SFO is told of enhanced profits at Lloyd's agency: Investigator's report raises Gooda Walker questions

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The Independent Online
ABOUT 3,000 underwriting members of the Lloyd's of London insurance market and the Serious Fraud Office have been told that past profits of three insurance syndicates under the management of the former Gooda Walker underwriting agency were 'significantly enhanced' by business transactions.

A detailed report prepared by a top insurance investigator, Ken Randall, on behalf of Lloyd's approved caretaker managers for Gooda Walker has concluded that the consequent improvement in the rankings of the syndicates in league tables compiled at Lloyd's 'may have contributed to the growth in capacity of the Gooda Walker syndicates in the 1980s'.

More members rushed to join the syndicates because of the apparent success of their operations. However, the syndicates soon racked up enormous losses, which are expected to reach pounds 925m.

This week, the board of GW Run-Off, the company that took over the management of Gooda Walker's affairs at the request of the Lloyd's authorities, decided to pass over Mr Randall's report to the Serious Fraud Office.

Mr Randall told the Independent earlier this week that GW Run-Off's board had found 'appropriate' issues for a reference of the report's findings to the Serious Fraud Office.

Lloyd's has carried out its own investigations, which resulted in a critical internal report, published last October, describing the circumstances leading to the losses on the Gooda Walker syndicate. However, its findings were not passed on to the Serious Fraud Office.

Lloyd's said that there was 'no necessity' to pass the findings of the report over to the Serious Fraud Office. Neither does it plan to pass on any other of its internal findings about how the bulk of the pounds 5bn worth of losses arose in the last three years.

In Mr Randall's opinion, which has been sent to the 3,000 members, some commissions charged to members out of transactions that enhanced the performance of the syndicates should have been taken out of the arising profits instead.

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