Sean Quinn and his company shelled out millions every day to cover the losses on the disastrous bet on Anglo Irish Bank, spending E400m in a single month, a documentary revealed last night.
Quinn Country, broadcast this week over three nights on RTE and produced by Belfast-based Fine Point Films, details the extent to which the Quinn Group was connected to Anglo as the bank began to shed share value during the 2008 financial crash.
The Quinn Group had bet the equivalent of more than 25 per cent of the bank in early 2008 after buying hundreds of millions worth of contract for differences (CFDs), essentially a bet on the share price.
The buyer does not own the share, winning if it rises but must pay for any drop between the opening and closing price, in cash.
In a single month, March 2018, the Quinn Group, on paper owned by Mr Quinn's five children, handed over E400m to cover the bet.
Mr Quinn said: "Other people in the office should have known we should not have been doing this."
Cash from the various arms of the group, including the regulated insurance company Quinn Direct, was first used to cover the losses before Anglo Irish began lending to the Quinn Group when the company began to run out of money.
Footage was shown in the documentary of a gathering of hundreds of employees of Quinn Direct at the group's five star Slieve Russell Hotel in Co Cavan.
During the reception, Mr Quinn made a point of congratulating his close associate, Kevin Lunney, one of three locals with leading roles within the company, along with Liam McCaffrey and Dara O'Reilly.
“Somebody has to have the respect of their colleagues and that is the important thing in life. Kevin Lunney always had the respect of his colleagues.” There were loud cheers and clapping from the audience.
Mr Quinn said he promoted Mr Lunney and Mr McCaffrey to “very senior positions”. Both are currently involved in the management of Derrylin, Co Fermanagh-headquartered Mannok Holdings, the successor to the Quinn Group.
In the documentary, Mr Quinn said: "I had great respect for them but you just can’t go back there. I just don’t think they are worthy of much discussion, you know.”
Only a short time after the gathering, everything began to unravel, largely due to the Quinn Group's relationship with Anglo.
At a meeting with senior Anglo executives in early 2018, Mr Quinn was told they were surprised about the size of the bet on the bank and wanted some agreement on disposing of the CFDs.
But, according to Mr Quinn, this could only be done when the share price rose. And he even bought more. Anglo's share price never rose again ahead of the collapse of the bank and takeover by the state.
In the meantime, to cover the losses and fatally from a business point of view, the Quinn Group used money from its most profitable arm, Quinn Direct. But insurance companies are regulated and this is not allowed.
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“I should not have touched a penny in a regulated entity. I should not have done that,” admitted Mr Quinn.
When the cash from the various arms of the company dried up, Anglo Irish began lending money to cover the losses. By the end, the loans totalled E2.3bn.
Commentators believe Mr Quinn's five children did not know the full extent of what was going on. But as owners they signed the loan papers between the group and Anglo Irish.
Alan Dukes, the former chair of the Irish Bank Resolution Corporation, the state-run successor to Anglo, said: "“I would not rule out the possibility that Daddy did not tell them the full implications of what was going on."
But, he added, they had free will, were over 21 and "did not come down in the last shower of rain".
"If they were signing documents they knew it was something important and they cannot come back and complain afterwards that the bank did not send someone up to explain the fine print to them.”
Mr Dukes was at the showdown meeting in April 2011 in Dublin when Mr Quinn was told his entire company was being taken away from him, a situation he never saw coming. All of the senior management were out as liquidators moved in to take control.
The former Fine Gael leader and government minister remembered: "He said at the end, 'I can't agree to that, I don't agree to that, there is no point in going any further' and he got up and left."
People from the company's local area in Cavan and Fermanagh soon began organising protests in support of Mr Quinn and the other senior managers.
"We will not stand idly by and allow this to happen as a community," one unidentified local is heard to say in the second episode of the documentary.
Following the meeting, Mr Quinn said there was also "a decision made there and then to try and secure the assets" that did not owe any money.
"It was a bad decision but that was what we decided," said Mr Quinn, adding that it was not his idea though he supported the move.
*Quinn Country concludes tonight (Wednesday) on RTE 1 at 9.35pm
