Herbert Insurance liquidators probe indicates ‘breaches of legislation’

BUSINESSDESK: The liquidators for Herbert Insurance Group, the boutique insurer under scrutiny by the Serious Fraud Office, have found the firm may have breached legislation, but it is waiting on the white-collar crime investigator before taking any action.

In his second report, joint liquidator Aaron Walsh of Corporate Finance said a number of potentially voidable transactions and disposition of assets “by way of unusual fund transfers” had been identified.

“In the absence of funding, the liquidators do not foresee any merit in pursuing actions which will not result in a monetary benefit to the company’s creditors,” Walsh said in the report.

“Our investigations also indicated breaches of legislation, but pending a decision on action by the SFO the liquidators have deferred progressing action in relation to these suspected breaches.”

Last year, receivers for Herbert Insurance and its companion entity Herbert Securities sold its customer base of some 4500 people to Aon New Zealand, though there will likely be a shortfall to secured creditor ASB Bank, which is owed $780,000.

The value of the transaction is expected to be settled this month, and no consideration has yet been paid.

The SFO received complaints about a shortfall in Herbert Insurance’s broking client account, sparking the investigation and liquidation of the entities.

The SFO wasn’t immediately available for comment.

The liquidators have also launched their own investigation into the affairs of Herbert Insurance as to whether there have been any breaches of the law or if there are any avenues for recovery available, the report said.

Walsh said the first report from receivers Korda Mentha indicated there won’t be enough recoveries to meet claims of preferential or unsecured creditors.

Liquidators act for unsecured creditors when a business is wound up.

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Again we are dealing with an ambulance at the bottom of the cliff or should I say hearse.. what provision is there in New Zealand to monitor these bodies to ensure that the white collar criminals don't get a look in? the answer is nil we have nothing in place except good luck because good management certainly doesn't exist. and we only have agencies to deal with crimes after they have been committed and deemed large enough to investigate.

There are no codes of conduct for those dealing with other peoples money and there is no no anti corruption education or means to seek accountability or ensure transparency

Privacy rules and Privacy ensures that white collar criminals have protection and you don't.

I am calling for an independent commission against corruption. perhaps those who are sick and tired of White collar criminals benefiting while those who are tying to save are cleaned out.

Please download a copy of my petition collect some signatures send it back and we will together seek accountability in NZ through an independent commission against corruption . www.anticorruption.co.nz

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