COLOGNE REINSURANCE, the Dublin-based company involved in a “sham” scheme to inflate the reserves of insurance giant AIG, says it is continuing to fully co-operate with the Financial Regulator in its investigation into the company’s activities.
In documents recently filed by CologneRe at the Companies Office, the directors state that having wound down all of CologneRe’s business activities, the company intends to enter liquidation. It will co-operate with the regulator during this process.
In January, CologneRe’s parent, GeneralRe, a subsidiary of Warren Buffett’s Berkshire Hathaway group, entered into settlements with the US department of justice and the Securities and Exchange Commission (SEC) in relation to its “non-traditional products”.
CologneRe was a prime participant in a scheme designed to fraudulently inflate AIG’s reserves by $500 million (€393 million) in 2000 and 2001 to make its balance sheet look stronger than it was, boosting its share price. The Irish reinsurance market then was unregulated, like others in the EU.
The IFSC-based firm has been winding down its business activities since the scandal broke in 2005, and it finally ceased trading on July 15th, 2009.
Its move draws a line under the long-running saga, which included the prosecution and conviction of several GeneralRe executives, including a former CologneRe director.
Accounts filed at the Companies Office show that, as of the end of 2009, it had an investment portfolio of $134 million and generated investment income of $7 million last year. There were no asset impairments during the year.
The accounts have been prepared on the basis that the company is no longer a going concern.
CologneRe estimates that its future costs relating to various inquiries and legal proceedings may amount to $3 million.
