Former HIH Insurance finance director Dominic Fodera will face trial on six criminal charges relating to a reinsurance “side deal” that inflated the company’s 1999 profit statement by millions of dollars.

The Australian Securities and Investments Commission (ASIC) alleges the deal with Hannover Re allowed HIH to incorrectly claim a $92 million reinsurance recovery. The German reinsurer did not, in fact, take on any risk with HIH. ASIC further alleges that HIH directors were not told about the deal.

A committal hearing last week found there was enough evidence to commit Mr Fodera to trial. He will face two charges of failing to act honestly as a director, and four charges of providing misleading information to HIH’s reinsurance committee and auditor.

The dishonesty charges carry a maximum penalty of five years’ jail. Mr Fodera could also face two-year sentences for each of the remaining charges. He is on bail and due to reappear in court on October 6.