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Irish tycoon ousted from empire over bank losses

Irish tycoon ousted from empire over bank losses

Sean Quinn has long been one of Ireland's greatest success stories, and his name adorns everything from cement mixers to luxury hotels. Now he's become the biggest casualty of the nation's worst banking disaster.
Anglo Irish Bank received government approval Thursday to strip Quinn and his family of any role in owning or managing the Quinn Group's 13 largely profitable divisions. The move completes a spectacular 4-year fall from grace from his status as Ireland's wealthiest man.
"On a personal level one must feel very sorry for him ... but he made a couple of very serious mistakes," said Finance Minister Michael Noonan.
Quinn destroyed the financial foundation of his empire by gambling billions on the future success of Anglo _ right before Ireland's property boom went bust. He used an ill-regulated financial instrument for buying the shares from Anglo, using money borrowed from Anglo, without having to declare to shareholders that his family stake reached 28 percent.
Those Anglo shares were rendered worthless by its insolvency and 2009 nationalization. Quinn owes Anglo more than (EURO)2.8 billion ($4 billion), much of it secured against his successful businesses.
One year after Anglo forced his Quinn Group to enter bankruptcy protection against his will, it forced him to surrender ownership because he can't pay the loans.
"Anglo Irish Bank is owed an enormous amount of money," said the bank's chairman, Mike Aynsley, who described the negotiations to push Quinn out of the empire he forged "very, very difficult." He suggested that much of Quinn's debt would have to be written off in favor of reclaiming losses through the operating profits and eventual sale of Quinn Group assets.
"We're dealing with someone who has put an enormous component of his life into developing very successful businesses, and now he's lost them," Aynsley said.
He and Noonan said in separate interviews that U.S. insurance company Liberty Mutual would enter a partnership to own and operate Quinn-direct Insurance, the third-largest insurer in Ireland, but details of the agreement have yet to be confirmed. Noonan said Liberty Mutual's entry into the Irish market was "very good news."
Quinn-direct has three units providing policies for cars and homes, pensions and life, and health care that together employ more than 1,500 people in the Republic of Ireland and the British territory of Northern Ireland. The group as a whole employs about 8,000 people worldwide.
Quinn, 63, declined to comment.
The son of a poor farmer on the Northern Ireland border, he started his first building-materials business in 1973 by extracting gravel from family land. Over a decade he built that trade into Quinn Cement, whose business soared along with Ireland's transformation into a property-obsessed Celtic Tiger economy in the mid-1990s.
Quinn has been the major private employer in the opportunities-poor border region of Ireland and still lives there _ right beside his most ostentatious spa hotel and golf resort, the Slieve Russell with its fountains and helicopter pads.
But his interests in investment property, hotels, plastics, chemicals, glass and radiators mean that the Quinn Group owns factories in Britain, Belgium, Germany, France, Spain, the Czech Republic and Slovakia; shopping centers in Turkey and Russia; and office blocks in Ukraine and India.
Now Ireland's government _ and, ultimately, its 4.5 million citizens _ owns them all through the nationalized Anglo.
Analysts were quick to note that this represents no windfall for taxpayers, because they are already on the hook for a (EURO)29 billion bailout of Anglo, by far the worst of Ireland's debt-crippled banks. That figure is reckoned to include much, if not all, of the money loaned to Quinn.
Aynsley said Anglo doesn't plan to lay off any staff in Ireland and has committed to retaining its major acquisitions for at least five years.
But Quinn-direct workers expressed fears about Quinn's ouster, believing he was more committed to creating jobs in Ireland than in maximizing his own profits.
"Who's to say they won't do a business review in six months and say they no longer need the border area and outsource work overseas?" said Caroline Forde, a Quinn claims manager.
"If you come down to the border area and look at factory after factory, all put here by Sean Quinn _ if this is gone, there is no future for many people," she said.
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Online:
http://www.quinn-group.com/about/about.cfm
http://bit.ly/f3kEC9
http://www.angloirishbank.com/


Updated : 2021-10-22 11:05 GMT+08:00