Senate probes former AWI board

28 May, 2003 10:00 PM
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CLAIMS that millions of dollars of grower and taxpayer funds were mis-managed by the former board of Australian Wool Innovation are under investigation by the Senate Rural and Regional Affairs and Transport Estimates committee.

Federal Government officials were quizzed in Canberra on Tuesday about the activities of the previous board, including claims it spent $20 million worth of grower and taxpayer funds without proper contracts.

Labor Senator Kerry O'Brien said millions of dollars may be at risk because of the Federal Government's failure to monitor the operations of Australian Wool Innovation under its former board.

Senator O'Brien said the inquiry heard on Tuesday that:

pThe former AWI board had entered into 50 research and marketing projects worth $20 million without formal or proper contracts;

pThe former AWI board used $250,000 of grower funds to fund it's own re-election campaign in October 2002 last year, which it subsequently lost. The inquiry will investigate whether this expenditure complied with the company's obligations to the Commonwealth; and

pThe former AWI board was alleged to have pre-paid 12 months worth of directors' fees in June last year to the former directors of AWI.

"Labor is concerned that (Federal Agriculture Minister) Warren Truss has not properly monitored the operations of AWI to ensure compliance with the statutory funding agreement between the Commonwealth and the company," Senator O'Brien said.

AWI received $56 million in direct levy funding from growers last financial year, and a further $14m in Federal Government contributions.

AWI's woolgrower shareholders voted last October to replace all but one non-executive director of the previous AWI board, including chair Maree McCaskill, with a team of five candidates headed by former Defence minister Ian McLachlan. Former managing director Col Dorber also left the company earlier this year.

Senator O'Brien said the proposed inquiry would provide Federal Parliament with an opportunity to address woolgrower and taxpayer concerns about the acquittal of their funds, and examine broader issues related to the accountability of industry service bodies in receipt of statutory levy and tax revenue.

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