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AWB payouts spark outrage -

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AWB payouts spark outrage

Reporter: Greg Hoy

ALI MOORE: There was a strong backlash today to the announcement the beleaguered wheat exporter had
paid a total of $4.6 million to executives who resigned following the Cole Commission of Inquiry
into the illegal dealings with Iraq. Wheat growers and other large shareholders are outraged those
singled out for criticism by Commissioner Terence Cole, including four facing the possibility of
criminal charges, have been given sizable termination payments. The Grains Council of Australia has
described the payouts as scandalous, with shareholders suggesting the AWB has defied a recent
promise to change the way it does business. Greg Hoy reports.

GREG HOY: Just two months ago, following Commissioner Cole's curt condemnation of the then monopoly
wheat exporter's modus operandi in Iraq, the AWB board pleaded for forgiveness and pledged to
reform, as it share price fell.

BRENDAN STEWART, CHAIRMAN, AWB: The board deeply regrets the damage done to the company. The board
accepts accountability for the actions of management and the culture at AWB during the oil-for-food
program. At the end of the day, the board ultimately accepts responsibility for what happened, and
is committed to making significant changes to ensure that it never happens again.

GREG HOY: But yesterday, with the release of its latest annual report, it was revealed that
executives paraded before Commissioner Cole and who resigned in disgrace soon after were paid a
total of $4.6 million in benefits, triggering outrage by grain growers and large shareholders,
who've launched a class action seeking damages from AWB.

BEN SLADE, CLASS ACTION LAWYER: The company in its annual report has said that it's improving its
corporate culture and accountability and yet at the same time it clearly has opted for the most
obscene payouts to its management team who are responsible for not only incredible losses for the
shareholders, but also damaging Australia's reputation.

PENNY WONG, OPPOSITION CORPORATE GOVERNANCE SPOKESWOMAN: Well, the AWB appears to live in a
different moral universe where outraging and unethical behaviour is rewarded with big pay packets.
These executives have damaged the company and its share price. They've damaged Australia's
international trading reputation. They've done deals with a regime so bad we went to war with it
and now they're being rewarded with a golden handshake, and it's the people who are worst affected
by their actions AWB shareholders, and wheat growers who will be footing the bill for these golden
handshakes.

GREG HOY: Amongst the golden handshakers, former managing director Andrew Lindberg, under whose
watch the $294 million kickback scandal unfolded, was paid out $3.2 million. Former chief financial
officer Paul Ingleby, who it was recommended face fraud related charges, was given $964,500.
Charles Stott, former international sales manager said by Commissioner Cole to have known of monies
being funneled to Saddam Hussein's regime and the allegedly fraudulent Tigris transaction, was paid
a total of $1.36 million in salary and retirement benefits.

BEN SLADE: AWB should have been taking disciplinary action against its management team who were
involved in the widespread breaches of UN sanctions and lying to the marketplace. They haven't done
that. They've taken the easy option, and the payout is a much easier option than disciplinary
proceedings, yet who suffers? The shareholders and yet again, the Australian people.

PENNY WONG: These payouts are not only inappropriate, they are exorbitant and they fly in the face
of the principle that pay should reward performance.

GREG HOY: There were more payouts. Federal Agriculture Minister Peter McGauran joined the critics'
chorus, describing the payments as excessive. In its defence, AWB issued this statement to the 7.30
Report: "AWB met its legal obligations, and departing executives were payed what they were owed in
terms of their contracts. It's important to note none of the former executives has been charged
with any offence."

PENNY WONG: The AWB board again needs to explain to the Australian public and to its shareholders
how these payouts conform to the principle that pay is for performance. They need to explain how
such unethical behaviour can be rewarded so richly and they should be coming clean with the
Australian public and its shareholders on those issues.

GREG HOY: So, despite some bad publicity, the festive season wasn't all bad for the accused. The
Government ruled that the $294 million AWB paid out in kickbacks to Saddam Hussein's regime be
allowed as a tax deduction, to which $4.6 million in golden handshakes pales by comparison. Though
shareholders don't care.

BEN SLADE: The shareholders are all saying that they are appalled by the conduct of the company.
They were shareholders that have a right under the Corporations Act to assume that the company is
acting in their best interests, that it is disclosing continuously material facts to the
marketplace and they were lied to. They were positively lied to on occasions and on other
occasions, these breachings of UN sanctions is going on and on and on, and yet never were they told
that was the case. When they found out, the share price plummeted and they have lost a lot of money
in the process.

GREG HOY: Now comes the hard part, as the Federal task force continues to explore the pressing of
criminal charges, as the Government appointed committee explores who should control Australian
wheat exports in the future and as shareholders ramp up their class action over losses.

ALI MOORE: That report from Greg Hoy.

(c) 2007 ABC