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June 14, 2012

ASIC v Ingleby (AWB)

ASIC has announced that Mr Paul John Ingleby, the former Chief Financial Officer of AWB, has acknowledged that he contravened section 180(1) of the Corporations Act 2001 arising from AWB’s supply of wheat to Iraq under the United Nations (UN) Oil-for-Food Programme (OFFP).

Mr Ingleby acknowledged that between December 2001 and September 2004, he failed to exercise his powers and discharge his duties as an officer with care and diligence in that he:

knew that AWB’s trade with Iraq was conducted under the OFFP which prohibited direct payments to the Iraqi Government;
knew that payments from a UN escrow account to AWB in respect of contracts for the supply of wheat to Iraq could only be made for the purpose of the OFFP;
co-authorised payments to Alia for Transportation, a Jordanian trucking company, in respect of inland transportation fees payable for contracts for sale of wheat to Iraq;
had information available to him to raise questions as to the legitimacy of the inland transportation fees and to suggest that they were ultimately being paid to the Iraqi Government and were recovered by AWB from the UN escrow account; and
took no steps to ascertain whether or not the inland transport fees were ultimately being paid to the government of Iraq.

In a civil penalty action ASIC and Mr Ingleby made a joint submission to the Supreme Court of Victoria that the appropriate penalty for the admitted contravention ought to be a pecuniary penalty of $40,000 and that Mr Ingleby be disqualified from managing corporations for a period of 15 months.

The Court has reserved its decision on the matter.

ASIC’s proceedings against four other former officers of AWB are ongoing. The Court has reserved its decision in relation to a Statement of Agreed Contraventions heard in relation to the conduct of Andrew Alexander Lindberg, the former Managing Director of AWB.

Background

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Posted 14th June 2012 by David Jacobson in Compliance, Corporate Governance, Corporations Act