March 20, 2013
The Australian Securities and Investments Commission has won its appeal in the Supreme Court of Australia to uphold a $40,000 fine and 15-month disqualification against former AWB chief financial officer Paul Ingleby – who had previously agreed to the penalty after admitting he failed to exercise his powers and discharge his duties as an officer with care and diligence in numerous ways between December 2001 and September 2004. In February 2006 an inquiry headed by Terence Cole, QC, began quizzing 11 AWB executives as it investigated whether the Australian wheat board paid nearly $300 million in kickbacks to former Iraqi dictator Saddam Hussein’s regime to secure contracts under the UN’s oil-for-food program. Evidence showed fees marked for inland transport were funnelled through Jordanian trucking company Alia. As reported by The Australian Financial Review at the time, Ingleby told the inquiry the fees were recorded as a tax expense of the wheat marketing arm, and had the capacity to be claimed as a tax deduction for the whole company because of tax consolidation laws. But the inquiry heard that the transport fees were only recognisable in the company’s profit and loss statement as a tax expense from October 1, 2003, after the UN oil-for-food program had ceased. In December 2007, ASIC commenced civil penalty proceedings in the Supreme Court of Victoria against six former directors and officers of AWB, including Ingleby. Following Ingleby’s court appearance on June 13, 2012, the former CFO admitted he failed to “join the dots” on more than €22 million in payments he authorised which supported Saddam Hussein’s Iraqi regime, and his lawyer said he was “contrite” over his part in the $US225 million Iraqi kickbacks scandal. Ingleby agreed to a deal with ASIC to pay a $40,000 fine and to be disqualified as an executive for 15 months. Then in August, the Supreme Court of Victoria delivered a ruling that Ingleby receive a lesser penalty. Justice Robson ordered that the former CFO only be disqualified from managing corporations until December 31, 2012 (approximately 4.5 months) and that he pay a pecuniary penalty of $10,000. ASIC immediately appealed that decision and on Tuesday the court ruled to uphold the original agreement, reinstating the $40,000 fine and 15-month ban on being an officer of a company. As reported by the AFR, Ingleby received a total remuneration package worth $964,506 upon his departure from AWB in 2007. Ingleby, in his early 60s was formerly a CFO at Elders and an accountant at KPMG.