Michael Pascoe writes:

The phrase “the late mail” is being
redefined as the Cole inquiry keeps unearthing DFAT cables spelling out the
dodgy nature of Iraq oil-for-food contracts. The tardiness of yesterday’s addition to
the bulging file – and most blatant warning yet – seems particularly fortunate for Lord Downer
by the looks of David Marr’s report:

The three ministers escaped
questions on its contents when they appeared before the inquiry two weeks ago,
but each has given supplementary statements in the past few days claiming not
to have read – or not to have recalled reading – the cable. In Mr Downer’s case
this was despite his then adviser Michael Smith opening the cable and emailing
it to the minister’s office. Mr Downer said: “Having regard to this
information, it may be that a hard copy of the cable was printed and
distributed to me.” But he said he was unaware of the “issues
raised”.

Somehow I already knew that. Maybe DFAT has
started using the same courier company Rio employs to renew mining leases.

Less predictable is the answer to a
question raised by a New Yorker forensic accounting student keeping an eye on
the Cole inquiry from afar about what happens if AWB Ltd is indicted and
convicted of criminal activity – a very real possibility.

“In the States, a criminal indictment of a corporation or business
is the kiss of death (a la Arthur Andersen),” writes the Harvard MBA who’s
doing a bit of post-grad swotting. “What would the ASX do? Or whomever you have as an
SEC? You do have securities law there don’t you? Any chance that the UN and/or new Iraqi
state could/should/might sue the AWB for recovery of all payments?” Cha-ching.

It is of course purely in the speculative
realm of what might happen to AWB if it should eventually be charged with and
convicted of a criminal offence, but yet another layer of legal pain would fall
on the shareholders presently hanging tough, perhaps threatening the very
existence of the company.

The actual penalties under the 1999 bribery
and skulduggery act aren’t much for a big company – just a miserable $65,000
fine. However, if a court looks at every shipment as an individual act and
multiplies that by $65K, it begins to add up. Cha-ching, cha-ching.

But that of itself still wouldn’t be the
main problem. It turns out that the ASX doesn’t have any listing rule about
corporations being criminals – hey, one man’s criminal is another’s
entrepreneurial hero – so there would be
no automatic suspension or penalty.

However, there are listing rules about
disclosure and an ASX with gonads could treat a criminally convicted company
very harshly on that score, unless it was more interested in just collecting listing
fees. In theory, a company committing crimes has a duty to disclose that to the
ASX if it is material. Already waiting for AWB is a little disclosure about
what it didn’t tell the market around the time it claimed it was warning Lord
Downer it was heading for trouble.

And what follows from a non-disclosure
problem is the inevitable class-action by investors who trusted the company. Cha-ching,
cha-ching, cha-ching.

It’s worth remembering that HIH, for
example, lost its ASX listing over non-disclosure, not for lying, cheating and ruining
countless lives. If AWB is suspended, the cha-chings would just keep coming.

Then there’s a matter of Federal Government
contracts. Canberra won’t do business with building companies that don’t play by its IR
rules, so how could the government possibly continue to grant wheat export monopoly
powers to a criminal company? With John Howard already condemning AWB as a
bunch of lairs, I don’t like the chances. Exit half of AWB’s reason for being.

What’s left? Enough to pay more executives for
“resigning” and the legal bills through all the mess? AWB’s lawyers will hope
so.