degree on Quinn Group’s disastrous investment in Anglo Irish Bank and other shares — the group is looking at a further write down of €130m to add to its woes.

That means it is looking at total investment losses over the two years of close to €1 billion, with a significant part of that linked to Anglo.

But the group’s woes may not end here.

The Financial Regulator has communicated its findings to the Director of Corporate Enforcement. It could also decide that the total investment losses might need to be sifted through further to ensure that the rest of the money advanced to companies within the group for the purpose of investments complied with corporate regulations.

However, the Director of Corporate Enforcement’s office refused to comment. A spokesman simply said they were “aware” of developments with the group.

For a man who has built up an empire with gross sales of €2.115bn last year and an operating profit before exceptional items of €315m, Mr Quinn’s Midas touch deserted him when he decided to play the markets over the past two years.

His comments with yesterday’s results sum up his mood: “This past year has been the most eventful in my 35 years in business.

“Our established businesses have continued to trade very profitably and we have being building up a substantial property portfolio in eastern Europe, Russia and India and have also invested heavily in listed equities initially through contracts for differences.

“Whilst the equity losses were one-off and have not put undue financial strain on our business, I am very disappointed with the decisions I made in over-exposing ourselves to equities.”

With losses of close to €1bn over two years, in that regard his observations are somewhat of an understatement. However, the group in general is strong and Mr Quinn’s business acumen is not in doubt.

Sean Quinn remains as overall head of the Quinn Group.


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