Sean Quinn will lose stake

The Irish Financial Regulator Matthew Elderfield's demand “show me the money” forced Quinn to accept administration and will lead to Sean Quinn becoming, at best, a minority shareholder, the Irish Independent reports.

“It needed hundreds of millions to regain control of Quinn Insurance, money it neither had nor could borrow,” the paper said. “Once this became clear, public support in the Border region for founder Sean Quinn quickly fell away.”

This came after Sean Quinn took the unprecedented step of calling RTE's 'Prime Time' programme to say: "The Quinn Group has plenty of money. We don't need money. We are cash-rich, We have money in the bank."

The Independent said of the Anglo Irish Bank proposed rescue: “Did it occur to anyone that the notion of a broke bank propping up a possibly broke insurance company was utterly absurd, surreal even?”

Lose control

It said Sean Quinn is almost certain to lose control of the Quinn Group. “In the short-term the best that Sean Quinn can hope for is to stay on as a minority shareholder, possibly quite a small minority shareholder, of the group he founded, and run it as a hired-hand on behalf of the new majority shareholders,” it said.

Transport Minister Noel Dempsey said: "The regulator must do the job he has to do. The concern is that jobs in Quinn are protected in so far as they can be.

"The Government is fully committed to protecting jobs, that's number one and number two is our concern that policyholders are also protected.”

Labour's finance spokeswoman Joan Burton last night welcomed the decision by Quinn Insurance to withdraw its opposition to the appointment of administrators to the company.

Finance Minister Brian Lenihan said: "It was essential he (the regulator) take that action because you can't have an insurance company that has a hole in its capital provision."

Jobs lost in a takeover

It was "very unlikely" that many of Quinn Insurance's 2,800 jobs would be saved if the company was bought out by another insurer already operating in the Irish market.

"If the work is already being done for you in a contact centre here or in India, you would be able to scale that up without having to hire more people yourself," one source said.

Elderfield said Quinn remains able to pay out on claims.

President of the Irish Brokers Association Paul Carty said: "It is difficult to predict what recommendations the administrators will make and what changes they will implement but one could confidently speculate that the pricing structure of the group and their existing appetite for risk will be subject to review."