Quinn and nephew ‘tried to dupe bank’

Bankrupt businessman Sean Quinn Sr and his nephew Peter Darragh Quinn were the prime movers of a “deliberate and deceptive” strategy to strip Quinn companies of valuable international property assets so as to put them out of the reach of Anglo Irish Bank, it was claimed in court yesterday.

Anglo, now Irish Bank Resolution Corporation and owed €2.8bn by Quinn companies, is seeking orders in the High Court for attachment and committal to prison of Sean Quinn Sr, his son Sean Jr and Peter Darragh Quinn over alleged contempt of court orders of June and July 2011 restraining dissipation of assets.

The defendants deny contempt and Peter Darragh Quinn also said his signature was forged on certain documents, the court heard.

The bank contends the orders were breached via an alleged strategy involving an “elaborate and labyrinthine” structure of companies including in Ireland, Belize, Russia, India, Cyprus, Ukraine, Sweden, and the British Virgin Islands.

The alleged strategy, Paul Gallagher, counsel for the bank said, involved a “mysterious character”, a former Ukrainian railway worker turned corporate strategy expert named Yaroslav Gurnyak or Iaroslav Gurniak; court proceedings in various countries including Cyprus; the alleged backdating of documents; the alleged assignment of valuable debt for nominal or no sums; self-bankruptcies of companies in Russia and Ukraine on foot of debts undertaken in unclear circumstances with doubling and retrospective application of interest rates.

The deliberate intention was to put a large number of valuable international property assets beyond the bank’s reach, it is claimed. Those assets include the Kutuzoff Tower in Moscow and shopping centres in Ukraine.

Mr Gallagher said no explanation had been provided by the defendants why valuable debts were transferred to parties apparently unconnected to the Quinn side.

There were also “very unusual” features concerning minutes of company meetings, documents, agreements and payments, including of $500,000 (€387,000) to a general director of Quinn Properties Ukraine after she was dismissed.

He said IBRC had also learned valuable assignments purportedly made in Apr 2011 to a Belize company, Galfis Overseas Ltd, could not have been made then as it was a shelf company. IBRC contended a power of attorney under which assignments were signed, while dated Apr 1, 2011, was created on Jul 20, 2011.

The case, which involves strong disputes of fact and will involve cross-examination of some defendants, is being heard by Ms Justice Elizabeth Dunne and is expected to last several days.

The court orders at issue were granted in proceedings where the bank claims the Quinn family was trying to put foreign properties with a value of up to €500m, on which the bank claims it has legitimate charges, beyond its reach. The properties are owned via a web of international holding companies.

Yesterday, counsel noted solicitors for the Quinn side had in a Mar 7, 2011, letter acknowledged that, of the total Anglo loans of €2.8bn to the Quinn companies, €455m of those were valid and related to investment in the Quinns international property portfolio.

Mr Gallagher said IBRC contends the defendants had broken the orders granted by Mr Justice Frank Clarke on Jun 27, 2011, and Jul 20, 2011, restraining disposal of assets. The defendants disputed that and contended any steps they took were carried out prior to the orders being made.

He said IBRC contended certain steps were taken before Jun 27 and others after that. The bank believed some steps after Jun 27 were a continuation of earlier steps while others represented “a new change of direction” concerning the manner in which companies were stripped of assets.

There was a clear intent to take steps to put assets of Quinn International Property Group out of the reach of IBRC, he said.

Sean Quinn Sr and Peter Darragh Quinn were the “prime movers” in this while there was one alleged act of contempt against Sean Quinn Jr concerning a Ukrainian firm, he said.


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