Three former FAI executives have been committed to stand trial under charges related to so-called financial reinsurance contracts entered into by FAI General Insurance in 1998.

Tim Mainprize, Daniel Wilkie and Stephen Burroughs were yesterday afternoon committed to stand trial in the NSW Supreme Court following a one-week committal hearing in a Sydney magistrates’ court.

Mr Mainprize, who was Finance Director at FAI, and Mr Wilkie, who was COO, each face two charges of failing to act honestly in the exercise of their powers and discharge of their duties as officers of FAI General Insurance, and one charge each of providing false and misleading information.

Mr Burroughs was the company’s reinsurance manager. He will stand trial on one charge of failing to act honestly in the exercise of his powers and discharge of his duties as an officer of FAI General Insurance.

The Australian Securities and Investments Commission alleges that the true substance of reinsurance arrangements entered into by FAI with General Cologne Re Australia in 1998 was concealed from the auditors of FAI and its subsidiaries.

It is alleged the arrangements allowed FAI to report an $8.6 million profit for the 1998 financial year rather than a loss of almost $20 million.