ON-FARM

ASIC to appeal AWB executive penalty

The Australian Securities and Investments Commission (ASIC) have applied through the Victorian Court system for an appeal on the decision to dismiss proceedings against the embattled former AWB executive Peter Geary.

Kristy Moroney
ASIC to appeal AWB executive penalty

The proceedings against the former AWB group general manager for trading stem from the findings of the 2005 United Nations (UN) Independent Inquiry Committee (IIC), who were sent to investigate allegations the Iraqi government had evaded imposed sanctions. 

The IIC found among other things, kickbacks were paid to the Iraqi government in connection with contracts with various foreign companies, including Australian company AWB, in relation to the supply of humanitarian goods.

ASIC has accused Geary of breaching his duties as an executive no less than 13 times in what has become known as ‘the oil for food scandal’ where an estimated $300 million in kickbacks were paid to Iraq.

ASIC barrister Norman O’Bryan told the Victorian Supreme Court in 2015, during a civil trial, Geary had admitted concern AWB was exposed to the political risk of being “branded as a sanctions buster” by the UN.

The ASIC barrister told the court Geary was well aware the company was paying kickbacks to the Iraqi government between 1999 and during the US-led invasion of the country in 2003, disguised as trucking and after-sale service fees 

The securities watchdog has pursued the executives of AWB since 2007, after Australian Federal Police taskforce was sent to investigate matters arising from the Cole Inquiry, with ASIC contributing staff.

In August 2007, ASIC withdrew its staff from the taskforce and commenced a separate independent investigation. 

By the end of 2007 ASIC had commenced civil proceedings in the Supreme Court of Victoria against six former directors and officers of AWB including Geary. The following year the Court ordered a stay of ASIC’s proceedings against each of the defendants until such time as they were advised that no criminal proceedings would be instituted against them.

By the end of 2016 a judge dismissed the proceedings against Geary, finding that he did not contravene his duties in connection with AWB's supply of wheat to Iraq under the sanction agreement.

Other former executives implicated received penalties including fines and disqualifications from managing corporate entities. 

ASIC who released a statement announcing the move to return to court, declined to make any further comment on the matter, or in relation to ASIC's proceeding against Trevor Flugge, the former chairman of AWB. A court date is yet to be announced.

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