Courtesy of Corporate Risk & Assurance.
ASIC has taken the former CFO of an Australian organisation involved in the UN Oil-for-food programme (OFFP) in Iraq to court for breaching his legal duties, highlighting the corruption risks Aussie companies face when doing business overseas.
AWB’s former CFO, Paul Ingleby, has admitted to breaking UN rules while the company was supplying wheat to Iraq under the OFFP, namely the rule that no payments be made directly to the Iraq government when trading as part of the OFFP.
“The Supreme Court of Victoria today heard a Statement of Agreed Contravention about the conduct of Mr Paul John Ingleby, the former Chief Financial Officer of AWB, in which he acknowledges 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),” said an ASIC statement.
According to ASIC, Ingleby acknowledges 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.
A joint submission by both ASIC and Ingleby has suggested that he be fined $40,000 and disqualified from managing corporations for 15 months. ASIC’s proceedings against four other former officers of AWB are ongoing
