Business Performance Post Cole Inquiry
In the years immediately following the Cole Inquiry, AWB continued to be dogged by bad performance. The company remains liable in several civil cases being completed, and has not always been successful in its attempts to find new markets.
Following the publication of the Cole Inquiry, a new management team was installed under the leadership of Gordon Davis who was recruited from Orica in August 2006. Mr. Davis successfully reformed the constitution and the shareholder structure to consolidate into 1 class of shareholder.
This new management team has not been entirely without controversy. On 26 April 2007, Yahoo News reported that AWB also breached US sanctions on Iran. These sanctions prohibit American citizens and companies using American currency from trading with Iran. In 2006, AWB’s US subsidiary (which trades using American currency) attempted to pay an Iranian transport company approximately $1 million dollars, in clear breach of the US sanctions.
In 2009, the company faced difficulties in another new market, when it was forced to recapitalise the balance sheet after the company produced significant losses from the expansion of trading activities into Brazil under Mr Davis.
Despite making a small profit in 2009, in March 2010, the company announced a profit downgrade from domestic trading activities. In May 2010, it reported a half-year loss of $64.8 million, which it claimed due to the cost of settling the shareholder class action for $39.5m, and a loss of $65.4m on restructuring costs associated with its sale of the Landmark Financial Services loan and deposit books.
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