Quinn: Regulator has put jobs at risk

Billionaire tycoon Sean Quinn tonight accused the Financial Regulator of putting 5,500 jobs at risk after it penalised his family business for a second time.

The multinational Quinn Group, headed by the entrepreneur, immediately wrote to Cabinet ministers claiming the watchdog acted aggressively and unnecessarily as officials walked on to Quinn Insurance company floors.

Two flagship divisions, Quinn Healthcare and Quinn Direct, are now in the hands of administrators after the High Court in Dublin granted a dramatic request from the regulator.

But Quinn said the effective high-profile state control had put its business at risk and would ultimately threaten jobs.

“We feel that this issue could have been resolved to the benefit of all in a relatively short space of time and we will be working with the regulator and the provisional administrators to resolve all outstanding matters,” the group said in a statement.

The regulator claimed there were serious concerns over solvency levels at Quinn, Ireland’s second biggest insurer, if it was hit with an influx of claims.

Issues have been raised over an apparent €448m black hole in the insurer’s assets after values were devastated over the last year. An investigations team has begun probing the company’s affairs.

The Quinn Group said the insurer remained profitable.

“This is deeply disappointing in the context of the continued profitability of the group which is currently in excess of €20m per month,” the company said.

Just over a year ago in a New Year message to staff and customers, Mr Quinn said the insurance division had total assets of €2.1bn with more than €900m in cash and bonds.

Those valuations appear to have suffered massive losses in the last 12 months.

An ill-judged share deal in Anglo-Irish Bank left the normally shrewd investor saddled with debts of €2.8bn and suffering a €1bn personal loss. He went on to describe the stock trades as ill-timed, costly and very much regretted.

Despite these costs, the Quinn Group is expecting to make profits of €1.2bn over the next three years and is on course to pay back all its loans.

It is the second time the regulator has come down hard on Quinn after issuing fines in 2008 – €200,000 to Mr Quinn personally and €3.25m to his family-run business – over internal loans from Quinn Insurance to other wings of the group.

Mr Quinn’s lawyers were not in court to oppose the plan as it was made through an ex-parte application where only one side is represented. They are due in the High Court on April 12.

Administrators will now manage as going concerns Quinn Direct, its motor, home, business and public liability insurance, and Quinn Healthcare, set up when the group took over Bupa Ireland for €150m. It now holds 23% of the private health insurance market.

The regulator and administrators said their aim was to financially restructure the business to offer long-term safeguards.

Despite the court order, the regulator said the firms are continuing to trade as normal and are open for business.

It is understood the administrators can sell the companies if they see fit.

The unprofitable Quinn Insurance UK was also handed over and the regulator has ordered this wing of the insurance giant to stop writing new business.

“Existing UK policyholders will not be affected by this decision as existing policies will remain valid. Customers can make claims in the normal way,” the regulator said.

The Quinn Life division is unaffected by the court action.

Quinn Insurance employs almost 2,800 people in Ireland and the UK out of more than 8,000 workers in the wider group across Europe.

Formed in 1973 by chairman Mr Quinn, its headquarters are in Derrylin, Co Fermanagh. The group has successfully diversified over the years into cement and concrete, glass, radiators, plastics, hospitality and property.

Local SDLP representative Tommy Gallagher said: “Obviously the first thought in everyone’s mind is whether there might be any implications for the wider Quinn Group, which employs a lot of people in Fermanagh and just over the border in Cavan and is a key player in the local economy.

“The Quinn family is held in very high regard in Fermanagh. In fact, they are local champions who have come far since they started out in the gravel business and yet retained the strongest links with the area.”

Provisional administrators Paul McCann and Michael McAteer, of Grant Thornton, said: “The customers of the company are unaffected by our appointment and all valid claims will be met by the company.”

Siobhan Gannon, Quinn Life managing director, said: “The financial regulator has not expressed any concern over the solvency of Quinn Life.”