Inside the world of business
Tangled web of Quinn's Demesne
ACCOUNTS FOR the four years 2008 to 2011 have just been filed for Demesne Investments Ltd, the Quinn family company that plays a central role in the international property portfolio built up by Seán Quinn during the boom years.
Quinn was a director of the company up to April 2011. The current directors are appointees of the Irish Bank Resolution Corporation, which incorporates the Irish economy’s nemesis, Anglo Irish Bank. The company’s registered address is at Quinn’s homeplace of Derrylin, Co Fermanagh, and the company is a UK company. The directors, one suspects, tread carefully if they ever visit Derrylin.
Demesne was used by Quinn to loan money to foreign property holding companies associated with the international properties he bought for the inheritance he wanted his children to receive. One of the company’s functions was to assist in getting money out of jurisdictions such as India, Russia and Ukraine, where the valuable properties were located.
As the accounts declare, during 2011 IBRC became aware the right to £143 million (€177.6 million) owed by Russian and Ukrainian companies to Demesne had purportedly been assigned during that year to companies in Belize and the British Virgin Islands for nominal considerations. The Belfast courts have now overturned these purported assignments.
However this doesn’t mean Demesne has secured the funds it is owed. According to the 2011 accounts, Demesne has made a provision of £144 million to provide for the possibility that the funds may never be recovered.
The provision was £98 million at the end of 2008 and climbed steadily on each of the years since. The accounts say the chance of recovering the money depends on the outcomes of a number of court cases, and other matters.
The accounts, which are signed by the current directors of the company for each of the four years just filed, do not give any information about the cost of the huge number of legal actions currently under way between the bank and the Quinn family in jurisdictions around the globe.
The location of the tens of millions of euro in rental payments that the properties have produced in the period since the bank’s share receiver was appointed is also not covered by the accounts. A recent court hearing in Dublin was told some of this money is being directed to offshore companies.
All in all it is a drain on public resources that the country could do without and another example of the “perfect storm” aspect of the plight we are all in.
O'Leary laughs it off
IT WOULD have been interesting to be a fly on the wall for the meeting in Brussels yesterday between Michael O’Leary and officials from the European Commission to discuss Ryanair’s surprise €694 million bid this week for Aer Lingus.
Especially after Bloomberg revealed that at a presentation given in the past month, O’Leary had poked fun at the commission.
He showed a slide of former North Korean leader Kim Jong Il with a speech bubble praising the EU’s guidelines on state subsidies for airports.
Ouch.
While O’Leary’s irreverence usually goes down well with his audiences, it is unlikely to have amused the commission, which takes itself very seriously.
It’s not clear if O’Leary was able to sweet talk the officials yesterday. For once, Ryanair was uncharacteristically tight-lipped about its dealings with the EU’s civil service.
QUOTE OF THE WEEK
"Liability and control belong together"– German chancellor Angela Merkel, arguing that members of the 17-nation currency union must transfer control over national budget and economic policies to Brussels before Germany would consider common debt issuance
NEXT WEEK
Troika inspectors expected to return to Athens to review reform progress in Greece
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