The Australian wheat industry has been rocked by revelations that its monopoly exporter paid kickbacks of about Au$300m (127m) to the Iraqi government.

Rumours that the money was paid by the Australian Wheat Board (AWB) were first raised by the UN in its report on companies that allegedly breached sanctions under the oil-for-food scheme.

A federal inquiry started in Sydney in January to investigate the claims.

Hearings have been told the AWB paid inflated trucking fees on shipments to Iraq to help deals succeed, with the money skimmed off for the Iraqi government.

Senior AWB staff have strenuously denied all knowledge, but in recent days former insiders have contradicted those denials.

Now the federal government is coming under pressure to reveal how much it knew about the dealings, and confidence in the AWB has plummeted.

Since the start of the inquiry shares have dipped a third, trading at Au$4.19 (1.77) at close of play on 7 February.

Most of the shareholders are growers.

The AWB was the first company to ship wheat to Iraq after the 1991 Gulf War and exported about 2m tonnes a year – worth about $800m – under the oil-for-food system.