Shareholders in AWB have agreed to settle their class action against the agribusiness company, after seeking compensation for its failure to disclose Iraqi kickbacks.
As AWB was due to begin its defence in the the Federal Court in Sydney on Monday, John Sheahan, SC, a barrister acting for AWB shareholders, told the court the parties had reached an in principle agreement to settle.
"The settlement won't break down," Mr Sheahan told the court, which was adjourned until a time to be set later this week.
Outside the court, Ben Slade, a solicitor for the AWB shareholders told journalists the settlement figure was $39.5 million, including interest and costs.
Litigation funders IMF (Australia) Ltd said the conditional settlement was subject to court approval and documentation.
Class action lawsuit
Justice Foster began hearing the case last week after retired farmers and former AWB shareholders John and Kaye Watson filed the class action against AWB in April 2007.
Since then more than 1,000 other retail and institutional shareholders have joined.
They were claiming over $100 million in losses, as a result of a drop in AWB shares when the 2006 Cole inquiry investigated AWB's payment of more than $290 million to the Iraq's former Saddam Hussein regime between 1999 and 2003.
The payments were disguised as fees to Alia, a Jordanian company partly owned by the Iraqi Ministry of Transport, and were made in exchange for access to the country's lucrative wheat markets.
AWB shares lost about one third of their value in the month after the Cole inquiry began in January 2006.
'Deceptive' conduct claim
A key allegation against AWB was that the former monopoly wheat trader failed to meet continuous disclosure obligations imposed by the Corporations Act by not informing the market of the payments.
The applicants also alleged AWB engaged in misleading or deceptive conduct through its representations about the nature of its dealings with Iraq and the company's integrity during this time.
AWB has denied these allegations.
Last week it was revealed in submissions to the court ahead of the current trial that AWB admitted it made payments that it knew would go to the Iraqi government.
IMF said if the conditions of the settlement agreement were satisfied, it expected to earn a profit after costs and capitalised overheads of between $6 million and $7 million before tax.
