The fallout from the HIH collapse threatens to travel all the way to the Lodge with a legal case pulling the PM into its complex web.
Howard Pulled into HIH Mire
APRA's decision to approve HIH's takeover of FAI four years ago could personally embarrass the Prime Minister as well as cost the Federal Government a hefty damages bill. The HIH liquidator, Tony McGrath, of the accounting firm KPMG, has filed a claim against the Government and the Australian Prudential Regulation Authority alleging negligence and seeking damages. The government claim focuses on the knowledge of APRA and its predecessor, the Insurance and Superannuation Commission, about the poor health of FAI, which they supervised from the introduction of insurance licences in 1974. John Howard is vulnerable, because the HIH royal commission has heard that he overruled the Insurance and Superannuation Commission to approve licences for FAI after he became treasurer in 1978. Howard's role was also raised at the commission in June when Mr Adler's successor as chief executive, his son Rodney, recalled "the ISC were most unpleasant to my father". When counsel for APRA, James Stevenson, suggested three of four licences were granted only because of "the intervention of the then treasurer", Mr Adler replied: "Commonsense had to come from the top." (Source: SMH)
Original found at http://bosswatch.labor.net.au/news/general/1037749200_21291.php 8 Mar 2010