Labor attacks PM over HIH collapse

Labor attacks PM over HIH collapse | Insurance Business Australia

Labor attacks PM over HIH collapse
The Australian Prime Minister’s alleged involvement in “secret payments” as part of the collapse of HIH Insurance Limited has been placed under the spotlight as major party leaders clashed at Parliament House in Canberra this week.

Prior to its collapse in 2001, HIH was a publicly listed company tagged as the second largest general insurer in Australia that had operated in many other countries.

The controversy surrounding Malcolm Turnbull’s involvement in the collapse of HIH has been rekindled by Labor leader Bill Shorten, after a week of having been accused of taking “backhanders” from his days as national secretary of the Australian Worker’s Union, Australian Financial Review reported.

Labor brought up the HIH collapse after the former union boss was accused of corruption over funds received by the union for deals covering a project.

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“Does the Prime Minister stand by his statements on secret payments and should government policy be extended to him?” asked Mark Dreyfus, shadow attorney-general.

“Can the Prime Minister confirm that he was party to a secret payment to settle his litigation which alleged he personally breached corporation law in the collapse of HIH? A devastating collapse which saw thousands of Australians left with worthless insurance policies. Is this another example, just like penalty rates, where the Prime Minister believes it’s one rule for him and his big business friends, and another for workers?”

In response, Turnbull said the issue with HIH does not compare with Shorten’s union days and that he “made no payments, secret or otherwise,” AFR reported.

He also called the jab at his history with HIH as a “pathetic attempt to amplify the politics of envy.”

Turnbull was managing director and chairman of Goldman Sachs Australia, the financial adviser to FAI, during the HIH takeover bid in 1998.

Turnbull was alleged, by HIH liquidators, to have known that FAI was overvalued, but was cleared by the Heydon Royal Commission, subject to a subsequent damages claim. The case was settled confidentially without admission of fault in March, 2009.

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