LONDON: Britain’s accounting watchdog said it would investigate the conduct of individuals who worked for RSA Insurance Ireland in the run-up to its bail-out by its UK parent.
The Financial Reporting Council (FRC) said the investigation was related to “financial irregularities” at the Irish business. It did not identify the individuals or say if they still worked at the business.
The investigation will cover 2012 “and relevant prior periods as a result of the identification of issues within the claims and accounting functions announced by RSA Insurance Group at the end of 2013,” the FRC said.
RSA has blamed a handful of executives at the Irish division for accounting irregularities that led to the group overstating its profits in Ireland and required it to tap shareholders for cash to plug the hole in its finances.
The insurer was forced to inject £200m into its Irish unit.
RSA said the FRC’s investigation was not into the company itself but into individuals who are members of accounting, auditing or actuarial professional bodies.
We understand that the investigation will therefore cover members of these professions who were employed by RSA at the time. RSA Group will of course assist with these inquiries if requested to do so,” the company said in a statement.
Philip Smith, the former chief executive of RSA’s Irish business, last month won a €1.25m compensation payment for a constructive dismissal case. RSA is appealing the award.
The FRC said it would co-operate with the Irish authorities as necessary, but declined to elaborate.
