IRB Brasil Re, along with its management and shareholders, is set to be investigated by the country’s securities regulator, according to reports from Reuters.
The investigation is described as broad in nature and will include a look at an 8% drop in IRB’s shares earlier this year, after a letter released by asset manager Squadra questioned the reinsurer’s financial statements.
The regulator will look to determine whether there was a conflict of interest considering Squadra had a short position in the company.
It’s been an eventful year for the reinsurer, having announced in March that it had replaced its President and Chief Financial Officer amid confusion over a possible investment by Berkshire Hathaway. The announcement prompted its shares to fall 32%.
A month later saw a number of IRB Brasil Re board directors resign and focus on other position due to the pandemic.
The reinsurer also recently announced its decision to postpone the release of its first-quarter 2020 financial results, although this is not uncommon in light of the disruption caused by coronavirus.
This latest move by Brazil’s securities regulator follows a decision by the country’s insurance regulator earlier this month to inspect IRB for potential liquidity problems.
Another probe will look into the company’s financial statements, taking into consideration potential problems cited by Squadra and also the alleged dissemination of false information by IRB’s management.
Reuters says IRB and Squadra did not immediately respond to requests for comment.