AWB Sued

AWB Ltd, the Australian wheat exported implicated in the oil for food kickback scandal, is facing lawsuits in both Australia and the USA.

Lawyers in both Sydney and New York have lodged claims for a combined $125M.

Retired farmers John and Kaye Watson are the lead plaintiffs in a class action lodged on behalf of AWB shareholders in Sydney's Federal Court.

Mr Watson owned 10,000 AWB shares, which were once worth more than $6 each. The share price halved during the Cole inquiry into the Iraq kickback scandal, which found that AWB had been channeling money to Saddam Hussein's regime in the build up to the Iraq war.

Mr Watson says he lost around $10,000 of his investment in AWB.

Mr Watson said:

"The evidence suggests they were corrupt, full-stop. They were supposed to keep the market informed but they misled the government and the shareholders."

The US law firm of Cohen, Milstein, Hausfeld and Toll filed a class action lawsuit on behalf of American wheat farmers in federal district court in New York.

The suit seeks up to $100 million in damages from AWB Ltd and its US subsidiary, AWB (USA) Ltd.

US farmers claim they were "stuck with an oversupply of wheat" between 1999 and 2003, because Iraq dealt only with AWB Ltd.

The suit invokes the RICO racketeering law, it says AWB "paid bribes to the Iraqi government" to "exploit a monopoly on wheat sold into Iraq."

Partner Benjamin Brown said:

"AWB knew that, by paying these bribes, it would profit at the direct expense of American farmers -- its only real competition in the Iraqi market.

Unfortunately, AWB achieved its monopoly in the Iraqi market not through fair competition, but by deceiving the United Nations into unwittingly funding Hussein's corrupt regime."

What goes around, comes around.