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Leighton Holdings corruption cases hang around like a bad smell

Publication: 
Bryan Edwards
chiefofficersnet

In Australia and elsewhere, the multitude of actions relating to bribery and corruption at Leighton Holdings (see here ) continues in both the criminal and civil courts.

In 2017, Fairfax Media issued an apology to Wal King for saying, in 2013, that Wal King, who had been CEO until 2010, that he " knew of, and participated in, serious corporate misconduct involving bribery and corruption, including allegations that he knew about and in fact 'approved' the payment of a AUD42 million 'bribe' in Iraq." It said "We now accept that any such allegations against Mr King are false. We unreservedly withdraw the allegations and apologise to Mr King."

But action against others and against Group companies continue. This week, Peter Gregg (see the article referred to in this article's header) has been sentenced to " a total effective sentence of 2 years imprisonment, to be served by way of Intensive Correction Order (ICO)." An ICO is a combination sentence including a jail sentence part of which may be served by home imprisonment and/or other orders. Announcing the sentence, ASIC said "The payment instruction directed that USD$12.5 million be paid for the purpose of 'marketing and advisory' services and that USD$2.5 million be paid as a 'loan'. During the course of trial, the Crown alleged that the payment instruction was false because it did not describe the true purpose of the payment. At the Sentence Hearing it was submitted by the Crown that it was open for the Court to find that the true purpose of the payment was to secure the waiver of a financial obligation that one of LHL's subsidiary's had in connection with its business in India...The second count concerned a written agreement between LHL—executed by Mr Gregg on its behalf—and Asian Global in December 2011 (but backdated to August 2011) for the provision of steel procurement services by Asian Global. In ruling today, His Honour found that the agreement was signed 'in order to legitimise the payment of US$15million’. Additionally His Honour stated that ‘having regard to the offender’s motivation and intention, this was a serious contravention.'" Gregg has also been banned from managing corporations for five years. Technically, the court "indicated" the sentence it is minded to impose. Actual sentencing will take place on 29th August.

In the UK, in June 2016, the Serious Fraud Office began a prosecution against Unaoil Monaco SAM and Unaoil Ltd, indicating that prosecution was only part of a larger investigation. It followed charges against four individuals: "Paul Bond and Stephen Whiteley have both been charged with conspiracy to make corrupt payments to secure the award of contracts in Iraq to Unaoil’s client SBM Offshore. The charges relate to alleged corrupt conduct within Unaoil, between June 2005 and August 2011." "Basil Al Jarah and Ziad Akle have both been charged with conspiracy to give corrupt payments to secure the award of a contract worth US$733 million to Leighton Contractors Singapore PTE Ltd for a project to build two oil pipelines in southern Iraq."

An additional charge was laid in 2018 against Whiteley, that he "assisted Unaoil Limited to be engaged as a subcontractor for an oil pipeline project in Iraq. The alleged conduct took place between March 2009 and May 2010."

This month, "Basil Al Jarah, Unaoil’s former partner in Iraq, pleaded guilty on 15 July 2019 to five offences of conspiracy to give corrupt payments in connection with the SFO’s investigation into Unaoil." The trial of the other individuals is scheduled to start on 13 January 2013.

In March this year, CIMC, now owned and controlled from Spain, was reported to have entered into what was termed "an investigation agreement" over Leighton Holding's alleged bribery. Australian Federal Police, the national crime agency, has been investigating for years with no prosecutions against individuals; ASIC has been the sole instigator of such action.

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