By Michael Bachelard and Nick McKenzie
- Top director spurned whistleblower as scandal grows
- How one 'fixer' earned $2.2b over 20 years from Thiess
Is there an entrenched culture of corruption and cover-up in the company formerly known as Leighton Holdings?
This top 100 listed company has responded to earlier corruption allegations by changing its name and its management – since 2015 it's been CIMIC Group, and its senior executives are Spanish imports – but it has seemingly failed to change its ways.
Theirs is a long and sorry history.
In 2013, Fairfax Media revealed concerns by the company's acting chief executive David Stewart that payments made by his own executives in Iraq may have been corrupt. The other company at the centre of that allegation was Unaoil, which has since featured in a Fairfax Media expose about its global activities.
Under investigation over a deal made during his time at Leighton in 2011: Peter Gregg.Credit: Daniel Munoz
Those stories told of widespread corruption within the senior executive ranks of Leighton's offshore arm. Between 2010 and 2011, two Leighton Offshore bosses, Russell Waugh and Peter Cox knew or commissioned varying amounts of wrongdoing from Unaoil, involving huge payments to officials within Iraq. With their boss, David Savage, they then laundered $5.6 million through an Indian company to pay bribes of their own, backdating invoices to cover themselves.
Next came Peter Gregg, who is now the chief executive of Primary Health Care, but who has come under investigation over a deal from his time at Leighton in 2011.
In that deal, the company allegedly paid $15 million, apparently for a guaranteed supply of steel, to the same money laundering company in India that was used to launder the Iraq money. No steel was ever delivered, but the $15 million removed a separate business impediment the company was facing in India. Mr Gregg has denied all wrongdoing and has threatened to sue.
And now we find out that to win an even bigger tender – a $6.8 billion coal deal – an executive of Thiess (a Leighton subsidiary) hired, without due diligence, an Indian chancer called Syam Reddy, who spoke volubly and on several occasions to Thiess managers about paying $16 million in bribes to Indian officials so that the company would win the contract.
At the same time as Reddy was talking about it, then Thiess CEO Bruce Munro was extending his contract, and extending it again.
In 2012, someone in Leighton had the presence of mind to order an internal inquiry, which was damning. That inquiry was then buried; the person who later blew the whistle on it was sacked; the board, including the chair of the ethics committee, appears not to have acted; and the Indian chancer (by then in dispute with Thiess) was eventually paid $1.3 million to go away.
Much of this happened under the Australian management and the Leighton brand name, but part of the response was undertaken by the current CIMIC board.
Incidentally, without Fairfax Media, none of this would ever have been made public, and every time without fail that Fairfax seeks a response from CIMIC, we get a firm: "No comment".
Does this speak of a culture of corruption and cover up in CIMIC/Leighton that has been entrenched for years? You be the judge.