| 13.4°C Dublin

Ex-RSA Ireland boss Smith blamed subordinates at exit


Philip Smith

Philip Smith

Philip Smith

The former chief executive of RSA Ireland blamed his subordinates for the accounting problems that cost the UK insurer hundreds of millions.

In an eight-page resignation letter, Philip Smith laid the blame for many of the decisions he made on colleagues further down the chain.

He later claimed he was constructively dismissed by the company.

Smith, who was paid €34,000 a month in the job, said he had been made the "fall guy" for RSA's problems.

The case will appear before the Employment Appeals Tribunal this week.

Smith resigned shortly after major accounting errors were uncovered at RSA Ireland in 2013.

The London-based company was forced to issue a series of profit warnings following revelations that its Irish unit had insufficient reserves.

RSA later undertook a billion euro rights issuance, cut dividends and sold businesses to boost its capital cushions.

Smith's allegations are contained in a resignation letter sent to former RSA UK boss Adrian Browne in late November 2013.

Browne later resigned from RSA to take up a position at insurance broker AJ Gallagher.

As well as blaming subordinates, Smith made accusations about a report submitted to the Central Bank days after the problems were uncovered.

"It is clear to me from [letters from Browne] and from previous exchanges that RSA has decided that I should be removed from my position and that, at best, it proposes to adopt a summary process, without any regard whatsoever either to my legal rights or entitlements, my good name and reputation or the impact upon my personal or family life," wrote Smith.

Smith called the report prepared for the Central Bank "a wholly flawed and defective investigation report."

"Calling it a draft report does not cure its defects. Its authors arrived at findings which no reasonable investigator could come to and they exceeded any reasonable terms of reference by writing in effect a second report, castigating me for alleged flaws in my management style.

"It was reckless published in the company's haste to damnify me.

"Indeed, I am now aware that this report was published to the Central Bank of Ireland even before the draft copy labelled 'private and confidential and legally privileged' was forwarded to me.

"No alleged duty to the Central Bank could excuse this.

"Further it is clear that what has been called the 'reserving issue' has been coupled with an entirely separate issue arising from actuarial concerns in the motor business.

"By coupling these two matters in communications with the Central Bank of Ireland and in its formal and informal press statements, the company has sought to somehow blame me for relatively large scale capital issues.

"It is clear having regard to how the company has dealt with this matter to date that I have no hope whatsoever of a fair hearing and that a decision has already been made to terminate my employment."

Smith is due to give evidence for the first two days of his constructive dismissal case, which will begin tomorrow.

RSA will be disputing the entirety of his claim.

Brian O'Moore SC for RSA Insurance Ireland has said the case has "no merit".

Sunday Indo Business