In brief

  • ASIC has achieved a breakthrough in its long-running proceedings against former directors of AWB, with former Managing Director Andrew Lindberg admitting in court that he contravened the Corporations Act 2001 by failing to act with the required care and diligence as an AWB director. 
  • The admissions by Mr Lindberg relate to both a failure to make inquiries as well as failures to inform Boards of matters within his knowledge. ASIC and Mr Lindberg have jointly submitted to the court that he be fined $100,000 and disqualified from managing corporations until September 2014.
  • Mr Lindberg has made admissions in civil proceedings. No criminal charges, including in relation to foreign bribery, have been laid in relation to AWB’s or its representatives’ conduct. The AFP has previously announced (in August 2009) that it has discontinued its investigation into whether criminal offences such as bribery were committed.

In what ASIC has described as a ‘significant milestone’, Andrew Lindberg, former Managing Director of AWB Limited (AWB), has made admissions in the Supreme Court of Victoria to four contraventions of section 180(1) of the Corporations Act 2001, in relation to a failure to exercise the requisite degree of care and diligence in exercising his powers and discharging his duties as an AWB director.

Mr Lindberg and ASIC made a joint submission to the court that the appropriate penalty should be a $100,000 fine and disqualification from managing corporations until September 2014.

The admissions made by Mr Lindberg relate to AWB’s conduct in supplying wheat to Iraq and subsequent investigations into that conduct. Mr Lindberg has admitted to:

  • a failure to make inquiries and ascertain whether certain conduct was contrary to UN Security Council resolutions, and whether that conduct was to occur with the knowledge and approval of the UN,
  • a failure to inform the AWB Board about limitations to an internal investigation into AWB’s wheat contracts in Iraq, and a failure to qualify statements and information given to the Boards of AWB and a subsidiary,
  • a failure to inform the Boards of AWB and a subsidiary of a particular agreement, and that the agreement mis-described the nature of a payment under that agreement,
  • a failure to inform the AWB Board of matters that had been put to him in an interview in February 2005 with investigators from a UN Independent Inquiry Committee.

ASIC’s investigation into AWB followed recommendations in the November 2006 report of the Cole Inquiry into the UN Oil-For-Food Programme (which examined the conduct of Australian companies identified in the Volcker Report, a UN Committee report on corruption in relation to the UN Oil-for-Food Programme). ASIC commenced civil proceedings against Mr Lindberg and five other former AWB directors and officers in December 2007.

A related investigation by the AFP to determine whether criminal offences had been committed was discontinued in August 2009. There have been no criminal charges laid in relation to AWB’s conduct, including in relation to foreign bribery.

ASIC is continuing to pursue civil proceedings against the other five former AWB directors and officers, namely former Chairman Trevor Flugge, former Group General Manager Trading Peter Geary, former CFO Paul Ingleby, and former General Managers of International Sales and Marketing, Michael Long and Charles Stott.