Former FAI execs charged over reserves changes
by Barbara Cockburn
Posted on Nov. 22, 2005
SYDNEY, AustraliaThree former executives of FAI General Insurance Co. Ltd. face criminal charges related to alleged fraudulent alterations of the claims reserves of the former insurer.
In charges filed by the Australian Securities and Investments Commission, two of the executives, Daniel Wilkie and Ashraf Kamha, are alleged to have known about the altering of claims reserves and charged with deceiving the Australian Stock Exchange and inflating financial results in 1997.
Sydney, Australia-based FAI was acquired by HIH Insurance Ltd. in 1999. HIH’s subsequent collapse was in part blamed on financial problems at FAI.
A third executive, Antony Boulden, has been charged with being “privy to the fraudulent altering of a book” affecting the claims reserves of FAI.
The case against Mr. Wilkie was adjourned until Jan. 31, 2006, and the cases against Messrs. Kamha and Boulden were adjourned until Feb. 28, 2006.
Mr. Wilkie, FAI’s former chief operating officer, last week was acquitted of charges that he and two other former FAI executives tried to cover up a potential reserving shortfall by arranging a reinsurance deal with General Cologne Reinsurance Australia that prosecutors alleged was bogus.