Former FAI General Insurance executives Daniel Wilkie and Ashraf Kamha have been committed to stand trial on criminal charges of acting dishonestly before HIH Insurance purchased the doomed insurer.

They face three criminal charges arising from an investigation by the Australian Securities and Investments Commission (ASIC) into the affairs of the collapsed HIH group.

Two charges allege they failed to act honestly in the exercise of their powers and discharge of their duties as officers of FAI General.

ASIC alleges Mr Wilkie and Mr Kamha deceived the Australian Stock Exchange by releasing an inflated profit result in the accounts of FAI Insurances for the half-year ended December 31 1997.

It also alleges the men failed to act honestly, with the intention of deceiving FAI’s external actuary, by not providing information material to the updating of certain insurance claims.

The charges include withholding the results of a review indicating under-reserving in certain classes of insurance in the company’s corporate and professional insurance division.

Both have also been charged with one count of being privy to the fraudulent altering of a book affecting or relating to the affairs of FAI.  

ASIC says all the charges relate to reductions in the recording of estimates of claims made on FAI insurance policies.

Mr Wilkie and Mr Kamha had their bail conditions continued and will appear in the NSW Supreme Court on a date to be fixed.

HIH Insurance paid $300 million for FAI Insurance in September 1998 and collapsed with debts of $5.3 billion in March 2001.