HI6027 -The Provisions of Governing Commonwealth Act

(College Name: )

ASIC V LINDERBERG 2
Contents
Introduction......................................................................................................................................3
Discussion of the Case.....................................................................................................................3
Duties/ Responsibilities Breached...................................................................................................5
Court’s Decision..............................................................................................................................7
Conclusion.......................................................................................................................................8
References......................................................................................................................................10

ASIC V LINDERBERG 3
Introduction
A landmark penalty judgment was handed by the Supreme Court Judge of Victoria, Robson J, on
09th Aug, 2012 when the Australian Securities and Investments Commission, herein referred to
as ASIC, initiated legal proceedings against Andrew Lindberg, herein referred to as Lindberg.
The matter was initiated as Lindberg was the previous managing director of the company AWB
Limited and the ASIC had made a claim that Lindberg had not fulfilled the duties contained in
the Corporations Act, 2001. The full citation of the case was ASIC v Lindberg [2012] VSC 332,
where the penalty judgment was given by the court after the decision was attained to settle down
the proceedings (Jade, 2017). Due to the breaching the provisions of governing commonwealth
act, the judgment restated the pecuniary penalties and the disqualification order imposition
(Jacobson, 2012a).
The discussion which has been carried in the ensuing parts cover the facts of this case, along
with the duties which were breached and finally the decision given in this matter has been
covered, before concluding the entire discussion.
Discussion of the Case
ASIC v Lindberg was a highly publicized case where the allegations were laid against the
violations which were undertaken by the company AWB. These were carried for the resolutions
of United Nations, herein referred to as UN, which were undertaken with Iraq. The resolution
called on the UN’s member states, herein referred to as UNMS, for preventing the sale of any
kind of commodity to Iraq and this had some exceptions, drawn from humanitarian basis and the

ASIC V LINDERBERG 4
exception included food material. An attempt was made through this resolution to deny the hard
currency to the regime of Iraq. Oil for Food Program, herein referred to as OFP, had the
responsibility of undertaking the sanction which led to the proceeds from the sale of petroleum
products of Iraq being placed under the UN’s escrow account. The release of funds from this
account was only allowed for the commodities which were permitted, including the food
material. AWB was a huge supplier of wheat to Iraq as per the OFP (Austlii, 2017a).
There were two key matters on the basis of which the violation of the UN resolution had been
claimed. The first and the foremost one was related to the 10% payment made as being the
trucking fee which was related to the contracts of wheat undertaken with Alia. Alia was an
intermediary company which was passing on this fee to the Iraqi government and so, the hard
currency was obtained by the government. This was in addition to the fact that the payment
being received by AWB was designed in a manner so as to reimburse such payments. Hence,
through this entire transaction, the money held in the UN escrow account was being made use for
such purposes which were restricted under it (Austin and Reynolds, 2012).
The other violation claimed was regarding the contract undertaken between the company, i.e.,
AWB and Tigris. Tigris was a third party and the purpose of this contract was the recovery of
outstanding $8 million which was related to the shipment of wheat to Iraq. AWB had inflated the
prices of wheat under OFP contracts. This again hampered the purpose of the UN resolution as
the money from the escrow account was being used for the purpose different from payment for
permitted commodities. These contracts had the valid approval of UN; though, this approval was
taken without the UN being given the knowledge regarding the purpose or the increase in the
prices. The contract of Tigris and AWB had been portrayed wrongly as debt payment recovery
by AWB to Tigris as being the service fee, and the commission payment by Tigris to AWB as