Quinn confirms widening of Anglo dealings probe

IRELAND’s former richest man, Sean Quinn, has confirmed that state investigations into his family’s financial dealings with Anglo Irish Bank have been widened.

In a statement released by Mr Quinn yesterday, he accepts that the family has lost a lot of money through their investment in Anglo Irish Bank, initially acquired through share-owning instruments known as Contracts For Difference (CFDs).

But the statement adds there is “absolutely no impropriety regarding the family’s dealings in any transactions relating to any of its investments”.

Mr Quinn built up a stake of more than 25% of the bank using CFDs from 2007 until early 2008. He was unable to pay for all of them so the bank arranged for a group of 10 property developers, now known as the “golden circle”, to take on 10% of his stake. The remaining 15% was placed with Mr Quinn’s family.

This transaction is already under investigation by gardaí as there are strict restrictions on a bank loaning money that is used to buy its own shares. The “golden circle” were loaned €481 million to buy their shares.

Gardaí are looking at how Mr Quinn financed huge margin calls associated with his CFDs as Anglo’s share price fell.

CFDs allow a person to own the rights to large quantities of shares for a period by only putting up part of their value. They must put up more if the shares fall.

In 2008, Anglo shares began to fall sharply after Bear Stearns, a US investment bank, collapsed.

Mr Quinn faced margin calls of hundreds of millions of euro as a result.

The investigations are centring on whether loans from Anglo were improperly used to finance these purchases.