The Australian Securities and Investments Commission (ASIC) has experienced a further victory in the legal case against the AWB after penalties imposed on the wheat board’s former CFO Paul John Ingleby were increased.
Last August, Ingleby was disqualified from managing corporations until 31 December 2012, a period of four-and-a-half months, by Justice Robson of the Supreme Court of Victoria for contravening section 180(1) of the Corporations Act 2001. Ingleby was also required to pay a penalty of $10,000.
The disqualification and penalty conditions came two months after Ingleby admitted failing to ascertain whether inland transport fees were paid to the government of Iraq arising from AWB’s supply of wheat to the country under the United Nations Oil-For-Food Programme.
However, ASIC appealed the terms, calling for the court to recognise a more appropriate disqualification period of 15 months along with penalty of $40,000.
On 19 March, the Court of Appeal found in favour of ASIC and increased Ingleby’s penalty to meet ASIC’s recommendations.
The corporation watchdog initially launched proceedings against six former AWB directors in December 2007 after completing an inquiry on behalf of the Australian Government relating to the UN Oil-For-Food Programme. It claimed each defendant had contravened the Corporations Act sections 180 (requiring company officers to act with care and diligence) and 181 (to discharge their duties in good faith and for a proper purpose).
As well as Ingleby, the defendants also included former AWB chairman Trevor Flugge, MD Andrew Lindberg, group general manager of trading, Peter Geary, and the two general managers of international sales and marketing, Charles Stott and Michael Long. The maximum penalty for breaching the law was $200,000 and disqualification from managing a corporation.
Last August, Lindberg was disqualified from managing corporations until 14 September 2014 and ordered to pay $100,000. He admitted to contravening the Corporations Act in May.
ASIC’s proceedings against the remaining four AWB defendants are ongoing.