Businessmen face threat of jail after judge finds them in contempt of court

Bankrupt businessman Seán Quinn, his son Seán, and nephew Peter Darragh Quinn, could face jail after they were yesterday found guilty by a High Court judge of contempt of court.

Ms Justice Elizabeth Dunne ruled the three were in breach of court orders restraining them putting multi-million euro assets in their international property group beyond the reach of the former Anglo Irish Bank.

All three engaged in a “complex, complicated and no doubt costly” series of steps designed to put assets beyond the reach of the bank, in “a blatant, dishonest and deceitful manner”, the judge said.

Ms Justice Dunne said she was satisfied beyond reasonable doubt they were guilty of contempt. All three were “untruthful” at times to the court, Seán Quinn Snr and his nephew were also evasive and uncooperative and she was “not impressed” with the evidence of any of them, some of which was “frankly unbelievable”.

The judge will rule on Friday what sanction should be imposed but indicated, given her findings, she would find it “very difficult” not to include a “punitive” element.

The bank previously said it wants a punitive sanction as well as a coercive one and is to indicate to the Quinn side by 8pm today what sanction it proposes.

In her judgment which was sharply critical of all three, Ms Justice Dunne found they “consciously misled” courts here and abroad and sought to deprive Anglo of assets which would go some way towards discharging their “admitted indebtedness”.

The Quinns accepted they owe the bank €455m but denied owing it an additional €2.3bn, she said. Instead of trying to repay the admitted debt, the Quinn family and especially the three had taken “every step possible” to put assets beyond the bank’s reach.

Seán Quinn had during his evidence spoken of the Quinn Group and its importance as an employer of 7,000 people and one could appreciate the ability that led to the creation of such a business empire, she said. He had also spoken of the “honourable, respectable” way in which the businesses of the Quinn Group were run.

“I wish I could say the same about the manner in which the respondents have dealt with the adverse circumstances in which they now find themselves having regard to the collapse of the Quinn business empire,” the judge said.

The behaviour of the three was “as far removed from the concept of honour and respectability as it is possible to be”.

The three had opposed and obstructed Anglo’s contempt proceedings “every step of the way”, leading to proceedings in several countries.

Irish Bank Resolution Corporation, formerly Anglo, had alleged contempt of orders made in June and July 2011 by Mr Justice Frank Clarke restraining dissipation of assets in the International Property Group valued at up to €500m.

The contempt application arose in proceedings by the bank against the three, other Quinn family members and some companies aimed at protecting assets in the IPG. The three admitted steps were taken to put assets beyond the bank’s reach but denied any steps were taken after the court orders were made.

Ms Justice Dunne upheld claims of contempt against Seán Quinn Senior and Peter Quinn via their involvement in assignment of about $130m (€104m) worth of loans to Galfis Overseas Ltd, a Belize entity, for nominal consideration on or after Jul 20, 2011, and in backdating those loans to Apr 2011. She also found contempt against the two via their involvement in an assignment in July 2011 of a €45.2m debt to a Northern Ireland company, Innishmore, controlled by Peter Darragh Quinn, with a view to taking control of a Ukrainian property asset — the Univermag shopping centre — worth about $78m. A court in the North recently declared that assignment was invalid.

She ruled all three were guilty of contempt arising from their involvement in late Aug 2011 in a process leading to a $500,000 payment being made out of the accounts of Quinn Properties Ukraine to its general director, Janis Puga, just as IBRC was taking over QPU. That money remains frozen and all three had denied any involvement in the transaction.

The judge found Peter Quinn’s evidence “evasive, less than forthright, obstructive and, at times, untruthful”. He admitted misleading affidavits were sworn by and on behalf of the Quinn family in a legal action by them in Cyprus, she also noted.

Peter Quinn, she concluded, “would have said and done anything to aid the plan he had conceived to put assets beyond the reach of Anglo”.

Seán Quinn Sr was also evasive and uncooperative and on several occasions in his evidence embarked on lengthy criticism of Anglo rather than answer questions, she said. She did not accept his evidence alleging he signed documents in Apr 2011, and not after that date, to put assets beyond the bank’s reach.

It was “impossible” to accept Seán Quinn Snr’s claim he had no hand, act or part after Apr 2011 and she was satisfied he gave his imprimatur to the plan to put assets beyond the bank’s reach.

Seán Quinn Jnr had also not told the truth in his evidence, she ruled. His evidence about the purpose of a trip to Kiev last August — when the Puga payment was made — was “simply unbelievable”.