Michael Pascoe writes:
If there had been any doubt about the
future of AWB chairman Brendan Stewart, it was resolved yesterday when he
effectively stuck his hand up for execution and volunteered to take the rest of
his failed board with him.
While most of the pack continue to hunt the
the corporate death sentence was in Stewart’s extraordinary admissions to the
Cole inquiry about the board’s handling of the odious Tigris deal, whereby AWB
inflated the price of wheat sold to Iraq to recover an alleged $8 million
debt for a BHP associate – earning a half million dollar commission for its
The SMH reports the damning evidence. It seems Stewart wasn’t concerned about the
ethics of the thing, only whether AWB could further inflate wheat prices to
recover other debts. Furthermore, it
looks like Stewart had detailed discussions with at least four other directors
before taking the matter to the full board.
Counsel assisting the inquiry,
John Agius, SC, produced notes of the December 2004 board information session
taken by the company secretary, Richard Fuller.
The notes show that a board
member, Ian Donges, who now chairs AWB International, asked whether the Wheat
Export Authority should be informed of this unusual deal. Another board member,
Wayne Gibson, asked how the $US500,000 recovery fee would be explained in terms
of AWB’s accounts.
Notes taken by the AWB general
counsel Jim Cooper show a board member, John Thame, thought the “PR
risk” was high if news of the deal became public, and another board
member, John Simpson, said the agreement with Tigris “seems extraordinary”.
Asked if the board took any other
action, Mr Stewart said the deal was discussed at a board meeting the day after
the initial briefing in December 2004. But the issue was apparently
dropped because it was seen as an operational matter that concerned management,
rather than the board.
And that should be the corporate death
warrant for Stewart and Co. They knew it was dodgy, wondered what the WEA would
make of it, realised it would be a PR disaster if anyone found out – and then
washed their hands of the whole thing as if they really didn’t want to know.
Inflated prices and kickbacks? Hey, that’s
just operational, leave us out of it – we’re too busy drafting a motion to
increase directors’ fees.
Yesterday former AWB chairman Trevor Flugge
finally bowed to the inevitable and
“took leave” from his three public company directorships – although his amazingly thick hide is
on show by remaining chairman of Australian Wool Services, the farmer body that
owns the Woolmark Company.
Just on yesterday’s evidence, Stewart and
his fellow directors involved in that December 2004 board meeting should follow
P.S. Wool is not only losing market share
in a rising international textile market, it’s going backwards in absolute
terms – not exactly one of the great
marketing success stories. Maybe Trev should go back to rebuilding Iraq.