ASIC has secured another breakthrough in its civil proceedings
against former directors and officers of AWB, with former CFO Paul
Ingleby becoming the second former AWB director or officer to
acknowledge in court that he had contravened the Corporations
Mr Ingleby acknowledged a failure to act with the care and
diligence required of an officer in his position. ASIC and Mr
Ingleby have jointly submitted the appropriate penalty should be a
$40,000 fine and a 15 month disqualification from managing
This follows former AWB Managing Director Andrew Lindberg also
recently admitting to Corporations Act contraventions1.
Mr Ingleby and Mr Lindberg's admissions were made in civil
proceedings brought by ASIC, and follow ASIC's recent success
against former James Hardie directors and officers. No criminal
charges, including charges of foreign bribery, have been laid
against AWB or its representatives.
Former AWB Chief Financial Officer, Paul Ingleby, has become the
second former AWB director or officer to make an admission to the
Supreme Court of Victoria to a contravention of section 180(1) of
the Corporations Act 2001. Mr Ingleby has acknowledged
that he failed to exercise his duties as AWB officer with the
degree of caution and diligence that a reasonable person in his
position would exercise.
In a joint submission to the court, ASIC and Mr Ingleby
indicated that the appropriate penalty should be a $40,000 fine and
a 15 month disqualification from managing corporations.
Justice Robson reserved his decision, but indicated in court
that he would not increase that penalty.
The acknowledgements by Mr Ingleby relate to a failure to
exercise his powers and discharge his duties as an AWB officer with
the requisite care and diligence.
In circumstances where he knew that AWB's trade with Iraq
was conducted under the UN Oil-for-Food Programme (OFPP)
prohibiting direct payments to the Iraqi Government, and that
payments from a UN escrow account to AWB in relation to Iraqi wheat
supply contracts could only be made for OFPP purposes, Mr Ingleby
having information available to him as to the legitimacy of
certain fees, and information suggesting that those fees were being
ultimately paid to the Iraqi Government (and being recovered by AWB
from a UN escrow account),
taking no steps to ascertain whether the fees were in fact
ultimately being paid to the Iraqi Government, and
taking no (or no reasonable) steps to inform the AWB Board of
the information which suggested that payments of the fees were
ultimately being paid to the Iraqi Government.
ASIC's investigation into AWB followed recommendations in
the November 2006 report of the Cole Inquiry into the UN
Oil-For-Food Programme. No criminal charges were laid in relation
to AWB's conduct, including in relation to foreign bribery, and
related investigations by the AFP were discontinued in August
In December 2007 ASIC commenced civil proceedings against Mr
Ingleby and five other former directors and officers of AWB. The
development in relation to Mr Ingleby follows recent admissions in
court by former AWB Managing Director Andrew Lindberg to
contraventions of the Corporations Act for failing to act with the
required care and diligence as an AWB director.
The court has reserved its decisions in relation to Mr Ingleby
and Mr Lindberg. ASIC's civil proceedings against former
Chairman Trevor Flugge, former Group General Manager Trading Peter
Geary and former General Managers of International Sales and
Marketing, Michael Long and Charles Stott, are ongoing.
The deals between ASIC and Mr Ingleby, and ASIC and Mr Lindberg,
for contraventions in relation to their duties as officers or
directors follow ASIC's recent success against former directors
and officers of James Hardie.
Businesses should review their standard form contracts for unfair terms to ensure they do not fall foul of the new laws.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).