Friday 3 November 2006 – LAWFUEL – Law News, Law Jobs – Former Assistant Company Secretary of HIH Insurance Limited, Mr Robert Kelly, has been sentenced today in the New South Wales Supreme Court to 500 hours community service in relation to a criminal charge arising from his role in the HIH group of companies. Mr Kelly was previously found guilty of an offence under the Crimes Act NSW that on or about 26 May 2000, he did with the intention of obtaining a financial advantage for FAI Insurances Limited, concur in the making of a materially false or misleading statement to officers of Westpac Banking Corporation, that management of HIH was not able to produce consolidated accounts of the FAI Group for the financial period ended 30 June 1999 when in fact such accounts could have been produced. Such accounts were required to comply with a covenant under a $150 million Medium Term Note Programme between FAI Insurances Ltd and certain Noteholders being overseas financial institutions.
Westpac was the manager of the Note Programme. The MTN Programme also contained a covenant requiring the FAI Group Shareholders Funds to be not less than A$200 million and as at 30 June 1999 such funds were only $80.9 million. The making of the above statement to Westpac assisted FAI avoid the risk of the Noteholders calling in amounts owing under FAI Notes.
In sentencing Mr Kelly, the Court acknowledged his assistance to ASIC and the DPP. The Court also concluded that although the offence of concurring with the making of a false and misleading statement by a more senior HIH officer was serious, it was ‘qualitatively different and of a significantly lower order than other offences in relation to which sentences of imprisonment have been imposed in HIH prosecutions.’ Deputy Director of Enforcement, Mr Allen Turton, said ASIC acknowledged Mr Kelly’s early guilty plea and the co-operation and information he provided. ‘This outcome demonstrates the merit of an early guilty plea and the provision of co-operation with authorities.’
‘This is the sixth guilty plea obtained in ASIC’s HIH investigation. ASIC will act to ensure that company directors or officers who act dishonestly are brought before the Courts’, Mr Turton said. For further information contact: Allen Turton Deputy Executive Director, Enforcement Telephone: 02 9911 2338 Mobile: 0411 549 236 Emma Forehan ASIC Media Unit Mobile:0409 702 310