Hong Kong winds up Target Insurance as regulator alerts police to HK$1.2 billion missing in the insolvent taxi insurer
- Derek Lai Kar-yan, who took over the management of Target, said the insurer ‘is deemed to be insolvent after it found HK$1.2 billion has gone missing
- A winding up petition was presented after more than six months of investigation while its major shareholders refuse to inject more money, the regulator CEO says
Hong Kong’s insurance regulator is seeking to wind up Target Insurance, concluding after six months of investigations that the city’s biggest motor insurer is insolvent, with HK$1.2 billion (US$152.87 million) missing from its accounts.
As much as HK$1.2 billion of foreign currencies held via an investment firm has “gone missing” from Target’s accounts, causing the insurer to be “deemed insolvent,” said Derek Lai Kar-yan, the vice-chairman of Deloitte China who was appointed on January 7 by Hong Kong’s Insurance Authority to manage Target.
The insurer has a HK$530 million shortfall between HK$1.71 billion in liabilities and HK$1.18 billion in assets, Lai said.
A court hearing has been scheduled on September 21 to hear the winding-up petition presented by Lai, according to the Insurance Authority’s chief executive Clement Cheung Wan-ching. The matter has also been reported to Hong Kong’s police, Cheung said.
That marked the first time that the Insurance Authority had flexed its regulatory muscle since its establishment in 2015. The only other time that an insurer folded in Hong Kong was 13 years ago with the collapse of Anglo Starlite Insurance, also a taxi insurer.