The insolvent bank acquired by Australian businessman Lex Greensill has accused IAG executives of being aware that the ASX-listed insurance giant was issuing policies to cover billions of dollars of lending despite IAG having told courts and investors that it was kept in the dark.

The creditors of the businessman’s failed empire – which include thousands of Germans who had their savings in Greensill Bank – are trying to claim on insurance policies issued by IAG. They have taken the insurer to the Federal Court alleging they are owed around $7 billion in total.