Reinsurance News

IRB Brasil investigation uncovers irregularities

26th June 2020 - Author: Matt Sheehan

An internal investigation into Brazilian reinsurer IRB Brasil Re has uncovered irregularities in the payment of bonuses and the amount of shares offered in its February and March 2020 repurchase program.

irb brasil reIt was carried out alongside an independent investigation by KPMG Assessores Ltda. and Felsberg Advogados following a sudden drop in IRB’s share price earlier this year.

Share prices plummeted due to confusion about a possible investment by Berkshire Hathaway, after which President José Carlos Cardoso and CFO Fernando Passos resigned.

Those responsible for the dissemination of this untrue information have now been identified by the investigation, IRB says.

Additionally, the new executive officers of the company found irregularities in the payment of alleged bonuses to former Director and other employees, in an amount already identified of approximately R$ 60 million (US $11 million).

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The new executives also verified that in February and March 2020, repurchase operations for the IRB’s shares were carried out, which exceeded the amounts authorised by the Board of Directors in 2,850,000 shares.

IRB maintains that all these operations were carried out without the Board of Directors’ knowledge, and assured that the responsible officers are no longer part of its staff.

The reinsurer presented its findings to the Federal Public Ministry, the Securities and Exchange Commission – CVM, and the Private Superintendence – Susep.

It also committed to collaborate with any future investigations and to take legal measures in order to compensate for the losses caused by its irregular conduct.

These findings have emerged alongside news that IRB has once again postponed the result of its Q1 results,  and has been ordered to come up with 1 billion reais ($194 million) to settle the court dispute that arose over its drop in share price.

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