Independent Insurance chiefs in court on fraud charge

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The Independent Online

The Serious Fraud Office has charged three former directors of Independent Insurance, which collapsed four years ago, with conspiracy to defraud.

Michael Bright, the former chairman, Philip Condon, the former deputy managing director, and Dennis Lomas, the former finance director, appeared at City of London magistrates' court yesterday and released on bail.

The trio are accused of conspiring to defraud employees, directors, auditors, shareholders, customers and others during the period leading up to the insurer's collapse in 2001, by lying to them about the true extent of the company's liabilities. The trial is due to take place at Southwark Crown Court in London next year.

Independent went into liquidation in June 2001, shortly after Watson Wyatt, the actuaries, revealed it could not put a figure on the company's employers liability insurance claims. That admission triggered the withdrawal of a fund-raising aimed at propping up the company's balance sheet and it went into administration soon after.

The company had been worth almost £1bn at its height, and Mr Bright, its founder, had a stake worth £58m. He had secured loans on his Independent shares and was declared bankrupt after its collapse.

The administrators of Independent, PricewaterhouseCoopers, announced this year they are to sue KPMG, the insurer's former auditors, for not spotting the large hole in the company's accounts sooner. PwC is suing Watson Wyatt on a similar basis and demanding tens of millions of pounds in damages from both companies.

Yesterday's announcement came more than four and a half years after the SFO began investigating Independent, after a referral by the Financial Services Authority.