Emma Vere-Jones
Deutsche Bank takes home A$6m; HIH chief executive questioned by commission
Australian law firm Blake Dawson Waldron squeezed the now defunct HIH Insurance for A$1m (£354,000) in fees in the final 24 hours before the insurer collapsed in March last year, a witness has revealed to the Royal Commission investigation.
The witness revealed that the A$1m is part of A$10m (£3.54m) that HIH paid out in bonuses and corporate consultancy fees on the last day before its eventual collapse. Other payments included A$6m (£2.13m) to Deutsche Bank and $2m (£709,000) in consultancy fees to Australian entrepreneur Brad Cooper.
Blake Dawson was one of the company's main legal advisers. A spokesperson for the firm said: "The payment was for a range of work the firm had done for HIH over the past few months." Deutsche Bank declined to comment on the matter.
Last week, Wayne Martin QC, counsel assisting the commission, questioned Randolph Wein, HIH's chief executive for the four months prior to the collapse, on his intentions regarding the payout.
"The true position," said Martin, "is that you were well aware that there was a very real possibility that the company would go into liquidation on 15 March. And that during the days preceding 15 March you ensured that senior staff and others with whom the company dealt, including the lawyers and the consultants, were able to get their money out before that happened. What do you say to that?"
Wein totally denied the suggestion. He defended the payouts, saying they were necessary to try to rescue HIH. "They were all done in good faith and for my judgement, in the best interest of the company and the policyholders," he told the Royal Commission.
The collapse has generated a wealth of work for the leading Australian firm. Blake Dawson is still continuing to generate fees from its former client by acting for liquidator KPMG. Others involved include Baker & Mckenzie acting for HIH auditor Arthur Andersen, Corrs Chambers Westgarth, representing the Australian Prudential Reg-ulatory Authority (APRA). Seventeen silks are also involved in the inquiry.
