To Australians, the bankruptcy of insurance giant HIH was of similar magnitude to the collapse of Enron in America - and the late Randolph Wein took over as group chief executive just in time to see the crash. He was only two months into his new job when he realised there were major problems with the company. The German, a lawyer by training and an insurer with 18 years experience, joined HIH in 1995, became Hong Kong-based Asia boss in 1998 and group chief executive in Australia in December 2000, just three months before the company went to the wall in March last year. 'When I took over I decided to conduct a full review,' he recalled. 'The outcome was unfortunately not that good. Great damage had already been done.' Wein called in accountants KPMG and the subsequent collapse ranked as one of the largest in Australian corporate history. It is not surprising then that questions are being asked about circumstances surrounding Wein's death, an important witness in the royal commission of inquiry into the HIH bankruptcy. Wein, who earned a salary of US$410,000 (HK$3.2 million) in 1999/2000 before moving up to the post of group chief executive, finished giving evidence in September. He gave details of about A$10 million (HK$43 million) paid to HIH employees and consultants in the final days. He authorised about A$8 million of the last-minute transactions. 'They were all done in good faith and, in my judgment, in the best interests of the company,' he said. The bonuses were paid even though the company had stopped paying out insurance claims, a fact Wein defended by saying employees would have been preferential creditors anyway. Although Wein had finished giving evidence, the consequences of HIH folding will stretch into the future. There may be criminal and civil actions arising from the royal commission's report when it is published next year. There will probably be re-insurance and insider trading issues to be dealt with, an industry expert said.
