HIH ex-chairman facing criminal charges
Posted on Dec. 13, 2005
SYDNEY, AustraliaThe former chairman of HIH Insurance Ltd. is facing criminal charges that he misled shareholders about a joint venture between the collapsed insurer and Allianz Australia Ltd.
The Australian Securities & Investments Commission announced Tuesday that criminal charges had been laid against Mr. Cohen in the Downing Centre Local Court in Sydney, Australia.
The case, which is being prosecuted by the Commonwealth Director of Public Prosecutions, will return to court on March 21, 2006, ASIC said in a statement.
The charges result from an investigation by ASIC into the collapse of HIH, which became Australia’s largest ever corporate failure in 2001.
ASIC alleges that Mr. Cohen gave misleading information to shareholders at HIH’s annual general meeting on Dec. 15, 2000. ASIC alleges that Mr. Cohen made misleading statements about the effect on HIH’s cashflow of a joint venture between HIH and Allianz Australia and a $200 million payment by Allianz to HIH.
Mr. Cohen was chairman of HIH’s board of directors between 1992 and 2001, during which time he also served as head of various committees including the audit, human resources, and investment committees.
In October, the Australian Prudential Regulation Authority announced that Mr. Cohen had been disqualified from acting as a director or senior manager of a general insurer, for his role in HIH’s collapse.
Ray Williams, former chief executive officer of HIH, and Rodney Adler, a former director of the company, have both been jailed for their part in the company’s collapse.