THE Australian Securities and Investments Commission is considering giving the Federal Police voluminous and possibly incriminating transcripts of highly confidential interviews it conducted with former AWB employees last year.
Lawyers representing six former AWB executives and directors, who are already being sued by ASIC, have strongly objected to the proposal. Some have flagged that they may seek a Federal Court injunction if ASIC capitulates to the Federal Police request.
The former AWB executives are especially concerned that any information they gave ASIC during wide-ranging and formal interviews in mid-November was obtained using ASIC's unusual coercive powers under section 19 of the ASIC Act. Anyone who refuses to answer questions in a section 19 examination can be jailed or fined.
The Federal Police does not have the same coercive powers: suspects can decline to answer questions and instead wait until they are confronted in court.
The continuing dispute over the confidential transcripts has highlighted what appears to be an unusual double-role played by the corporate regulator, as both ASIC and the multi-agency Oil-for-Food Taskforce, led by the Federal Police, conduct separate — and yet, apparently, joint — investigations into possible criminal breaches arising from the wheat exporter's payment of kickbacks to Iraq.
AWB funnelled $290 million to Saddam Hussein's regime between 1999 and 2004, knowing the payments breached UN economic sanctions.
In invoices it submitted to the UN oil-for-food program, AWB falsely described the kickbacks as trucking fees or after-sales service fees for wheat it had delivered to Iraq.
In late 2006, soon after Terence Cole, QC, released his damning report on AWB's activities, the Howard government set up a taskforce to investigate potential criminal action against AWB officers and anyone else involved in the kickbacks.
ASIC is suing six former AWB executives and directors in the Victorian Supreme Court, alleging they breached their duties, commercially damaged the company, and brought it into disrepute by engineering and then not halting the payments to Iraq.
The officers being sued are: former chairman Trevor Flugge; former managing director Andrew Lindberg; former chief financial officer Paul Ingleby; former group general manager of trading Peter Geary; former head of international sales and marketing Michael Long; and former regional head of sales and marketing in the Middle East, Charles Stott.
AWB Price at posting:
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