Director is jailed over scandal of 'Australian Enron'

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The Independent
By Kathy Marks, Asia-Pacific Correspondent
16 April 2005


The man who presided over Australia's largest corporate collapse has been jailed for four and a half years, following one of his former directors to a maximum-security jail in Sydney.

Ray Williams, the 68-year-old founder and former chief executive of the insurance giant HIH, had pleaded guilty to three charges of misleading shareholders and to failing in his duties as a director. HIH collapsed in 2001 with debts of £2.1bn, shocking corporate Australia and prompting comparisons with the subsequent demise of Enron and Worldcom in the United States.

Despite Williams expressing "shame and remorse", the Australian courts were determined to send a message about white-collar crime committed on such a phenomenal scale. Twenty-four hours earlier, a former HIH director, Rodney Adler, had also been jailed for four and a half years. Lawyers for Williams, who was notorious for his lavish lifestyle, said yesterday that they would appeal against the "manifestly excessive" sentence. The scandal affected thousands of policy-holders across the country, who were left without insurance or out of pocket. It plunged the insurance industry into a crisis from which it has yet to recover. In total, nine former executives were charged.

The media was full of stories about families with worthless HIH policies. One family whose home was destroyed by fire was forced to remain there, living in the burnt-out shell.

http://news.independent.co.uk/world/australasia/story.jsp?story=629865