April 12, 2006

Bank sues Australian wheat exporter AWB over failed soy deal

AWB is facing a $US35million lawsuit in the US after one of its key financial backers was left out of pocket following failed deals to sell soybeans to Indonesia.

The Standard Chartered Bank launched the civil action to recover US$35million from AWB USA after the deals fell through.

Lawyers for the bank argued that between Sep 2003 and Mar 2004, AWB agreed to sell 56,000 tonnes of US soybeans to three Indonesian companies -- PT Suba Indah, PT Kukuh Cipta Abadi and PT Gerbang Cahaya Utama.

The sales were partially guaranteed by a USDA programme that reduces financial risks to exporters by offering short-term credit to foreign buyers of US agricultural products.

The bank, which purchased the USDA credit guarantees from AWB, claims it was left out of pocket when the Indonesian companies defaulted on the contracts.

It claims that it was able to recoup only US$42.1 million from the USDA programme, instead of $US64.7million. AWB's lawyers have disputed the claims.