Tuesday, 28 March 2006
AWB Ltd: Shareholdings
New evidence has emerged concerning the extent of shareholdings in AWB by senior Liberal and National Party members. In 1996, soon after he came to office, then Deputy Prime Minister and Minister for Primary Industries, John Anderson, set in train the privatisation of the publicly owned AWB. The privatisation consisted of giving 67,500 grain-grower members of the Wheat Industry Fund A- and B-class shares. The A-class shares provided rights to vote for AWB directors. The B-class shares were floated on the stock market at a minimum of $3.15 each. The 67,500 WIF members were given about 242 million shares, or about 90 per cent of control of AWB. At the time of the float they gained over $760 million.
The former Deputy Prime Minister sold AWB B-class shares for a healthy profit just before the damning Volcker report became public. He failed to disclose on the register of interests that he had sold these shares. He still holds A-class shares and has not disclosed these on the register, even though a House of Representatives resolution of October 1984 requires disclosure of all shareholdings in public and private companies.
The National Party Minister for Community Services, the member for Parkes, Mr Cobb, and his wife have held two parcels of shares dating back to 1996 and still retain A-class voting shares. Mr Macfarlane, the Liberal Party MHR for Groom and Minister for Industry, Tourism and Resources, held shares in AWB but went off the share register in July 2002. He was President of the Queensland Grain Growers Association for seven years and President of the Grains Council of Australia for two years, and he simultaneously held executive positions on the Queensland Farmers Federation and the National Farmers Federation. Mr Wakelin, the Liberal MHR for Grey, currently holds 4,211 shares in AWB, according to Computershare records, and has held an unknown number of shares previously, along with at least three members of his immediate family.
Then there is Mr Scott, the National MHR for Maranoa, President of the Queensland National Party. His family company, Crochdantigh, is a trustee of his family trust. Crochdantigh has had AWB shares since the 1990s, which he has never disclosed. Mr Scott says income from the company is distributed to his wife and children, but this is no excuse. The parliamentary rules require such interests to be disclosed. Bill Heffernan, Liberal senator for New South Wales, is a beneficiary of the family trust WP Heffernan Nominees Pty Ltd. This trust owns AWB shares that Senator Heffernan had not disclosed. Senator Heffernan now admits he owns over $4,000 of AWB shares, which he failed to disclose to parliament.
At least six Howard government ministers and members of parliament have been buying and selling AWB shares at various times during the life of the Howard government. They had vested interests in AWB which were in conflict with their duty to protect Australia’s reputation for honesty and integrity in its trade deals. Their handling of this conflict of interest has been appalling. First, several of them failed to publicly disclose their shareholdings in an accurate and timely fashion. They had to be caught out. Second, there is no evidence that they ever declared their shareholdings in cabinet, the party room or parliamentary debates about AWB, or indeed that they have acted to remove themselves from decision making which concerned their vested interests. The former primary industries minister, Mr Anderson, carried out the float of the Wheat Board through the Wheat Marketing Amendment Bill. He was a direct beneficiary of these changes, but he and others paid no attention to proper disclosure of conflict of interest.
Third, given this extensive involvement in AWB by Liberal and National Party personnel, the Howard government’s dismissal of the numerous allegations that AWB was paying kickbacks and simple acceptance of the word of AWB management that the claims were unfounded become more understandable. Too many Howard government personnel did not want to hear anything bad about AWB because they had shares in the company. They only heard what they wanted to hear. The Howard government deliberately turned a blind eye and a deaf ear to the chorus of concern from home and abroad. Fourth, Minister Anderson sold his shares after warning bells were ringing throughout the government’s ranks but before the Cole inquiry was established and AWB’s share price fell. Was he guilty of insider trading? We will not know until he does what ministers Downer and Vaile ought also to do, which is to front up to the Cole inquiry and answer questions on oath about their personal knowledge of this scandal.