MEDIA RELEASE - 16 April 2007
AWB TO BE SERVED WITH MULTI-MILLION DOLLAR SHAREHOLDER CLASS ACTION ON TUESDAY
Leading shareholder class action law firm Maurice Blackburn will file a multi-million dollar shareholder class action on Tuesday 17 April 2007 in the Sydney Registry of the Federal Court of Australia against AWB Limited.
The shareholder claim follows the massive collapse in the share price of AWB Limited when the truth about the company's dealings with Iraq were revealed in the early days of the Cole Commission of Inquiry into the Oil-For-Food Program.
Ben Slade, the NSW Principal of Maurice Blackburn said it was clear that shareholders who purchased shares in AWB had been the victims of AWB's failure to disclose information that might have affected the share price.
"The law requires that a public company continuously keep us informed of facts that may have a material impact on the market price of its shares. AWB made deals with Saddam Hussein's regime that breached UN sanctions. The deals secured wheat sales to Iraq by AWB conspiring with the Iraqi Grains Board to improperly obtain funds from the UN Escrow Account. AWB concealed these deals not only from the Department of Foreign Affairs and Trade and the United Nations but also the share market.
"AWB's failure to disclose is a breach of the continuous disclosure requirements imposed on Australian companies under the Corporations Act. AWB shareholders who had not sold their shares before the commencement of the Cole Inquiry on 16 January 2006 have, inevitably, suffered loss because of the company's failure to disclose. As a result of this class action, those shareholders can now claim damages," said Mr Slade.
The claim seeks compensation for those represented in the action of the difference between the amount that they paid for their shares and the amount that they would have paid had the true value of the shares been charged at the date of purchase. Alternatively, the claim is for the difference between the price they paid for their shares and the price for which they sold their shares after the Cole Inquiry commenced. The claim also seeks damages for the value of the opportunity lost by the AWB investment.
John and Kaye Watson, retired wheat farmers from southern NSW, have brought the representative proceeding because they are angry at AWB's apparent blatant disregard for its obligations under the Corporations Act.
"The Cole Report makes it clear that AWB has failed shareholders terribly by ignoring its legal obligation to keep its shareholders informed.
"This deception has cost us, and many other small and large investors who placed their trust in them, substantial amounts of money. I want to be compensated for my loss but most of all I want AWB to be held accountable for their actions and for other public companies to understand that failure to keep shareholders informed will bring consequences, Mr Watson said.
The Watson's are also claiming on behalf of all those persons who bought shares between 11 March 2002 (when the continuous disclosure regime commented) and 13 January 2006 (the Friday before the Cole Inquiry began) and who were still holding those shares before the first day of the Cole Inquiry. The class is restricted to those who have entered into a funding agreement with IMF (Australia) Limited.
Since the commencement of the Royal Commission of Inquiry into AWB's conduct under the UN's Oil for Food Program on 16 January 2006, the share price of AWB Ltd. has fallen nearly 42% from $6.40 on 12 January 2006 to $3.70 as at 13 April 2007
Maurice Blackburn represents the interests of
shareholders who have suffered financially because of illegal or dishonest
conduct by public companies. The firm has run or is conducting class
actions on behalf of shareholders and investors in a number of cases, including
a $97 million settlement against GIO and claims against Aristocrat Limited and
Multiplex Limited, both of which are worth many millions of dollars for the
aggrieved shareholders.
Media inquiries: Scott Parker at Maurice Blackburn on 0432 828 003
