Dozens may be charged over HIH
The counsel assisting the HIH royal commission has said that dozens of former HIH and FAI directors and executives could be charged over the insurance company's massive collapse. Over 100 civil and criminal charges may be laid, including against former HIH CEO and former FAI chief Rodney Adler.
The commission's findings include recommendations that certain individuals and companies be banned from the insurance industry, accusations of professional misconduct against advisers and statements relating to “undesirable corporate governance practices”.
The chief cause of HIH's and FAI's collapse is said to have been the failure to set aside funds for future claims by policyholders. HIH was trading unprofitably for years, counsel Wayne Martin QC said, with “dubious accounting techniques” used to “paper over the cracks”.
Mr Martin was also critical of APRA's, Arthur Andersen's and Goldman Sachs Australia's roles in the collapse. Bans have been recommended for Hannover Re and General Cologne Re Australia. Justice Neville Owen will present his final report on February 28.