Non Executive
Directors- Do your job: Review the Lagan relationship
The Non Executive directors at
Quinn Manufacturing are paid over €300,000 per annum. That’s ten times the
earnings of a factory worker in Quinn’s. They attend one monthly board meeting,
so in order to justify these earnings they must be very busy overseeing the
running of the business in considerable detail and analysing the performance of
the executive directors.
For example they must have spent
many hours reviewing all aspects of the proposed Lagan deal, a joint
venture (Lagan takeover but without paying), which was announced last year but
fell through.
They would have noted a close
personal relationship between the Quinn Manufacturing CEO, Paul O’Brien and the
owner of Lagan Group, Kevin Lagan. They both served on the board of UTV for an
eighteen month period during 2007 and 2008. Mr O’Brien was Finance Director for
UTV but resigned in July 2008 after a disastrous attempted rights issue.
On taking up his position with
Quinn Manufacturin, Mr O’Brien was immediately in contact with Mr Lagan. This
“relationship” eventually led to a proposed Joint Venture which ultimately fell
through as the Quinn executives involved had massively overstated their profits
by a factor of more than two.
The proposed Joint Venture was
solely with Lagan and no third parties were offered an opportunity to make an
offer for the business, was this down to the close personal relationship?
However before the deal fell
through all Quinn customer details were shared with Lagan and subsequently
Lagan have taken a number of the more profitable customers from Quinn. Indeed
even now when Quinn sales representatives approach Lagan customers they get a
hands off message from on high.
Sean Quinn’s entry into the
Cement market brought much needed competition to that sector, and made for a
vibrant concrete products industry in Ireland. The current relationship with
Lagan seems anything but competitive and it will be the end user who will
suffer from lack of competition, and the Quinn business from loss of customers.
The conduct of Mr O’Brien and his
team in relation to the proposed Joint Venture and their interaction with Lagan
both before and afterwards raises many issues, disclosure of past
relationships, conflicts, competition issues etc………
The Non Executive board have
sanctioned monitoring operations against staff, ex staff and the local
community. It is time they brought the same level of focus to bear on their
executive team who operate as untouchables in relation to the Lagan issue and
many others whereby “friends” receive favourable treatment. These are so well known
that they are now a running joke amongst the Quinn staff.
1 comment:
I am absolutely appalled after reading about Paul O'Brien's relationship with Kevin Lagan. I couldn't understand this Lagan joint venture last year. Lagan staff went into the Quinn Group for weeks on end rifling through their files. Customer details, customer pricing and orders,costing of raw materials, product recipes, the list goes on and on, were all accessed in Quinn Group by Lagan staff. Staff at the time compared these Lagan employees as being like a "swarm of locusts". We have lost a lot of confidential information due to this, along with a lot of customers. The fact the salesmen are being stopped from going after Lagan's big customers is just laughable.
A report comparing both cement companies was generated during this "joint venture" by industry experts and the results of this report showed that Quinn Group had a better and more cost effective way of producing cement. Don't tell me that Lagan aren't using this information to its advantage.
I had thought that this whole Lagan debacle was just another "balls up" by Mr Paul O'Brien and his team. If this man had a personal relationship with the owner of Lagan then it's a whole different story!! Yes, I would ask too, what are the Executive Board going to do about this? Our company is being run into the ground, a company that we have all worked tirelessly for for decades, under the leadership of Sean Quinn. It is terrible to see it on its knees. Someone has to be held to account.
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