Cologne Re pays US parent €114m

COLOGNE Reinsurance, a Dublin-based company at the centre of a worldwide investigation into fraudulent transactions, paid its US parent a dividend of $180 million (€114m) in 2007.

The payment is part of a distribution of its capital back to its US parent General Reinsurance, which is owned by Berkshire Hathaway. The conglomerate is owned by the world’s richest man, Warren Buffet.

Cologne Re and General Re have been part of a malpractice investigation by regulators in the US, Ireland, Britain, Australia and Germany.

The former chief executive of Cologne Re John Houldsworth has pleaded guilty in the US to conspiracy charges and will be sentenced next month.

Another ex-chief executive of General Re was found guilty of fraud earlier this year and will be sentenced at the same time.

According to accounts for Cologne Reinsurance Dublin, the company decided in August 2005 not to write any new business.

The move came months after the activities of Mr Houldsworth were made public. He admitted setting up “sham” transactions to assist one of the company’s clients, AIG, boost its income.

According to the company’s accounts it is still under scrutiny by the Financial Regulator here.

“The company has estimated that the future professional fees relating to the various investigations and legal proceedings may amount to $28.75m (€18.13m).”