The £2bn collapse of Australian insurer HIH may have involved "hundreds" of illegal acts, according to a government inquiry.

Lawyers for an Australian Royal Commission has announced that false accounts inflated profits and understated liabilities.

So-called "self indulgence" and bad business decisions caused the AU$5.3bn (£2bn) collapse, it said.

The Commission has now proposed prosecuting the company's executives.

HIH was Australia's second largest general insurer when it collapsed in March 2001, leaving thousands of policyholders uncovered.

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