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ASIC stumbles again -

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ELEANOR HALL: To the Victorian Supreme Court where Australia's corporate regulator has been dealt
another blow in its attempt to prosecute alleged corporate offenders.

The Australian Securities and Investments Commission was attempting to take court action against
the former managing director of AWB, Andrew Lindberg, over a second offence related to the Iraq
kickbacks affair.

ASIC is already prosecuting Mr Lindberg alleging for breached his duty as a director over the
kickbacks the wheat exporter paid to Saddam Hussein's regime.

But it had also been seeking to run a case against him on the more serious charge that he failed to
tell the AWB board about the bribes.

Today, though, the Victorian Supreme Court ruled that the second case was an abuse of process.

The setback comes only weeks after ASIC lost a case against Jodee Rich, the founder of the
collapsed OneTel phone company.

Lexi Metherell has been following today's proceedings and joins us now.

Lexi, where does ASIC's case against Andrew Lindberg stand now?

LEXI METHERELL: Well Eleanor, as we know AWB paid more than $200 million in fees to Saddam
Hussein's regime over around four years as part of its wheat contract with the administration and
that was in contravention of UN sanctions.

Now, ASIC has taken the wheat exporter's former managing director Andrew Lindberg to trial, arguing
that by 2001 he knew or should have known that the fees paid to the regime purportedly for
transport costs were actually bribes.

But two weeks after that first lot of proceedings started, ASIC launched a second case and they had
more serious allegations, including that he failed to tell the board about a UN inquiry into the
fees.

Mr Lindberg's lawyers objected to that second case, they argued that it was an abuse of process and
today the Victorian Supreme Court has agreed with the defence counsel. It's put a permanent stay on
those proceedings, it's halted those proceedings but the proceedings on the first set of
allegations still continue.

ELEANOR HALL: So what did the court say about why it decided that this second set of allegations
were an abuse of process?

LEXI METHERELL: Well in handing down his decision today, Justice Ross Robson said that the second
case contained matters that he had already refused ASIC leave to include in its first lot of
proceedings. So he didn't want the watchdog to try to pursue those matters through another set of
proceedings.

So he has halted those proceedings, that second lot, because he said they would have been an abuse
of legal process but he also said that it wasn't an intentional abuse process by ASIC.

ROSS ROBSON: I find that Mr Lindberg will be unjustifiably vexed and oppressed and manifestly
denied a fair trial by the existence of the second, of the pending second proceeding.

I also find that the second proceeding brings the administration of justice into this repute in the
minds of right thinking people. I should add that this finding is based on the effect of the second
proceeding. I do not find that ASIC intentionally sought to abuse the process of the court.

ELEANOR HALL: That's Justice Ross Robson.

Lexi this is a second setback for ASIC and effectively the judge is criticising ASIC. Are ASIC
directors saying anything about this today?

LEXI METHERELL: Well ASIC so far hasn't responded to this ruling against it. A spokeswoman said it
would be premature with the first set of proceedings against Mr Lindberg still continuing.

But you're right it is another setback for the watchdog. Only weeks ago it lost its bid to fine
Jodee Rich, who's the founder of the communications company OneTel which collapsed in 2001, and ban
him from managing corporations.

And there are questions as to how ASIC has handled this case against Andrew Lindberg. The watchdog
has been criticised a number of times during the proceedings by the judge.

He said at one stage that he'd been misled by an affidavit from a senior ASIC official. And earlier
I spoke to Professor Ian Ramsay who's the director of corporate law at Melbourne University.

IAN RAMSAY: Well I think that the judgment today is certainly a setback for ASIC. We should
remember, however, that on this complex matter, the AWA proceedings, certain matters have already
been appealed to the court of appeal. It might be that ASIC chooses to appeal today's judgement.

LEXI METHERELL: What do you think it could've done better to ensure that these second proceeding
weren't an abuse of process as this judge says they were?

IAN RAMSAY: Well certainly what the judge says is that he has really, in a sense, thrown out this
second claim of ASIC for a number of reasons. One of those reasons goes to overlap but another
reason is what he calls double jeopardy, that there's the potential of Mr Lindberg being punished
twice.

But in addition he also says that he believed that ASIC had the information to bring these
proceedings at an earlier time. They had the relevant information, they should've made a decision
earlier than once the first proceedings had commenced.

ELEANOR HALL: That's professor Ian Ramsay speaking to our reporter Lexi Metherell who was bringing
us up to date on proceedings at the Victorian Supreme Court this morning.