Business & Finance

ASIC Acts to Freeze Former HIH Directors' Assets

ASIC - May 24th, 2001

Ms Jillian Segal, Deputy Chair of the Australian Securities and Investments Commission (ASIC), today announced that ASIC had obtained court undertakings from former directors of HIH Insurance Limited.

The court undertakings were provided from former Chief Executive Officer Ray Williams, former HIH Director Rodney Adler and former Chief Financial Officer Dominic Fodera.

ASIC sought these protective orders as an interim step in its broad investigation into the collapse of HIH.

Prior to ASIC's court application, Mr Williams voluntarily surrendered his passport to ASIC.

As part of today's court undertakings Mr Williams has agreed, without admission, that he:

• will not deal with any of his interests in personal or household assets (exceeding $50,000), real property, securities or superannuation without first giving ASIC 30 days notice of his intention to do so;
• will not transfer monies or assets outside Australia without first giving ASIC 30 days prior notice;
• does not have any real or personal property that is otherwise not subject to the court undertaking with a value greater than $50,000.

Mr Williams undertook to provide ASIC with details of his assets.

Similarly, Mr Fodera gave undertakings, without admission, that:

• he will not deal with any of his assets, subject to payment of ordinary living expenses and legal costs incurred in the proceedings without first giving ASIC 30 days notice of his intention to do so;
• he will not transfer monies or assets outside Australia without first giving ASIC 30 days prior notice;
• if he desired to travel outside Australia he would provide ASIC with seven days notice, a detailed itinerary and a photocopy of his return airline ticket.

Mr Adler gave undertakings to the court which will expire on 31 May 2001, on which day there will be further argument about any undertakings he should be required to give.

Mr Adler gave, without admission, undertakings that:

• he would not deal in any real estate held by him or on his behalf, or shares, securities or future contracts without 30 days written prior notice to ASIC; and
• he would not transfer of monies, shares, securities or futures contracts outside Australia without first giving ASIC 30 days prior notice.
• This matter is re-listed for further argument in relation to the orders sought against Mr Adler on 31 May 2001.

ASIC also commenced civil proceedings against the three former directors alleging that they had breached their duties as directors in relation to a payment of $10 million by an HIH subsidiary (HIH Casualty and General Insurance Limited) to Pacific Eagle Equities Pty Ltd, a company of which Mr Adler was a director. ASIC also alleges a breach of director's duties in respect of Pacific Eagle Equities.

ASIC is continuing its broad investigation into HIH and will not be commenting further on today's proceedings.