Cable & Wireless (C&W) has begun legal action to recover £25m of “secret” profits it alleges were made by companies and individuals who provided services to its insurance unit.
According to a report, it is understood that five former employees and another individual are alleged to have placed insurance business for C&W's insurance subsidiary, called Pender, with five companies in which they had an interest.
C&W set up its Isle of Man-based insurance division in 1990 to provide insurance for the group against losses incurred as the result of damage to its undersea cables and other equipment.
It later expanded to write third party business, including employers' liability and D&O policies.
Pender stopped writing new business in April last year, but C&W alleges that the £25m disappeared in the five years leading up to this date on both third-party insurance provided by Pender and policies it wrote for C&W.
C&W said it intended to recover the £25m in lost funds through a civil action.
But, according to the report, it has reported the irregularities to the relevant regulatory authorities in Guernsey and the Isle of Man, which it said could be considering pursuing criminal charges.
