By Glenn Dyer, Stephen Mayne and Rachael Osman-Chin (in the court for Crikey)

Convicted crook Ray Williams is doing even more porridge than insurance
spiv Rodney Adler. The HIH founder and former “legendary” CEO has been
sentenced to four years and six months jail, with a non-parole of two
years and nine months, which expires in 14 January 2008.

that spoilt but chatty brat Rodney, Williams said nothing on his way
into court and sat stoney-faced as he was sentenced on three counts of
breaching his duties as a director of HIH, by Justice James Wood.

The first charge related to HIH not telling potential investors about a
deal between HIH and the Societe Generale in which SG took up $35
million of HIH notes and HIH desposited approximately $35 million into
SG’s coffers as a sort of security for their investment. HIH investors
were not told of the money given to SG. Williams got two years for
this, a fixed term to begin 15 April 2005 and expire 14 April 2007.

The second charge related to signing off on the 1998-99 HIH annual
report which overstated operating profit by $92.4 million. Justice Wood
sentenced Williams to one year and three months to expire 14 July 2008
and said “while there is no evidence of fradulent dishonesty on the
part of the defendant he was clearly aware of the nature of the

third charge related to misleading potential investors in a US$150
million note program when Williams claimed that FAI had complied with
all obligations under the note program when it hadn’t. On this count
the former HIH CEO was sentenced to one year and three months to expire
14 October 2009.

Justice Wood said Williams’s actions had not caused the downfall of HIH
and were examples of him trying to keep the company alive. He said he
was convinced Williams had shown “a high level of contrition.”

and Williams’s age had left him “unemployed and unemployable,” Justice
Wood said. He is technically insolvent due to the loss of his
retirement pension and HIH investment. He’s likely to face bankruptcy.

”The defendant has demonstrated remorse and contrition,” he said. “The prospects of rehabilitation are excellent.”

Wood said he had considered a suspended sentence and periodic detention
but decided that full time detention was necessary.

defendant did not seek to stem his own losses by selling his
considerable stake in the company, nor did he encourage any of his
family to do so,” he said. “He was not the architect of these offences
and others in the company were equally culpable.”

Justice James said Williams has been taking drugs for depression and
suicidal tendences had ceased at the end of 2002. As Williams entered
the court he was heckled by a woman screaming “Did you lose your house?
Are you going to say sorry?”

Ray Williams will follow Rodney down to Silverwater prison this
afternoon where he’ll undertake a security clearance like the one
explained in Emma Alberici’s excellent story on The 7.30 Report last night.

Rodney made no noises about appealing his sentence yesterday but Ray
Williams’s lawyer, Robert Heathcote, went straight out of the court and
declared the sentence was “manifestly excessive” and would be appealed.
“Mr Williams is bitterly disappointed in the sentence handed down this
morning,” he said.

Crikey thinks both sentences are about right, even though neither
Williams nor Adler were charged in connection with the actual failure
of HIH. There’s now no-one we can actually blame for the collapse,
although two of the key figures are behind bars.

Williams was the man who built and ran HIH for almost 30 years, so he
is more responsible than anyone else. However, it’s still debatable
whether HIH could have survived without the FAI takeover, which was a
can of Rodney-created worms that lopped at least $500 million off the
value of HIH.

Adler is certainly more fundamentally dishonest and slippery than
Williams and his media games and ducking and weaving provide an insight
into his dodgy character. Williams has been tight-mouthed by
comparison, the only limited public comment coming in a funny feature
in The AFR about a year ago.

Williams had earlier arrived at court in a taxi, accompanied by only
one member of his family, his son. There was no sign of the “golden
hello” cuff-links, watches or the Grange Hermitage lifestyle that
marked the HIH “culture” for its senior executive team when he was in

Twelve years ago, in 1992, Ray Williams was paid a bonus of $4.7
million when HIH floated and his stake in the company peaked at about
$30 million before becoming worthless in the wake of Australia’s
biggest corporoate collapse with debts of $5.3 billion.

ASIC chairman Jeff Lucy is having another gloating presser this
afternoon and he certainly can be well satisfied with the outcome. The
HIH collapse caused more misery than any other, so the man most
responsible deserves some misery of his own, even if the charges
weren’t directly related to the collapse.

After all, Al Capone only ever got done for tax evasion, but at least he got done.