Recurring nightmare

8 October 2020 By John Foley Follow @johnsfoley

As if the conglomerate’s weak cash flows weren’t problem enough, boss Larry Culp may soon have to field an SEC lawsuit over GE’s misadventures in insurance, which long predate his arrival. A bigger problem, though, is GE Capital’s potential for creating bigger, nastier surprises.

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General Electric replaced the head of GE Capital on Oct. 6, days after the U.S. securities regulator said it was considering bringing a lawsuit over the division’s historic practices.

Jennifer VanBelle will head the conglomerate’s finance division, which helps GE lease its aircraft engines and power equipment to customers and manages insurance policies. VanBelle is also the company’s treasurer. She has been at GE since 1998, much of that at GE Capital.

VanBelle replaces Alec Burger, who took leadership of GE Capital in January 2018, just after it announced a $6.2 billion charge relating to long-term insurance policies that cover customers’ old-age care costs.

GE said on Sept. 30 that the U.S. Securities and Exchange Commission had issued it a “Wells notice,” a warning that it may bring a civil action against the company for possible violation of securities laws. The notice relates to the way GE calculated and disclosed funding gaps in its insurance business.

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