Fraud Office moves in on Lloyd's

A WIDE-RANGING investigation was launched by the Serious Fraud Office yesterday into events which have led to losses exceeding pounds 900m for 3,000 underwriting members of the Lloyd's of London insurance market.

The SFO has studied papers which suggested past profits of a group of insurance syndicates under the former Gooda Walker underwriting agency may have been massaged in a way which misled potential members.

With the syndicates now making huge losses, many members have been brought to the edge of financial ruin. One, Harold Weston, 51 and a solicitor, hanged himself as he could not face the prospect of being declared bankrupt.

Among members forming part of the Gooda Walker syndicates are Paul Marland, Conservative MP for Gloucestershire West, Viscount Rothermere, the Earl of Carlisle and Lady Rona Delves Broughton.

It is the SFO's first major inquiry into the affairs of Lloyd's since the office was formed in the late 1980s. A team of police officers, accountants and legal advisers will be seeking to interview Anthony Gooda and Derek Walker, who ran the agency company. Mr Gooda found new members for the syndicates while Mr Walker acted as the professional underwriter. Both live in England.

In 1981 Mr Walker was accused of being involved in a series of fraudulent reinsurance transactions in a trial at the Old Bailey. He was acquitted and awarded costs and Lloyd's allowed him to return to work in the market.

The underwriting members of the syndicates are having to pay up to pounds 1m or more from their own resources to meet the losses on the syndicates and are clamouring for financial help from Lloyd's.

However, the intervention of the SFO may delay any prospect of an immediate settlement by Lloyd's until the formal outside investigations are completed. Investigations of this nature can take years.

Total losses across the entire Lloyd's market are expected to have reached more than pounds 6bn over a four-year period. A large part of those losses has been caused by huge insurance claims for asbestosis, hurricanes and pollution-

related risks.