Former AWB boss may face more action

The Australian Securities and Investments Commission has indicated that it may initiate more court proceedings against former AWB chief executive, Andrew Lindberg, over the payment by the wheat exporter of almost $300 million of secret kickbacks to Iraq.

As the corporate regulator this morning opened a case against Mr Lindberg in the Victorian Supreme Court, alleging that he breached his duties to AWB because he knew about the illicit payments and failed to halt them, the court heard that ASIC had emailed his lawyers on Friday and revealed it may begin a new court case.

Mr Lindberg's counsel David Collins SC told Justice Ross Robson that his legal team received an email from ASIC's lawyers after hours on Friday, which they read on Saturday.

He said ASIC's email appeared to clarify comments that ASIC's lawyers made in the Court of Appeal on October 9 when they referred to more possible proceedings against Mr Lindberg.

Mr Collins told Justice Robson that the email suggested ASIC would decide in about four weeks if it will go ahead with the additional case.

Asked by Justice Robson if he wanted to respond, ASIC's counsel Norman O'Bryan QC replied: "Not unless your honour requires me to, no."

It is not yet clear what the additional proceedings referred to in the email might involve, although in the current case Justice Robson has rejected ASIC's bid to include evidence about what Mr Lindberg knew about Project Rose or how he responded to the Volcker Inquiry, which was commissioned by the United Nations.

The judge has also declined ASIC's bid to argue that Mr Lindberg breached his fiduciary duties in relation to the so-called Tigris transaction in which AWB aided a former senior executive of BHP, Norman Davidson Kelly, to extract from Iraq a highly questionable "debt" of several million US dollars, apparently for Mr Davidson Kelly's own benefit.

Mr Lindberg, dressed in a dark charcoal suit, sat in the front row of the court next to his wife.

In his opening submissions, Mr O'Bryan has told the court that Mr Lindberg knew or ought to have known about the payments to Iraq and that by failing to halt them he brought the company into disrepute.

Mr O'Bryan claimed that the payments, disguised as "trucking fees" or "after-sales service fees" in invoices submitted to the UN oil-for-food program, amounted to about $US12 a tonne in 1999 and rose to more than $US55 a tonne.

Mr Lindberg presided over AWB from March 2000 until February 2006. Mr O'Bryan claimed "alarm bells were ringing" and "red flags were waving", and that a large number of people inside AWB knew about the payments.

He has told the court that ASIC will argue that Mr Lindberg ought to have known about the payments and had at his disposal the means to find out more about them.

The case continues.