shareholder class action

MONOPOLY wheat exporter AWB, at the centre of a scandal over alleged kick-back payments to Iraqi dictator Saddam Hussein, could soon face a legal challenge from its shareholders.
A Melbourne-based law firm said today it was preparing a shareholder class action, which would argue the publicly listed company had breached its requirement of continuous disclosure.

AWB's share price has fallen about 30 per cent since a commission of inquiry last month began probing its conduct under the United Nation's oil-for-food program.

Maurice Blackburn Cashman principal lawyer Ben Slade said evidence given by AWB officials to the inquiry, and follow-up announcements by AWB on January 18 and 19, revealed details of its dealings with the Iraqi Grains Board.

AWB failed to disclose this information to the market at the right time, Mr Slade said.

"There is little doubt that information not disclosed to the market was material and that the market has been mislead by AWB.

Advertisement:
"Shareholders who have suffered loss as a result of AWB's conduct are entitled to recover those losses through the instigation of a class action."

The legal firm said AWB shareholders who bought their stock between August 22, 2001, and the start of the inquiry on January 16 could join the class action.

In 2003, Maurice Blackburn Cashman obtained $97 million for the shareholders of GIO in Australia's first shareholder class action.

AWB's share price closed at $4.49 today, down from $6.40 on January 12.