C&W issues writ to recover £25m from former employees

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The Independent Online

Cable & Wireless began legal proceedings yesterday against six people, claiming they had created £25m in profits for themselves by directing C&W work to companies from which they benefited.

Cable & Wireless began legal proceedings yesterday against six people, claiming they had created £25m in profits for themselves by directing C&W work to companies from which they benefited.

C&W is taking civil action against the individuals, five of whom have worked for the telecoms group, and against the five companies they were involved with in a bid to recover the cash.

The individuals worked at C&W's insurance arm, Pender, which is based in the Isle of Man. C&W claims they accumulated the cash pile for themselves by directing business from Pender to a series of companies they benefited from financially, after an investigation which it began last year.

While C&W is taking legal action to recover the cash, it did not come out of the company's funds, and therefore there was no possibility of the problem leading to a financial loss for the group, it said.

The company, which has been struggling to put its business on to a sounder footing, said it had improved its internal checks and balances. "The procedures to uncover and correct unauthorised management practices reflect that commitment to financial discipline and integrity at all levels," it said.

Pender was set up as an in-house insurance arm, providing a range of policies including directors' insurance, and to cover issues such as unexpected interruption of business.

It hit the headlines last summer when C&W warned there might be a black hole in its accounts. Pender is closed to new business, but at the time the company warned it might be subject to claims from other telecoms companies which also took out cover through it.

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