Kelvin Thomson (Wills, Australian Labor Party, Shadow Minister for Public Accountability and Human Services) Share this | Link to this | Hansard source

Why has neither ASIC nor the Australian Wheat Board acted to disqualify Clinton Starr as a director from Australian Wheat Board International? Mr Starr is a non-executive director on AWBI who was elected on 4 November 1998 and re-elected on 14 March 2002 and again on 10 March 2005.

On 22 March last year—a year ago—Mr Starr pleaded guilty to 25 charges of failing to notify the Australian Stock Exchange of changes in his shareholding of the listed company Multiemedia, of which he was a director at the time. Mr Starr sold 28,750,000 and bought 10,052,089 shares in Multiemedia between December 2002 and 2003. As a director and substantial shareholder, he was required to notify the ASX of the sales and acquisitions within 14 days and of changes in his substantial shareholding within two days. Mr Starr was fined $7,500 and ordered to pay costs of $6,052 in the Melbourne Magistrates Court.

At the time, in March last year, the Deputy Executive Director of Enforcement of the Australian Securities and Investments Commission, Mark Steward, said investors had a genuine interest in trading by company directors. He said:

Information about a director’s holdings must be up-to-date and when these holdings change, investors must be able to understand the nature of the change. ASIC will prosecute directors who flout their obligations.

This is quite correct but, given the sums of money that can be involved in such deals, one has to wonder whether the penalty was adequate. Mr Starr had pleaded guilty to 22 charges of failing to notify the ASX within 14 days of any change in his interests in Multiemedia Ltd and three charges of failing to notify within two business days of the changes in his substantial holdings of Multiemedia securities. The maximum penalty under section 205G of the Corporations Act 2001 for these offences is 10 penalty points, three months imprisonment or both. Furthermore, under section 206E of the act, ASIC may apply to the court to disqualify a person who has contravened the act at least twice. The court may disqualify if satisfied that it is justified in so doing. No such application appears to have been made in respect of Mr Starr.

I believe that these offences should have constituted a warning to the other directors of AWBI and to the Australian Securities and Investments Commission. The fact that there was no other punishment of Mr Starr, other than the quite modest fines handed out by the court, means that the signals we send out about corporate law are that we are not very serious about it.

Indeed, we have seen a series of incidents which suggest the Howard government has very low standards, if indeed it has any standards at all: its appointment of the senior Liberal Party figure, Rob Gerard, to the board of the Reserve Bank, despite his tax avoidance issues; the government’s awarding of lucrative advertising contracts to the Liberal Party’s own advertiser, Ted Horton; its failure to investigate allegations of tax avoidance through the use of offshore tax havens; and the cowboy culture at AWB, in which bribes, kickbacks and cover-ups have been the order of the day. AWB’s CEO, Mr Lindberg, has gone, but the directors have not yet accepted responsibility for their role in this debacle. I believe that ASIC should start with Mr Starr.