When Independent Insurance published its accounts for 2000 its market value was in excess of £900 million, its assets were over £300 million and profit for the year £22 million. The outlook was declared "positive". Within months of publication the business collapsed and trading in its shares suspended. Over a thousand jobs were lost and thousands of shareholders lost their investments. Over £366 million had to be paid out from an industry compensation fund to policy holders.
What had come to light were the deliberate actions of three executives: Chief executive Michael Bright, the deputy director and the finance director withheld insurance claims data from the company's actuaries. Additionally the chief executive together with the finance director made incomplete disclosure of some of the "bad" agreements with the company's re-insurers. These actions made the company look more financially robust than it was.
The SFO investigation together with the City of London Police culminated in a defended trial in 2007. The prosecution case amounted to 30,000 pages, nearly 240 witness statements and 1,500 documents shown to the jury. The defendants were accused of conspiring to defraud the directors, employees, shareholders, policy holders and others with an interest in knowing the company's financial state. It was not that their actions brought the company down; instead they masked the company's troubled performance. The resulting guilty verdicts brought prison terms for all three defendants of between seven and three years plus bans from being company directors for up to 12 years.
