The Wire

Today, former HIH managing director Terry Cassidy faced his sentencing hearing in the Supreme Court of NSW. He will find out at a later date what his prison term will be but he will undoubtedly join his former colleagues, Ray Williams, HIH’s former CEO and former HIH director, Rodney Adler in serving time in jail. Last month Mr Cassidy pleaded guilty to three criminal charges arising from his management of the HIH group of companies from 1998 to 2000. Mr Williams and Mr Adler will serve minimum prison terms of two years and nine months and two years and six months respectively for involvement in the $5.3 billion collapse of HIH insurance in 2001. The jailings have seen some question the length of their sentences. Labor corporate governance spokesperson, Senator Penny Wong, has called on the regulator the Australia securities and Investments Commission or ASIC to explain is prosecution strategy, which ultimately saw, some charges dropped. However other observers claims the real importance of the HIH collapse is not the jailing of Adler, Williams and possibly Cassidy, but the new batch of corporations laws that have been enacted since the collapse of HIH, a package commonly know as “CLERP 9”. Professor Ian Ramsay is the Director of the Centre for Corporate Law and Securities Regulation at the University of Melbourne. He is also the author of a key report to the government that advocated the need for better independence of auditors from the client companies being audited. He spoke to The Wire about the implications of that the HIH debacle has had on company law in Australia.