The civil case against the former boss of the Australian Wheat Board, Andrew Lindberg, has begun in Melbourne’s Supreme Court.
Mr Lindberg is defending allegations about his role in allowing the wheat exporter to pay almost $300 million in secret kickbacks to Iraq.
The Australian Securities and Investments Commission is outlining the civil case against Mr Lindberg.
The former managing director and board member of the Australian Wheat Board, Andrew Lindberg, was seated in the front row of the court as the Australian Securities and Investments Commission began outlining its case against him.
Mr Lindberg presided over AWB from March 2000 until February 2006.
In his opening address, ASIC’s Counsel, Norman O’Bryan, QC, alleged Mr Lindberg knew or ought to have known about payments to the Iraqi government, disguised as trucking fees or after-sales service fees in invoices submitted to the UN oil-for-food program.
Mr O’Bryan told Justice Ross Robson it was no skin off AWB’s nose paying the fees as it recouped the hard currency from the UN.
He said the facade operated continuously from 1999 to 2003.
At the time UN sanctions barred the payment of hard currency to Saddam Hussein’s regime. After the fall of Saddam Hussein, Mr O’Bryan said AWB was still paying the fees, fuelling the risk of discovery.
Mr O’Bryan said engaging in such conduct would expose AWB to very significant risk indeed, that would one day it would get caught, and that all hell would break loose in those countries who were AWB’s competitors in the international wheat trade.
He said that alarm bells were ringing and red flags were waving and that many senior people within AWB, including Mr Lindberg, knew about the sham fees.
Norman O’Bryan, QC, for ASIC told the court at the heart of the matter is that Mr Lindberg breached his most fundamental duty as CEO – which was to guard against harm to AWB.
Mr O’Bryan says when the fraud was exposed, AWB’s share price collapsed and the company has never recovered commercially. It’s expected Mr Lindberg’s defence team will argue he didn’t know about the payments.
ASIC is due to call about 30 witnesses to prove its allegations against Mr Lindberg. Mr Lindberg’s defence is likely to start in the New Year.