MELBOURNE, Oct 3: eighton Holdings, Australia’s biggest builder, came under fire on Thursday from media reports saying corruption and bribery were widespread at the company under previous management, sending its shares down as much as 10 percent.
The allegations hit just as Leighton, controlled by Spain’s ACS, has been emerging from a rough patch due to hefty losses on two major projects and faces challenges recouping payments from clients and a downturn in new mine construction.
Citing internal company memos, Fairfax media reported that Leighton senior executives knew about plans to pay alleged multimillion-dollar kickbacks in Iraq, Indonesia and Malaysia.
In a near three-page statement to the Australian Securities Exchange made in response to the media reports, Leighton said it was not aware of any new allegations or instances of ethics breaches beyond already disclosed bribery cases in Iraq and Indonesia.
Australian federal police are already investigating potential corruption relating to Iraq contracts, after Leighton voluntarily reported a possible ethics breach in 2011.
The company also said on Thursday it had sacked a senior executive last year and has gone to court seeking to recover A$5.6 million from a former employee for alleged breaches of contractual duties tied to the construction of a barge in Indonesia for a Leighton unit.
It declined to comment further on the Iraq and Indonesia breaches as they are under investigation or in court.
Nowhere in its statement did Leighton deny wrongdoing, but it said the Iraq and Indonesia cases were ‘exceptional instances’.
Shares in Leighton, majority owned by Germany’s Hochtief AG , which is in turn controlled by ACS, slumped to a one-month low of A$17.53 and last traded down 8 percent at A$17.95.
($1 = 1.0675 Australian dollars)
(agencies)
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