Sydney media reports suggesting the Australian Prudential Regulation Authority (APRA) is considering criminal charges against Zurich Australia ended up with retractions this morning. In fact, the regulator is only considering prosecuting individuals who formerly worked for the company.

One of those individuals – former Asia-Pacific CFO Warwick Churche – has threatened to sue APRA for pre-judging him. Last Thursday Mr Churche, who was CFO from 2001 until he was made redundant in 2004 – applied to stop the Australian Securities and Investments Commission (ASIC) giving APRA transcripts of a formal examination ASIC had with him last year.

In the Federal Court in Sydney last week, Justice Peter Graham refused Mr Churche’s request, saying there was no evidence that fear of the consequences of disclosure would deter Mr Churche from pursuing his right to challenge ASIC in court.

In May last year Zurich Australian Insurance and Zurich Financial Services Australia signed enforceable undertakings with both regulators and corrected their published accounts for 2000 to 2003. The insurer’s 2000 profit had been overstated by $61 million.

An APRA spokesman told Sunrise Exchange News the regulator’s stance is unchanged from the statement it released on May 26 last year, which said no legal action would be taken against the Zurich companies.

APRA also said at that time it accepted enforceable undertakings arising from two financial reinsurance transactions with General & Cologne Re Group Australia that were undertaken in 2000.

APRA says the two companies accepted that information was withheld and misleading statements were made to the regulator, auditor and actuary. Several people knowingly misled APRA about the true nature of the reinsurance transactions over an extended period “by a course of conduct and actions”.

Lawyers for ASIC opposed the suppression application and Justice Graham reserved his decision on whether ASIC should give Mr Churche reasons for its decision to give the transcript to APRA.

In April the Australian Securities and Investments Commission decided not to take any legal action after a parallel inquiry.