John Houldsworth, a middle-aged British insurance executive, fits the image of a senior International Financial Services Centre (IFSC) employee. An expat who lived in a quiet and comfortable housing estate in the south Dublin suburb of Killiney, Houldsworth commuted to the docklands offices of his employer, Cologne Re, for the best part of a decade.

At weekends, he played a round of golf at Glen O’The Downs in Co Wicklow and turned out for a local hockey club. A well-paid actuary, he served as chairman of the highly influential Dublin International Insurance and Management Association (DIIMA), the umbrella organisation for insurance companies in the IFSC.

Like so many well-known figures in the IFSC, Houldsworth, 45, was a totally anonymous figure to the rest of the Irish business community.

Until last month, that is. Now everybody wants to talk to Houldsworth. The Briton is the man providing many of the answers to two high-profile international financial investigations that have shone a very unwelcome light on the IFSC, the hardiest jewel of the Irish economic miracle.

THERE is nothing like dragging Warren Buffett, the world’s second-richest man, into a global reinsurance investigation to draw attention.

Fresh from being described as a “financial Wild West” in The New York Times, the IFSC is now getting the finger-wagging treatment from the Financial Times and some very special attention from Eliot Spitzer, the famed New York state attorney-general, dubbed “the sheriff of Wall Street” by the American media.

Cologne Re, a subsidiary of Warren Buffett’s General Re and Maurice “Hank” Greenberg’s American International Group (AIG), conducted a suspect-looking €300m transaction down in the docklands in 2001, which allegedly had the effect of artificially boosting AIG’s reserves. It was Houldsworth who handled the transaction.

“The evidence is overwhelming that these were transactions created for the purpose of deceiving the market,” said Spitzer.

“I think this is another example of companies finding soft spots or areas where laws are not very rigorous and taking advantage of those,” said Michael Gass, the head of securities litigation and enforcement at Palmer & Dodge, a Boston-based law firm.

In Australia, Royal Commission investigators, trawling over the country’s largest corporate collapse, have also traced a path to the Dublin docklands. HIH, an Australian insurance firm, left debts of A$5.3 billion (€3.2 billion) when it collapsed in 2001. One of the “straws to break the camels back”, according to the author Mark Westfield, was the group’s purchase of the reinsurer FAI for A$300m.

The claim is that FAI inflated its value prior to its sale to HIH through contracts written with Cologne Re.

The Australian financial regulator last October banned two Cologne Re executives, one of them Houldsworth, from operating in the market. The bans are under appeal, and two previous sanctions against Cologne Re employees have been overturned. The Australian regulator has also launched an investigation into the transactions.

“My general understanding is that Dublin is viewed, along with the Cayman Islands and Bermuda, as a haven for reinsurance companies to set up offices and get away with doing things they would not be able to do elsewhere,” added Gass.

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