Michael Pascoe writes:

By any chance did you purchase AWB shares
after the company assured the world that it never suspected anything dodgy
about its Iraq contracts and had always been totally ridgy didge despite
suggestions to the contrary in the Volker report?

If you did, keep an eye out for the ads
that will be placed in the newspapers by ambulance chasers trying to get up a
shareholder class action against this discredited organisation.

See how power works in this country.

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It’s just one more problem facing AWB and its
board of stunned mullets – topping off yesterday’s farce of having to withdraw a
misleading statement made to the ASX.

AWB
will be a prime candidate for the type of class action being brought against
Aristocrat Leisure. If your share price falls after you’re caught misleading the
market, you’re a target. Whether there are grounds for shareholders
to sue over the enormous damage done to AWB’s reputation and business
prospects, well, I’ll leave that to the lawyers.

Should AWB lose its monopoly wheat export
right in the wake of this scandal (and it certainly should if the Federal
Government and Australia’s wheat farmers don’t want to be seen as condoning
such a corrupt organisation), then the management and board will have presided
over a massive destruction of shareholder value.

Part of AWB’s justification for maintaining
its “single desk” monopoly was that it enjoyed such a good reputation on
international markets – a quality brand that could earn a premium for growers. Not any more. Try “national embarrassment”
instead of “quality brand.”

AWB shares
opened with another 32 cent dive this morning at $5.45. By midday they had only
recovered slightly to $5.53. The market, reassured by the company’s statements,
had ignored the Volker report, pushing AWB shares as high as $6.40 last week.
Then the truth began to come out.

See how power works in this country.

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Peter Fray
Peter Fray
Editor-in-chief
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