SYDNEY: The disgraced former chief executive of failed Australian general insurer HIH Insurance Ltd was sentenced to four and a half years in prison yesterday for his role in the country's biggest corporate collapse.
Raymond Reginald Williams, 68, HIH's founder, stepped down in December 2000, just four months before the country's second biggest general insurer crumbled under estimated losses of up to A$5.3bil.
Williams, whose lavish corporate lifestyle once included a A$1,500 bill for jellybeans, pleaded guilty last year to three criminal charges relating to transactions between 1998 and 2000 that distorted the true financial position of HIH, and involved hundreds of millions of dollars.
Justice James Wood of the New South Wales Supreme Court said Williams's offences were “part of a wider history and pattern of mismanagement” that led to the failure of HIH.
He is eligible for parole in two years and nine months.
The sentencing of Williams comes just a day after former HIH director Rodney Adler, 45, was jailed for the same term after pleading guilty to four criminal charges arising from an 18-month long public inquiry into the HIH collapse.
Charges against Williams included being reckless and failing in his duties as director of HIH, authorising a prospectus containing a material omission, and making or authorising a misleading statement to inflate profit.
A third charge related to a financial reinsurance policy HIH had “wrongly treated as traditional reinsurance” to overstate its fiscal 1999 operating profit by A$92.4mil, said the Australian Securities and Investments Commission.
That reinsurance contract was bought from German reinsurer Hanover Re, the world's fourth largest reinsurer. – Reuters