The independence of Bermuda-based reinsurer Alea’s directors has been called into question over payments made to private equity group Kohlberg Kravis Roberts and Fortress, the group buying out the reinsurer for an agreed $162 million bid, according to the Financial Times.

KKR is Alea’s biggest shareholder with a 39 percent stake, and has committed to accepting Fortress’ offer, despite the opposition of minority shareholders who want to hold out for a higher offer, the report continued.

The report cites London hedge funds Odey Asset Management and Polygon, as well as Henderson Global Investors, accusing Fortress of underpaying for Alea with its agree 93 pence per share bid, and questioning why KKR and related parties received $1.1 million per year in fees when the share price fell from 240 pence to 60 pence.

The report added two of three independent directors have commercial relationships which could compromise their independence.

The FT said Alea and KKR delcined to comment and Fortress could not be reached for comment.

According to Alea’s report and accounts, published last week, at December 31 2006 KKR received annual advisory fees of $750,000.

Alea also paid $350,000 to Fisher Capital.

The report and accounts say that Alea non-executive James Fisher, the majority shareholder and managing member of Fisher Capital, and Fisher Capital are both limited partners of KKR Partners (International) Limited Partnership, the FT said.

“We believe this is the wrong time to sell and the wrong price, and impetus to do the deal arises because one lead investor is tired and wants an exit,” Odey head of research Paul Macaskie told the FT.

He added: “It is disclosed that two of the three independent directors have commercial relationships, which on the face of it, could compromise their independence.”

According to the annual report, chairman John Reeve is a limited partner in the KKR Partners III Limited Partnership. Timothy Faries, non-executive director, is a partner in Appleby, a Bermudian law firm, which received fees of $49,338 in 2006 in connection with legal services provided to Alea.

Alea said in the report and accounts it did not believe this compromised the independence of the directors.

Last week Henderson,the second-biggest shareholder after KKR and a vehement opponent of the Fortress deal in its current form, increased its stake from 8.2 to 9.3 percent.

It is understood to have paid more than Fortress’s 93p a share offer, a clear indication it is ready to fight the deal.

A circular to shareholders published last week showed that Fortress had a $1.6 million break-fee.