Quinn Pawns Bow The Knef
What transpired last week over the Financial Regulatorâs actions against Quinn Insurance was an attempt to put the interests of a tycoon above the public interest. How little has changed, writes Michael Clifford
Quinn workers protesting last week: the company does not recognise trade unions, so the interests of workers are tied to those of SeĂĄn Quinn and his family Last Sunday, the chairman of Fermanagh GAA issued a statement of condemnation. Peter Carty âcondemnedâ the appointment of provisional administrators to Quinn Insurance by the financial regulator, Matthew Elderfield.
âFor almost half a century, the Quinn family has been involved in this association, at all levels and in many roles. Never, in our experience, has any member of that family failed to meet his or her commitments to the community and the broader society of Fermanagh and Ireland,â Carty wrote.
âTherefore, despite the contrary assertions of the regulator and the Minister for Finance, we have no hesitation in accepting SeĂĄn Quinnâs word that he would pay all his liabilities as they fell due and that there was no risk to policy-holders.â
Also on Sunday, the usually sensible GAA pundit Colm OâRourke digressed from his musings on the game to enter the fray. âA message for a great GAA man, SeĂĄn Quinn: donât let the bastards grind you down.â
Thus began a week which we must fervently hope went unnoticed by the world outside our little island. For what transpired across swathes of society sent out a message: we believe in crony capitalism. We bow before feudal lords. We have learnt nothing.
What unfolded throughout the week was a campaign to pressurise the financial regulator to reverse or modify his decision on Quinn Insurance. In effect, it was an attempt to place the special interests of Quinn and his family over the public interest. For those who are just back from Mars, this is the business model that has the country in the state itâs in.
On Tuesday, workers from the Quinn Group marched in protest in Dublin and Cavan. There is serious fear among workers about their future. However, they are not independently represented in the group, which doesnât recognise trade unions. The interests of the workers are thus coupled with the interests of Quinn and his family.
One of the spokespeople for the workers at the protest was Mona Birmingham, who is also a PR officer for the company. Nobody in the protest expressed anger that SeĂĄn Quinn had recklessly gambled âŹ3 billion on shares, a gamble that is at the root of the companyâs problems. All of the anger was directed at the regulator, who was acting on behalf of the one million policy-holders, the wider public interest and the stateâs reputation as a liberal democracy. One poster held aloft read: âFinancial Wreckulatorâ.
The most pressing issue among the protesters was the ban on the company signing up new business in Britain and Northern Ireland. After a meeting with the administrators, the latter said they would compile a report for Elderfield on whether it was possible to reopen business in the North.
A letter from the employees was handed in to the Department of Finance. It is understood to have emphasised that Quinn Insurance never had any problem paying debts.
There were no crowd-control issues at the march. An immediate question arises about parity of treatment. What would the reaction be if Anglo Irish Bank workers marched in protest at the hounding of poor SeĂĄnie FitzPatrick. Their jobs have also been placed in peril, and few among them benefited from the reckless management of the institution. Would such a march be met with rotten fruit or stones?
Later on Tuesday, local politicians visited the regulator. Among the group were Rory OâHanlon, Seymour Crawford, Willie Penrose and CaoimhghĂn Ă CaolĂĄin. They claimed to be representing the interests of the workers, whose interests are tied to those of the Quinn family. Before the meeting, some of the delegates sought legal advice as to whether meeting the regulator might be deemed as political interference. Politicians interfering in the independent workings of a business watchdog is the stuff of banana republics.
Incapable of distinguishing between right and wrong by themselves, these politicians sought reassurance in the law. Their legal advice gave them the nod. At the meeting, Elderfield was joined by the governor of the Central Bank, Patrick Honohan.
The following morning, Ă CaolĂĄin told RTE that neither he nor the other politicians knew the detail of the financial situation in the Quinn Group.
âWhat we endeavoured to establish is that the financial regulator has all the relevant information to make the judgement calls that he has to,â Ă CaolĂĄin said. Sometimes itâs difficult to discern what exactly Ă CaolĂĄin is saying.
On Wednesday, there was another protest in Cavan, this one organised by the local chamber of commerce. Before the protest, chamber president Eamon McDwyer was asked on radio whether he was angry at the management in Quinn Insurance.
âI think anger is the wrong word⌠All you have to do is drive out the road here and see the level of support. All businesses have signed up to support the Quinn group and the Quinn staff.â Again, there was no differentiation between the interests of the Quinn family, the management and the staff. All fates were tied to the persona of SeĂĄn Quinn.
At the rally, an earlier radio interview of Quinn was broadcast over loudspeakers. When he uttered the phrase, âMy word is my bondâ, there was a cheer from the crowd. Nobody expressed the obvious conclusion that Quinn had little thought for local business when he was chasing his losses, gambling on the share price of Anglo Irish Bank.
Quinn also conceded in the interview that the regulator was âtechnically rightâ to appoint provisional administrators. A week previously he described the appointments as âone of the biggest errors ever in the history of corporate Irelandâ.
Later at the rally, the director of the chamber, Donal Keoghan, delivered a message for Brian Cowen and John Gormley.
âStand up and be counted and stop using SeĂĄn Quinn and his employees for the mistakes made,â he said. He didnât identify these mistakes. âWe will not stand idly by and let this happen as a community,â he roared.
It is understood his anger was directed at the same assorted bastards to whom the football pundit OâRourke had referred. These bastards are out to âgetâ Quinn.
The fears expressed for the 3,000 jobs in the area are genuine and require immediate attention. However, blaming the financial regulator is curious, to say the least.
The rally, and the obvious support in the Cavan area for SeĂĄn Quinn, are in sharp contrast to the treatment of the other SeĂĄn who was instrumental in the downfall of Anglo Irish Bank.
SeĂĄns Quinn and FitzPatrick both created thousands of jobs using acumen and hard work. Both lost the run of themselves through greed. Both gambled recklessly â FitzPatrick with the bankâs money, and Quinn with âŹ3 billion of his own.
FitzPatrick is now a pariah; Quinn remains, in the north-east at least, a prince among men. FitzPatrick was a great man for rugby, sponsoring, among others, the national womenâs team and the Greystones club. What would be the reaction if the IRFU, or even Greystones, issued a statement condemning the public hounding of poor SeĂĄnie? Rage might well manifest itself in the burning down of a clubhouse or two. Yet up north, the GAA in Fermanagh â and Cavan â take it upon themselves to leap to the defence of the local reckless gambler, portraying him as a victim.
On Thursday, word began to seep out that a deal was being put together for Anglo Irish Bank to take control of the Quinn group. The deal is designed to ensure that the âŹ2.8 billion owed to the bank â and, by extension, the citizens â is somehow secured. It would involve the bank throwing another âŹ700 million into the group.
The first item on RTEâs Prime Time that evening was the Quinn story. The company didnât put anybody forward for interview. At the end of the programme, presenter Richard Crowley announced that SeĂĄn Quinn was on the phone. Quinn came on and said his company didnât need âŹ700 million as was suggested in the earlier segment.
When he finished, Crowley attempted to ask a few questions of his own. Quinn said âhello?â, and then there was a sound like a telephone being recradled. âWe appear to have lost SeĂĄn Quinn,â Crowley said.
Maybe so, but the sound effects suggested not so much that Quinn was lost as that he had scarpered before Crowley could ask a few pointed questions. Before his current woes, Quinn never gave interviews to the media. Now he is ringing up Prime Time to put the public right about where he stands.
By Friday, the Irish Times was reporting that the director of corporate enforcement and the gardaĂ might be called in by the regulator, depending on what was uncovered in Quinn Insurance. A planned rally by Quinn workers outside the regulatorâs office was cancelled.
The weekâs events suggest that, in some areas of society, little has been learnt from the catastrophic collapse of the economy. Special interests will always get a hearing. The interests of 3,000 workers, in genuine fear for their livelihoods, can easily be manipulated. Politicians have no compunction in ignoring any basic form of public morality to shore up their votes. The concern they claimed to harbour for workers should have been expressed directly to SeĂĄn Quinn, who bears responsibility for the peril the jobs are now in.
Quinnâs fate as controller of the group he built up will be clearer after tomorrowâs High Court hearing. The immediate future of another man associated with the story is of far more importance to the future of the country. If Matthew Elderfield was to quit in the face of the pressure he was put under last week, the game would be well and truly up. A stark message would go out to the rest of the world: avoid the banana republic, where funny rules apply.
Four possible outcomes to the provisional administration of Quinn insurance
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The High Court decides to grant full administration. The administrators would then attempt to put the company on a more secure footing before selling it. This is the most likely option at the moment. It would mean the loss of some jobs, but most would be retained under a new owner. The wider Quinn Group, however, could come under threat without the cash cow of the insurance arm.
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The regulator accepts a deal whereby Anglo Irish Bank takes over the running of the Quinn group and a majority shareholding. This could cost the citizensâ bank up to âŹ700 million, and would be undertaken with a view to the bank recovering the âŹ2.8 billion it is owed by Quinn. This would secure most of the jobs in Quinn Insurance and in the Quinn Group.
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The High Court or the regulator decide that an injection of capital of âŹ100 million to âŹ150 million to cover solvency is all that is required. The company management goes back to work and Quinn pays off his debt to Anglo Irish from profits the group is projected to make. This is the least likely option at the moment.
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The High Court is asked to continue the provisional administration for a longer period.
