Quinn Insurance in Administration

[boojangles]

Going back to a tread I started on the Easter Rising commemorations and the lack of civic duty or pride. This article by Fintan O'Toole (yeah, I know but lets not shoot the messenger) sums up exactly what I was referring to while also tying it into the Sean Quinn case.

http://www.irishtimes.com/newspaper/opinion/2012/0807/1224321629744.html?via=mr

The Quinn affair shows significant numbers of Irish people are in literal contempt of the courts, writes FINTAN O'TOOLE

SOMETIMES, YOU forget how tenuous and fragile a thing is the Irish State, how little it means to so many of its citizens. By the State, I don't mean the nation, the flag, pride in being Irish – all that visceral emotion. I mean, rather, two rational things, one tangible, the other abstract.

The State is a set of institutions – the Government, the Oireachtas, the Civil Service, public services, the law, the courts. It is also a broad but crucial sense of mutual dependence – the idea that there's a collective self that goes beyond the narrow realms of family and locality.

To function at all, we have to make the working assumption that those institutions and that idea are part of what we are, that, however vehemently we disagree with each other about however many things, there is this common ground on which we stand. Even when we rail against the institutions (for loyalty is not the same thing as passive obedience), we do so because we identify with them – they are ours to criticise. And even when we are angry at our fellow citizens, we recognise that what affects them affects us too, that there such a thing as a common good.

Everyone knows, of course, that there are subgroups – criminals, subversives – who have no loyalty to the State at all, who have contempt for its institutions and who don't recognise the notion of the common good. But the working assumption is that these groups are small, marginal and outside the mainstream of society. They are, indeed, defined by the very fact that they transgress against what we take to be a norm that enjoys overwhelming acceptance. They don't threaten the basic assumptions about the State – they actually reinforce them.

And then, every so often, there's a moment when those assumptions crumble. The idea that the vast majority of people are loyal to the State is suddenly exposed for what it is: a useful fiction. What happens is that very large numbers of people who would never think of themselves as criminals or subversives reveal the truth that they don't really have much time for key State institutions such as the law and the courts and that they simply don't believe that there is an over-arching common good that means anything when you set it against more potent local loyalties.

This is what we've seen over the last fortnight in the Quinn affair. Very significant numbers of decent, respectable Irish people – not a majority but not a tiny minority either – are in literal contempt of the courts. They really don't give a damn what the courts find – if those findings come into conflict with their own deeper loyalties. They know that two separate High Court judges – Judge Dunne and Judge Kelly, both used to dealing with very bad stuff – have used language of rare vehemence about the actions of the Quinns in stripping €455 million worth of assets from public ownership: "dishonesty and sharp practice", "blatant, dishonest and deceitful", "as far removed from the concept of honour and respectability as it is possible to be". Some idiots among them truly believe that the judges are part of a giant conspiracy against the Quinns. Most know damn well that this is nonsense, but they simply don't care.

Nor do these decent, respectable people believe that there is a common good that operates at the level of the State and that could possibly outweigh an almost feudal loyalty to a local hero. The State, for them, is a vague, hazy and distant thing – too nebulous to command any real fidelity. The idea that encouraging the Quinns to siphon off €455 million of public assets might harm their fellow citizens has no meaning for them because, deep down, they don't actually believe that there are such creatures as fellow citizens. There are good GAA people, good Cavan people, good Fermanagh people – those are the "imagined communities" that command respect and allegiance. A larger citizenship signifies nothing. The people who might be harmed by the Quinns' actions are not Us but Them.

There are reasons for all of this. Many of the most vocal Quinn supporters do not, of course, have the option of belonging to the State – they live and pay their taxes across the Border and they grew up with contempt for the "Free State" as a given. The entire political culture of clientilism encourages people to think about the good of the locality, not of the State as a collective entity. Large parts of the Irish elite have demonstrated, with impunity, their own contempt for the law and the common good by evading and avoiding taxes. And of course the State itself is now a sad and tattered thing, stripped of the sovereignty that gives it life.

Even so, it is shocking to be brought face-to-face with the reality that ours is a State to which many of its decent, respectable inhabitants feel no attachment whatsoever. Here is a reminder, if another were needed, of the stark choice that faces us: watch the State dwindle away or get serious about building a real republic.

http://gaaboard.com/board/index.php?topic=21465.0

Condescending. O Toole knows only too well (he wrote a book on the matter) about the complete lack of accountability and honesty shown by law makers in Ireland. Until we have that how can he or anybody expect civic responsibility or pride from people. Over half a million people chose not to pay the Household charge. Are they wrong or is our government wrong?
Sean Quinn was wrong, mis-guided, greedy and dishonest in a lot of ways of that there is no doubt but why doesn't O Toole (as sub editor of one of the last semi-respectable broadsheets in Ireland) accept his responsibility and get stuck into the real problems in this country which have us in the mess we're in and not be deflected by this agenda driven sideshow.

[Tony Baloney]

Quinn backers living in a fools paradise


There was a time when I would have been in agreement with many of the sentiments expressed in Ballyconnell last Sunday evening at the now infamous rally in support of local businessman Seán Quinn. Indeed, in this column back in July 2008 I wrote supportingly about Quinn, at a time when speculation was becoming rampant about his exposure to a fall in the value of shares in Anglo Irish Bank.

Like the majority of people I was not aware of the true situation and that Quinn's purchase of contracts for difference — a toxic form of high-risk gambling on shares — was far bigger than believed. So I had no hesitation in praising Quinn's can-do philosophy and entrepreneurial talents.

Indeed, I even suggested others would do well to emulate him. Quinn had created something out of nothing in a part of the country that had seen little investment and where emigration was the alternative to poverty. The bulk of the 6,100 people employed by the group in Ireland were based in border counties or nearby, working in cement, glass and radiator manufacturing, pubs, hotels and golf courses, or supplying insurance. Other businesses thrived by trading with Quinn. It seemed that no state agency or planned economic model could have achieved what he had.

I believed, wrongly, that Quinn had the resources to absorb whatever losses he was enduring on the ownership of those now infamous shares. I had assumed also that if Quinn was borrowing to buy shares, or to cover losses as the shares declined in value, that cash was available and, if not, that he could sell investments to raise it.

That was then. Since 2008 we have learnt the truth and it is not pretty. Assets belonging to the Quinn Group were transferred to Quinn family members at surprisingly low prices; Quinn Insurance funds were misused to cover his stock market gambles.

Far from being a modest, cautious, prudent businessman, whose only vice was to play cards with friends on a Tuesday evening for a fiver, Quinn was an outrageous gambler at the casino end of the stock market. As he discovered he didn't have enough money to cover his bets, he recklessly used other people's money to do so, including that of the insurance company.

While none of this changed what Quinn had created or achieved, it did outweigh it. And that was even before the outrageous, scandalous behaviour of the past year or so after the appointment of receivers to his empire by the state-owned Irish Bank Resolution Corporation, which houses the carcass of Anglo Irish Bank. The legal language says that the Quinn family has put assets "beyond the reach" of the Irish people who properly own them. Most of us have another word for that behaviour.

Some people, however, don't want to know any of this. While loyalty to Quinn in the border region was honourable in the early days of his crisis, it should have evaporated as the facts became known. If it followed the script, his subjects should have realised that their emperor had no clothes. Indeed, they should recognise that not only has his behaviour cost the state billions of euros, it has also endangered their very own livelihoods, many of which have been saved by the very state that they are now attacking. Their misplaced loyalty makes Quinn's supporters look like fools.

Since the jailing of his son, Seán Quinn Jr, for contempt and the cowardly flight of his nephew Peter Darragh, Quinn Sr has been engaged in a concerted campaign of obfuscation designed to mislead the public as to how he and his family have been treated by the Irish state. Perfectly appropriate decisions by the High Court have been characterised as part of a nefarious plot to make the Quinns scapegoats, to portray them as innocent victims while the guilty go free.

One of the main arguments employed is that €2.3 billion of loans made to Quinn by Anglo were illegal and therefore don't need to be repaid. The Quinns concede that this is the subject of a future court case but somehow try to hold out that this justifies their disobeying a court order to hand over the assets that secured a further €500m in loans that not even the Quinns admit are in dispute.

My own view is that there should be a full criminal investigation into the provision of those loans, one that holds both the Anglo management of 2008 and the Quinns accountable for their mutual complicity, and which also includes the Department of Finance and the Central Bank of Ireland in its ambit. Official documents filed at the time the Quinns were being supplied with massive loans said they were for "general corporate purposes" when, instead, it was clear they were to help him meet payments due on his failed share trades. Both sides were complicit in constructing a lie and both knew exactly why they were doing it.

Anglo should never have made this money available. It gave Quinn the loan even though bondholders and Barclays Bank were first in line for repayments of €1.3 billion. Anglo Irish, however, allowed itself to go to the back of the queue for repayment. That the former financial regulator allowed a loan of that size, on those terms, in those circumstances, is a huge scandal.

The situation became worse when Anglo then lent money to 10 favoured clients who bought some of the secret 28% shareholding Quinn had acquired in the bank. This deal has resulted in a loss of €450m as the loans were secured on the Anglo shares that were being acquired. Those shares eventually became literally worthless. Criminal prosecutions have been brought against some of those involved in this element of the whole mess, something the Quinns have seized upon.

It has always appeared to me that if the Quinn children and Patricia, Seán Sr's wife, had grounds for legal action arising from the Anglo loans then they should take a case against the patriarch Seán Sr, who landed them in it by agreeing the loan and pledging "their" assets as security in the event of non-repayment. Those loans were not just to save Anglo, as he has claimed, but to save Quinn.

Quinn also complains bitterly about the removal of Quinn Insurance from his control in 2010, but why didn't it happen earlier? The fine he received in 2008 for his egregious breach of the rules, when he used money from the insurance company to shore up his gambling debts, should have resulted in far greater penalties. The manner in which Quinn ran that business means anybody who buys insurance in this country over the next 20 years will pay an additional 2% levy to fund Quinn's losses. Has Quinn apologised for this? No, instead he maintains the fiction that he could have generated enough money from the business to repay his debts had he been allowed to keep control.

His supporters in Cavan who say all they want is justice are not alone. As he is one of the fools who has wrecked this country, the rest of the country wants justice for Seán Quinn too. Most people can see through the deeply cynical and opportunist populism that the Quinns and their supporters have been engaging in for the past few weeks. Those people who marched in Ballyconnell last week need to acquaint themselves with the facts and leave the fiction to Hollywood.

Matt Cooper (The Sunday Times 5th Aug 2012)

[Gaffer]

Ok.  What is his day to day role as a priest ?

He is the Rector of the Passionist Monastery at the Graan near Enniskillen.  These days I think there are only 2 priests left there, so after doing the breakfast dishes he'd have a bit of spare time right enough!

Must be a handy aul number

[thejuice]

Condescending. O Toole knows only too well (he wrote a book on the matter) about the complete lack of accountability and honesty shown by law makers in Ireland. Until we have that how can he or anybody expect civic responsibility or pride from people. Over half a million people chose not to pay the Household charge. Are they wrong or is our government wrong?
Sean Quinn was wrong, mis-guided, greedy and dishonest in a lot of ways of that there is no doubt but why doesn't O Toole (as sub editor of one of the last semi-respectable broadsheets in Ireland) accept his responsibility and get stuck into the real problems in this country which have us in the mess we're in and not be deflected by this agenda driven sideshow.

But as you said yourself O'Toole wrote a book on it, therefore did get stuck into the real problems.

The government is of the people, that's what he is saying. You talk about the people and the government as if there is some huge divide.

Who elects them? Where do they come from? Why did it take until it started hurting our pockets to kick FF out of government?

The government of this country didn't fall from the sky, they are of this country, of our society and of our people.

[boojangles]

Condescending. O Toole knows only too well (he wrote a book on the matter) about the complete lack of accountability and honesty shown by law makers in Ireland. Until we have that how can he or anybody expect civic responsibility or pride from people. Over half a million people chose not to pay the Household charge. Are they wrong or is our government wrong?
Sean Quinn was wrong, mis-guided, greedy and dishonest in a lot of ways of that there is no doubt but why doesn't O Toole (as sub editor of one of the last semi-respectable broadsheets in Ireland) accept his responsibility and get stuck into the real problems in this country which have us in the mess we're in and not be deflected by this agenda driven sideshow.

But as you said yourself O'Toole wrote a book on it, therefore did get stuck into the real problems.

The government is of the people, that's what he is saying. You talk about the people and the government as if there is some huge divide.

Who elects them? Where do they come from? Why did it take until it started hurting our pockets to kick FF out of government?

The government of this country didn't fall from the sky, they are of this country, of our society and of our people.

Yes he wrote an excellent book on it which although slightly idealistic did give a blueprint to the way our country could be run. BUT he writes for the Times every day, and I know he has to cover various topics I have rarely read or seen him following up on what he wrote about in 'How to Build a New Republic' calling politicians to account for their failings or championing for a complete overhaul of the political system. O Toole is a great man to find faults in so many things in this country but for a man in his position he has the ability but also a responsibility to try and change things for the better.

I wouldn't say there is a huge divide between the people and government but so many people in this country don't educate themselves when it comes to voting. That is why we end up with such an inept government. I fully agree with your point about why it took a major recession for us to wake up to FF's corruption and mismanagement but please god we as a people have become more politically aware as a result.

We could debate all night about this but my main point is not about the government and its constitution or make up but rather that the whole political system needs a major overhaul for this country to ever get back up of its knees. Fine Gael/ Labour hands are tied in a lot of ways but they have forgotten about the raison d'etat and are more interested in keeping our so-called partners in Europe happy. I know I'm bordering on rhetoric here but this country needs a De Gaulle type figure who can see beyond their own personal and parties interests and make decisions for the long term good of the country.

[Declan]

Coopers article is right on the money and now we'll have to pay a 2% levy on our insurance for the foreseeable future to pay for how Quinn ran his insurance business into the ground

[Main Street]

Some snips from that article by Matt Cooper

Quinn backers living in a fools paradise


There was a time when I would have been in agreement with many of the sentiments expressed in Ballyconnell last Sunday evening at the now infamous rally in support of local businessman Seán Quinn. Indeed, in this column back in July 2008 I wrote supportingly about Quinn, at a time when speculation was becoming rampant about his exposure to a fall in the value of shares in Anglo Irish Bank.
-----
Like the majority of people I was not aware of the true situation and that Quinn's purchase of contracts for difference — a toxic form of high-risk gambling on shares — was far bigger than believed. So I had no hesitation in praising Quinn's can-do philosophy and entrepreneurial talents.
-----
Quinn Insurance funds were misused to cover his stock market gambles.

Matt Cooper (The Sunday Times 5th Aug 2012)

I don't get the bit where purchasing shares  with CFDs is in itself a toxic form of high risk gambling.
The buyer agrees a price, makes a downpayment and pays the rest over a period of time, according to contract.
What made this toxic was that it was Anglo, the shares were already overpriced and Anglo was already in a tailspin.
And Quinn chased his losses.

[supersarsfields]

Couple of things with regards that money Declan.

Firstly the UK losses for QIL were massive, no doubt about that. Most costs came from indemnity insurance for Solicitors etc. And Quinn admits that it was a mistake getting in too deeply on that. But QIL had other profitable areas, (ROI and NI) that would have helped to balance part of the losses the company was making (Admittedly not the whole amount in one go). But then IBRC and Liberty (For a nod and a wink) took over the profitable sectors and the profits on these sectors were ringfenced. They allowed the company to be split in two. One taking the losses without affecting the profits being made by the other sector. The loss making side has been passed onto the policy holders via the levy. So now the state is making profit from the profit making side of the business (all be it halfed for the split with Liberty) and taking money in from the Levy. It's a win win scenario for them. A tax that they can blame someone else for imposing. 
In addition to that, there is the fees of the administrators over the two years. That nicely tops up the 1.3B as well.

I'm not going to say QIL was the best business about nor do I believe that it was as cash rich as SQ believes it was. But neither do I believe it was as bad as is being made out. The above are two major issues that I would have with the figures. There are other smaller ones with regards the reserves, but without anything to back it up there's not much point in going into it.

[LeoMc]

Some snips from that article by Matt Cooper

Quinn backers living in a fools paradise


There was a time when I would have been in agreement with many of the sentiments expressed in Ballyconnell last Sunday evening at the now infamous rally in support of local businessman Seán Quinn. Indeed, in this column back in July 2008 I wrote supportingly about Quinn, at a time when speculation was becoming rampant about his exposure to a fall in the value of shares in Anglo Irish Bank.
-----
Like the majority of people I was not aware of the true situation and that Quinn's purchase of contracts for difference — a toxic form of high-risk gambling on shares — was far bigger than believed. So I had no hesitation in praising Quinn's can-do philosophy and entrepreneurial talents.
-----
Quinn Insurance funds were misused to cover his stock market gambles.

Matt Cooper (The Sunday Times 5th Aug 2012)

I don't get the bit where purchasing shares  with CFDs is in itself a toxic form of high risk gambling.
The buyer agrees a price, makes a downpayment and pays the rest over a period of time, according to contract.
What made this toxic was that it was Anglo, the shares were already overpriced and Anglo was already in a tailspin.
And Quinn chased his losses.

They are toxic because they are traded on margin. You only have to have the finance available to cover the expected change in value. This means you only requires a small amount of finance to take a large position, more so where you are using the shares you are buying as leverage. When the a$$ falls out of the shares (due to the Anglo boos being cooked!) you can be liable for many multiples of what you "invested".

CFD's are illegal in the US.

[Main Street]

Yeah, I suppose the mere fact that one could purchase a 25% stake in a major bank using this instrument makes it toxic.

I thought Quinn had to make a 20% downpayment for these shares.

[thejuice]

http://sluggerotoole.com/2012/08/07/the-real-dilemma-of-the-quinn-affair-the-invisibility-of-the-irish-state-to-its-own-people/

The O'Toole article being debated on Slugger:

would pull out these 2 points from it.

Alias

There is a substantive difference between fidelity to the Nation and loyalty to the State. The Irish constitution recognises this difference and makes both conditions a duty of citizens. However, it also makes explicit that the former is the greater duty than the latter and that the latter duty only exists as the means of exercising the former duty.

It also recognises a substantive difference between the Government and the State. Where the government is acting counter to its duty given in Article 6 to promote the common good (as it is doing by promoting the EU interest to the direct detriment of the national interest) then it is violating its duty and acts without the legitimacy conferred on it by Article 6. In that circumstance, it is proper that the government should be opposed by the people.

If the people decided that Anglo bondholders should not be bailed-out by the people in order to promote the common good of foreign risktakers at the direct expense of the common good of the people then Sean Quinn would rightly be a hero for refusing to co-operate with the government's illegitimate policy.

It is the people's right under Article 6 to decide this policy of bailing-out the eurozone as it is "in final appeal, to decide all questions of national policy, according to the requirements of the common good."

The people should vote accordingly on the policy, and if they approve of it, then Sean Quinn and his local supporters will be deprived of any basis to claim that moral right is on their side. After that, it could no longer be claimed that the State is acting without legitimacy and in violation of Article 6. The local supporters would be acting fully in accordance with the national interest and the common good.

It's interesting that this disconnection between nation and state is keener in the border areas, and in NI where the Irish nation lives within a British state. The State must be a nation-state and act to promote the national interest before it command the loyalty of the nation. Unless you're part of the British nation, NI will never command your loyalty as its national interest is not your national interest.

As ever-more of Irish nation's sovereignty is given away to the EU by its quisling government, the disconnection between nation and state becomes ever-greater, with the state no longer serving the national interest but rather serving the EU interest in those areas where the sovereignty is given away.

You can see this drift all across the EU, but it isn't surprising that it should be greater in the EU's only truly republican state where power is vested in the people and loaned to the state to promote the interests of the people rather than vested in the state itself and owned by it.

Incidentally, that duty of fidelity to the nation (in addition to loyalty to the state) is one of the reasons why the Constitution is under attack (called a review): as a reunified Ireland under the British Irish Agreement would not be a nation-state it cannot be held that two nations of Irish and British who are to share the unified state with parity of esteem between them can have fidelity to one nation. This requirement of fidelity (How can the British nation express fidelity to the Irish nation?) must therefore be removed, replaced with merely loyalty to the state. It's all part-and-parcel of the stealth agenda converting the Irish into a non-sovereign nation without their knowledge or consent.

aquifer

Nation States have diminished in relative terms. They do not constrain the movement of capital, so a whole class of sanctions are missing. They do less because financial markets demand it. Nations are made less different by free markets. Economic Nationalism failed competitively. Social Democracy failed politically here, partly due to the residual influence of the churches.

Funding for political activity is missing or for lobbying for private interests.
The demands of the electorate tends to leave states bankrupt and eventually ineffective. The capacity of Ethnic Nations to progress economically through genocides is constrained by the members of the United Nations security council.

We should be less surprised that selfish private and familial interests command some respect, as they still have power over their finances, and can sustain economic activity across state boundaries.

The Catholic Church has to be a successful multinational in a world of struggling states. It makes economic sense for the church to identify with private and family interests and to disrespect modern states, and even to destroy some of the more socialist.

In the tread I started on the EU federalisation I asked if anyone able to make an argument for nationalism in the 21st century. I don't think I got one convincing reply.

If Rob Hopkins' and Richard Heinberg's hypotheses are true then perhaps the return of the nation state may well be a natural occurrence. A return to the nation state or fiefdom.

[boojangles]

Coopers article is right on the money and now we'll have to pay a 2% levy on our insurance for the foreseeable future to pay for how Quinn ran his insurance business into the ground

If it had been ran into the ground so much then why the hell would one of the largest Insurance companies in the world get involved in it?

[armaghniac]

If it had been ran into the ground so much then why the hell would one of the largest Insurance companies in the world get involved in it?

Liberty bought the business, which has excellent staff and an existing customer base. They did not buy the outstanding liabilities from reckless policies in the past, these fall on the rest of us.

[Declan]

If it had been ran into the ground so much then why the hell would one of the largest Insurance companies in the world get involved in it?

Liberty bought the business, which has excellent staff and an existing customer base. They did not buy the outstanding liabilities from reckless policies in the past, these fall on the rest of us.

Exactly -because in the perverse world of global capitalism you socialise the losses and privatise the profits

[supersarsfields]

Agree totally. Liberty were given a ridulous deal by Anglo. They allowed Liberty to take all the good points from the business without having to take any of the liabilities. Crazy crazy deal!!