From Socialist Voice, May 2010

Seán Quinn, CFDs, and jobs


As this article is being written, the full hearing of the Financial Regulator’s action to put Quinn Insurance into administration has been postponed, to be heard in the High Court in the coming weeks. Presumably when this is being read the High Court will have sat and will have granted the Regulator administration rights for the Quinn Group, which is without question the legal and logical manner in which the state should act.
     We have seen demonstrations of workers concerned about their jobs and, rightly, acting to publicise their plight. However, backing Seán Quinn to pull the group, and in particular the insurance side of things, through these difficulties with a commitment to jobs is naïve at best.
     Quinn says of himself: “I accept that we are technically wrong, but there is nobody . . . saying we haven’t got a very good model and a proven track record making money. So if we have, why put us into administration?”
     And some TDs, such as Ned O’Keeffe, may even call him a patriot. He said of the Quinn Group: “They won’t be depending on the state and Mr Elderfield [the Regulator] to tell us what to do. We don’t want foreigners in here. Michael Collins, Liam Lynch, Pádraig Pearse and James Connolly wouldn’t have those foreigners running our business.”
     Leaving aside the absolute ridiculousness of these two comments, it is important for employees of the Quinn Group to realise and understand that it is the actions of Seán Quinn and co. that have put their jobs at risk and have run the company they work for into the ground, amassing huge personal debts in the process, including a debt of €2.8 billion to Anglo-Irish Bank.      This last debt was accumulated through a “creative” financial product known as “contracts for difference” or CFDs, a contract that specifies that at a specific time the buyer (Quinn) or seller (Anglo-Irish)—depending on whether it is positive or negative—will make up the difference between the price of the asset from when the contract was signed to its contracted date. This allows for speculation and investment without the purchasing of shares, thereby hiding the information from the market.
     Workers supporting the old management would do well to remember that the Quinn Group, being a private company, was previously used to write off the personal debts of Seán Quinn and his family. The accounts for 2007 record a loss of €425 million as company funds were used to cover the growing losses on Seán Quinn’s CFDs with Anglo-Irish Bank.
     Quinn not only amassed these massive debts and proved himself more than capable of “technically” bringing a business into administration but also has a record of grossly flouting regulation in pursuit of private gain, the insurance arm having previously been fined €3.4 million.
     Unfortunately there is no easy slogan or rallying point for employees of the Quinn Group. They have been abused and misled by their employer. Their labour has been used to enrich and bail out their greedy, disgraced boss. But the state hardly appears as a welcome saviour, given its savage attacks on working people and their services.
[GM]

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