AWB fails in bid to examine

Document Sample
AWB fails in bid to examine Powered By Docstoc
					AWB fails in bid to examine ASIC inquiry files                     http://www.theage.com.au/business/awb-fails-in-bid-to-examine-asic-inq...




         LEONIE WOOD
         October 10, 2009
         THE corporate regulator will not be forced to give AWB vast amounts of confidential information garnered
         during its investigation into the Iraq oil-for-food kickbacks scandal after an appeals court ruled the wheat
         exporter had already lost the right to claim legal privilege over the material.

         The Victorian Court of Appeal's unanimous decision overturned an earlier order by Supreme Court judge
         Ross Robson, who is about to begin hearing a lengthy civil penalty case brought by the Australian Securities
         and Investments Commission against former AWB chief executive Andrew Lindberg.

         ASIC alleges Mr Lindberg breached his fiduciary duties because he knew about the estimated $300 million of
         payments to Saddam Hussein's former regime and failed to do anything to halt them.

         It also alleges that Mr Lindberg's failure to stop the payments, which breached UN sanctions against Iraq,
         helped bring AWB into disrepute.

         AWB wanted to examine material compiled by ASIC, including transcripts of interviews with former AWB
         employees and witness statements, which ASIC was expected to use during Mr Lindberg's trial.

         But in a separate case before the Court of Appeal, ASIC yesterday was refused leave to appeal Justice
         Robson's decision to shut the door on ASIC's allegations against Mr Lindberg regarding the so-called Tigris
         transaction, his conduct in relation to the UN Volcker Inquiry and Project Rose.

         Project Rose was the internal AWB investigation into the kickbacks that later was interpreted as a
         conspiracy to cover up the emerging scandal.

         Tigris was a complex deal in which AWB assisted former senior BHP executive Norman Davidson Kelly -
         described by Commissioner Terence Cole, QC, as a ''thoroughly disreputable man'' - to make several millions
         of dollars for himself from a highly questionable ''debt'' he claimed Iraq owed in relation to a 1996 wheat
         shipment. The Volcker Inquiry was the investigation into corrupt payments and practices arising from the UN
         oil-for-food program.

         Iraq extracted billions of dollars of kickbacks from companies supplying it with goods as part of the oil-for
         food program, and numerous international company executives were accused of personally benefiting from
         secret payments.

         ASIC also wanted to argue that, as CEO, Mr Lindberg's duties included taking steps to investigate what he
         knew about the kickbacks.

         Now that the Court of Appeal has declined ASIC leave to appeal, Mr Lindberg's trial appears set to proceed
         as planned on October 19.

         AWB argued that while it did not know what was in the documents arising from ASIC's investigations, it
         might have a claim for legal professional privilege because some of the material was likely to include advice
         given by AWB's in-house counsel or its external lawyers.

         Justice Robson ruled in favour of AWB in early August, directing that both Mr Lindberg and AWB examine
         the documents, and ASIC appealed.

         Chief Justice Marilyn Warren, Justice Phillip Mandie and Justice Marcia Neave ruled in ASIC's favour,
         saying that once the material fell into the hands of a third party - in this case, ASIC - the claim for legal
         professional privilege was lost. Justice Mandie said ASIC did not need leave to appeal because the nature of
         the case suggested it was seeking an injunction against a court order.




1 of 2                                                                                                                 10/10/2009 7:53 AM
AWB fails in bid to examine ASIC inquiry files                       http://www.theage.com.au/business/awb-fails-in-bid-to-examine-asic-inq...


         But he added that, if necessary, there was ''sufficient doubt'' about Justice Robson's decision to justify leave.

         Justice Mandie said that ''substantial injustice would be done to ASIC if the orders were to be left
         undisturbed'' because ASIC ''for no good reason'' would be forced to disclose to AWB material about the
         investigation.




         1.   Stocks trim winning-week gains
         2.   Stimulus cut could cost 100,000 jobs: Henry
         3.   Australia ranked No. 2 in finance
         4.   Banks fail the ethics test
         5.   Gold, dollar gain from US stumble
         6.   More Business articles




2 of 2                                                                                                                   10/10/2009 7:53 AM

				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:4
posted:4/8/2010
language:English
pages:2
Description: AWB fails in bid to examine...