Raymond Williams, 68, the founder and, until December 2000, the CEO, of failed Australian insurer HIH, was sentenced to 4½ years in prison for his role in the Australia’s biggest corporate failure. He is eligible for parole in two years and nine months.
The sentence is identical with the one given to former Director Rodney Adler on Wednesday (See IJ Website, April 14). Although Williams had stepped down from active management of HIH before it collapsed in March of 2001, he nonetheless pled guilty to a number of charges relating to the company’s accounts that concealed the true nature of its financial situation until shortly before it collapsed in March 2001.
When HIH petitioned the Supreme Court of New South Wales to appoint a provisional liquidator it left behind estimated debts of A$5.3 billion (U.S. $4.1 billion) and thousands of unpaid claims. The collapse also spawned a number of lawsuits against its Officers and Directors for their mismanagement, and eventually focused attention on some of the deals they had made to stave off insolvency. One of them with Berkshire Hathaway’s General Re is currently under investigation (see following article).
Williams’ attorneys characterized the sentence as extremely disappointing and overly harsh and said they planned to appeal. However, a report from the BBC, indicated that Australian regulatory authorities – who had been heavily criticized for not acting sooner on HIH – seemed quite satisfied with the sentences of Adler and Williams. They believe it sends a strong message that “corporate crime would be investigated, and that heavy penalties would continue to be imposed,” said the BBC’s correspondent. Justice James Wood of the New South Wales Supreme Court apparently agreed. In sentencing Williams he stressed that his offenses were “part of a wider history and pattern of mismanagement” that led to the failure of HIH, Reuters reported.
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