BUSINESSMAN TONY Quinn siphoned off money from an oil company by inflating expenses and putting payments through to companies he personally owned, it has been alleged.
Mr Quinn and another director of International Natural Energy, Susan Morrice, conspired to oust a third director, Sheila McCaffrey, and then ensured they profited at the expense of shareholders, lawyers for Ms McCaffrey have claimed. Mr Quinn and Ms Morrice deny the claims. Mr Quinn, on his second day in the witness box on Friday, countered that Ms McCaffrey was removed because she was impossible to work with and after “irregularities” arose.
Ms McCaffrey and Ms Morrice, both from Northern Ireland, are founders of INE, which controls large reserves of oil in Belize. Most of the funding came from investors in Ireland who attended Mr Quinn’s Educo “mind power” seminars.
Barrister Frank Walwyn, for Ms McCaffrey, told the court that Mr Quinn and Ms Morrice “plotted and conspired” to oust his client and, after they got control of the board, expenses were “ballooned up” and monies “siphoned off”.
INE has paid almost $1.5 million (€1.2 million) for consultancy and administration services since 2007, the court heard.
Mr Walwyn said the amounts increased dramatically after Ms McCaffrey was suspended from the board, rising to a peak of $720,000 in 2010. However, last year, after another director (Paul Marriott) took a court case in which he made similar allegations about inflated expenses the figure dropped off sharply, counsel said.
Mr Quinn said he didn’t “do the financials” and none of the entities to which payments were made had anything to do with him.
Spending on security rose to a peak of $1.2 million in 2009 before falling to zero last year, after Mr Marriott took his case, counsel said. He said Mr Quinn and the other directors’ fears for their personal safety seemed to have dropped off dramatically last year.
Mr Quinn replied that when he was home in the Bahamas he had no problem with personal safety.
He has earned $1.2 million from oil company staff attending his seminars. Asked how much of his companies’ revenue this accounted for, he said he did not know.
Eastern Caribbean Supreme Court judge Justice Edward Bannister, who has described the current litigation as “bitter”, expressed surprise that the witness was unable to provide even a ball-park figure. Mr Quinn undertook to provide it.
Legal fees grew from $8,500 in 2007 to $4 million last year, the court also heard. Mr Quinn was paid $1.6 million under a loan-release scheme in 2009, while Ms Morrice got $1.15 million, the court heard.
While payments were made to other shareholders, Mr Quinn agreed that applications from some investors were refused.
In her claim form, obtained by The Irish Times, Ms McCaffrey alleges she was improperly removed as a director of INE by Mr Quinn and Ms Morrice.
She alleges an unlawful conspiracy between the two to remove dissenting directors, concentrate control in their hands and allow for the use of the company for personal gain.
Ms McCaffrey also accuses Mr Quinn and Ms Morrice of failing to act in an even-handed and fair manner to all members and of conducting the business affairs of INE for their own personal benefit.
“Morrice and Quinn have let their personal interests conflict with their duties and have unlawfully diverted the revenue stream to their own benefit and use, and away from INE and its members,” she states.
Their domination of the company placed them in a position where they could “divert and misappropriate funds into perpetuity” as as long as oil is being pumped, said Ms McCaffrey, who is seeking a court order for the company to buy her shareholding or else to have the company wound up.
