Quinn companies will not be returning to family says chief executive
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Paul O'Brien, chief executive officer, Quinn Group.
THE chief executive of the Quinn Group says Sean Quinn and his family will not be getting their companies back, even if they win their case against the former Anglo Irish Bank later this year.
Mr Quinn and his family dispute debts of €2.3 billion that the bank, now known as the Irish Bank Resolution Corporation (IBRC), says they own, claiming the money was loaned "illegally" to prop up Anglo's share price.
The Quinns have remained consistent in that regard, pledging to not only be vindicated when their case is heard in court in the Spring, but to be back in business.
However, while the family's supporters would like to see Sean Quinn back at the helm of the huge empire he created all those years ago, his successor says it won't be happening, whatever the outcome.
"The reality is, the manufacturing business, [the] restructuring is fine. There is no going back. Even if they won the case they don't get their companies back. It is only a claim for damages. That is a big misunderstanding," said Paul O'Brien, in a frank interview with The Impartial Reporter.
"That is a matter for the courts and I am not going to comment on that. The people who own our businesses are the institutional investors, banks, bonds, not IBRC. Whatever goes on with the family and IBRC is not for my comment."
Mr O'Brien, from County Louth, has been the chief executive of the Quinn Group since April 2011, prior to this he worked within the group for Mr Quinn in a non-executive capacity. He has received much criticism since he took the job, primarily from the Quinn family, who have told this newspaper of their intention to sue him and his board if they win their legal case for what they have described as the "mismanagement of their companies." But Mr O'Brien remains defiant.
"Everyone is entitled to an opinion. I know what I have done and I am happy with what I have done. I know what my board have done and they are happy with what they have done," he said, in response.
At a pro-Quinn rally at the end of last year, Mr Quinn's daughter, Ciara, claimed that some Quinn employees were being asked to "go quietly" from the company. When asked about this, Mr O'Brien hit out at "rumours and claims flying around that are factually inaccurate" but admitted that some employees who were not on his company's side were asked to leave.
"There were people who left the business, on a senior management level, for a number of reasons. Either by their own choice, through retirement or ill health, or who requested to leave. That was done in a compromise agreement, or as some people have refered to them as 'gagging orders'. That is standard practice. People who were asked to leave were people who we believed were not on side with the new management. It is simple as that, there is no big deal."
On the subject of Quinn's supporters, Mr O'Brien complained of being "caught in the cross-fire."
"A lot of people would assume we are the proxy for IBRC, which we are not. IBRC have a very small share-holding in our business. It is less than 25 per cent. (24.9 per cent)," he said, adding: "There is another rumour that our bondholders didn't take a hit, of course they took a hit."
The appointment of a receiver to the Quinn Group in 2011 was a move that has been rejected by the Quinn family ever since.
"They [the bank] are unlikely to achieve any value out of it," said Mr O'Brien, who explained that appointing a receiver to the company was a "technical thing" and "the right thing to do."
"It is to do with taking control of the shares of the holding company. What happened was, that business was split between the insurance, the property assets and the manufacturing. It was to take control of it. It will be proved in the long-term that it was the right decision, because the reality is and this is another nonsense, the business was insolvent because the banks who were owed the 1.3 billion, their covenants were breached, and when you breach a covenant with the bank, the bank has a right, the money becomes an on demand, so it's not credible to have an on-demand facility because it means the banks can pull it at any point. It was absolutely the right thing to do."
"People are torn and I can understand that loyalty," stated Mr O'Brien, "If you look at what Sean Quinn has done for the area. This was all built by that man's vision. There is a lot to be admired about that, but the cause of the change of ownership is a different matter. People want their jobs, they want their wages on a Friday night. People are torn but at the same time, and time will illustrate, the intention of the new management and the board were good."
Mr O'Brien rejected claims that local employee numbers are down since he took over the company, as claimed by the Quinns and the lobby group, Concerned Irish Citizens.
"There is a lot of rubbish being talked. There was rubbish being put out that our employment numbers were being kept up by hiring security personnel. In terms of employment there are more people employed in the Group now than there was at the change of ownership. In terms of local employment, we are up nine people compared to what it was at the change of ownership. It is now 1170. Those numbers I have talked about exclude security personnel. In total, we have normally around a dozen security, it might go up or down by two or three."
In December, a meeting, organised by Concerned Irish Citizens, was held in Ballyconnell to discuss "growing concerns" over the future of the Quinn jobs. Martin Maguire of FEDO (Fermanagh Economic Development Organisation) claimed the company could face serious financial problems by May 2013, another claim dismissed by Mr O'Brien.
"He is obviously looking at a cash flow forecast that I don't have because we are not going to run out of money. We had a superb year for cash. No. Rubbish. Again, more rubbish. This is part of the ongoing campaign to create fear in peoples' mind that they are going to run out of cash, they are letting people go. It's all crap. It is all stuff to undermine management.
"Another rumour was the head office is going to Dublin; more nonsense. We shouldn't be sitting in Derrylin for this interview, we should be sitting in Dublin. I have a lot of meetings in Dublin because I have investors coming in from the States and suppliers. They don't have time to travel down to Derrylin to see me," he said.
In November, Police stepped up their presence in the Derrylin area following a spate of attacks against the Quinn Group. An electricity sub-station was damaged in an arson attack -- the latest in a long line of incidents to occur following the takeover. In January 2012, there was a fire at one of the buildings near the company's headquarters while in December 2011, a lorry was used to drive into the front of the Quinn staff canteen. In July 2011, a number of vehicles worth thousands of pounds were burnt out at the company's Tarmac plant. Three electricity poles were cut down on that occasion as well -- the 14th time that power lines had been damaged in attacks. And in August 2011, Mr O'Brien's car was burnt out outside his home.
"I am not going to go through each incident because I'll be here for a week. In the last 12 months, people have put stakes in the road to puncture cars and lorries, we had the fire at the substation which is under investigation at the moment, and recent protests which had a significant impact on our business because of the blockade on the roads, which I don't think was appropriate at all. The misunderstanding is if you block product and the customer doesn't get it, they can take their business elsewhere. If they do that then there is an impact on jobs.
"Again, very simply, people are paid to do a job. I know there are a lot of people in our 2,800 staff who would have a lot of sympathy for Sean Quinn. Have I sympathy? Absolutely. Nobody ever wants to see anyone in that situation. On a business level, there was a decision taken because the debt couldn't be paid. If I don't pay for the mortgage on my house someone else will take it off me. It is that simple."
He has this message for his critics: "I think criticism is healthy if it is meant in the right way. Everybody is entitled to an opinion but if people are putting out misguided facts, actually, worse than that, factually incorrect facts, which is to create unease that's just mischievous and dangerous and not right."
Mr O'Brien admits the next 12 months of business will be tough [Quinn Cement profits, like most of the construction industry are down, though Quinn Glass, he says, is "a success story"]. He wants the business to grow but states that where there are problems in certain areas "we can redeploy people."
He says the announcement that Quinn Building Products and Lagan Cement Group have signed a memorandum of understanding that may lead to a joint venture between both groups is "hugely significant."
"In the context of the market, there is a savage overcapacity, and rather than stand back and hope that it will be alright and sometime in the future the market will al come back, I think we need to get up and do something about it. We think we have an opportunity to put those two businesses together could be very good for the business," he said.
The businesses which will become part of the proposed joint venture are the combined cement and building products businesses based in Ballyconnell, Derrylin, Kinnegad, Belfast, Cork and Benelux.
"It was only because of the situation Quinn business found itself in over the last few years that that investment wasn't made. A lot of things were on hold. We are now in a position to put 15 million behind the business. It will sustain the jobs. It will take a couple of months for us to put the framework around the business plan but we wouldn't have signed the memorandum of understanding if we weren't hopeful of execution."
In a separate development, Quinn Manufacturing has announced a €15 million investment to upgrade its Ballyconnell cement plant. When completed, Quinn Manufacturing in Ballyconnell will facilitate the use of alternative fuels thereby replacing coal as the primary fuel.
This article appeared in Impartial Reporter 03 Jan 13