Chief HIH liquidator Tony McGrath has filed a claim against people and organisations involved with FAI Insurance when it was sold to HIH, including merchant banker and Liberal candidate for Wentworth Malcolm Turnbull.

Apart from Mr Turnbull, who was Chairman of Goldman Sachs Australia at the time, the list of 10 people includes his former colleague at Goldman Sachs Australia, Russell Pillemer, FAI CEO Rodney Alder, and former FAI executives Timothy Mainprize and Daniel Wilkie.

Mr McGrath is seeking financial damages on behalf of HIH creditors after the $5.3 billion collapse of the company in 2001.

The 2002 HIH Royal Commission revealed that the purchase of embattled FAI Insurance played a part in the $5.3 billion collapse of HIH Insurance in 2001.

Mr Turnbull worked with Mr Adler in 1998 on a scheme to buy out the other FAI shareholders using funds partly supplied by Goldman Sachs. The bank decided against the move after deciding FAI was worth one-tenth of the amount in the published accounts. 

To recoup Goldman’s costs, Mr Turnbull suggested Mr Adler hire the bank for $900,000 to help dispose of FAI. Mr Adler agreed on September 24, one day after unloading half his family’s holdings to HIH in a private transaction.

Royal Commission counsel Norman O’Bryan QC said Mr Turnbull had a “legal and ethical” duty to tell the board of FAI its conclusions, but royal commissioner Neville Owen cleared both Mr Turnbull and Goldman Sachs of any wrongdoing.

The firm has faced questioning by the Government for knowing about FAI’s financial woes but saying nothing. Yesterday a Goldman Sachs spokesman said the firm will “vigorously defend” any action brought against it.