Probe of HIH collapse yields new guilty pleaPosted On: Oct. 8, 2006 12:00 AM CST
SYDNEY, AustraliaThe former company secretary of failed Australian insurer HIH Insurance Ltd. has pleaded guilty to four criminal charges related to the company's collapse.
In the Supreme Court in Sydney, Australia, Frederick Lo on Friday admitted three counts of making false or misleading statements and one of failing to properly exercise his powers as an officer of the defunct insurer between May 1999 and October 2000.
A sentencing hearing was slated for January.
HIH became Australia's largest ever corporate collapse when it went under in 2001.
In addition to the criminal charges filed against Mr. Lo, last year he was disqualified from acting as a director or senior manager of a general insurer by the Australian Prudential Regulation Authority. APRA found that Mr. Lo had not exercised due care and diligence in several instances while he was company secretary of HIH.
Several other former executives of HIH have faced criminal charges, and some have been jailed or banned by the country's insurance regulator for their role in the company's downfall.
Most recently, Dominic Fodera, the former chief financial officer of HIH was ordered to stand trial on six criminal charges related to the unraveling of the insurer.
Following an investigation by the Australian Securities and Investments Commission, Mr. Fodera was ordered in the Downing Centre Local Court in Sydney, Australia, to stand trial on charges that he failed to inform HIH directors and the company's auditors of the true terms and effect of contractual arrangements entered into between HIH and Hannover Re Group in the financial year to June 30, 1999.
In 2003, a report released by the Australian Royal Commission investigating the failure of HIH found that mismanagement led to the insurer's spectacular collapse.