Former Leighton Holdings’ chief executive Wal King has denied claims he was aware of bribery and fraud allegations made against the building giant

Leighton denies culture of corruption and cover-ups

October 3, 2013 – 11:16AM

Bribery scandal engulfs Leighton Holdings


Leighton Holdings is once again facing scrutiny over its business practices following the release of internal documents. Former Leighton Holdings’ chief executive Wal King has denied claims he was aware of bribery and fraud allegations made against the building giant. Mr King’s comments came as Leighton Holdings said it was “deeply concerned” about bribery and fraud allegations made against the firm, but denied it had a culture of corruption and cover-ups.A Fairfax Media investigation published today said hundreds of confidential company documents revealed that top executives, including the highly respected Mr King, knew about the corruption claims.The allegations include the payments of kickbacks in Iraq, Indonesia, Malaysia and other countries, as well as other serious corporate misconduct.

Mr King said today he had no prior knowledge of any wrongdoing at the company and that he had not been contacted by the police, Bloomberg reported.

The claims have seen Leighton Holdings hit hard in early trade this morning, with shares falling by $1.75 to $17.83, a drop of 8.9 per cent.

Leighton said in a lengthy ASX statement this morning it had voluntarily reported to the Australian Federal Police in 2011 a possible breach of its code of ethics after accusations of bribery payments in Iraq.

The construction firm stressed that it was continuing to work with the AFP over the investigation, and was “not aware of any new allegations or instances of breach of our ethics”.

Leighton added that fraud allegations in relation to a barge construction in Indonesia were internally investigated and resulted in the company taking a former employee to the NSW Supreme Court to recover $5.6 million. Leighton added that the case was still before the court.

Leighton said its board acted in the best interests of its companies and its board members were “aware of their responsibilities and have at all times executed their duties with the appropriate care and diligence”.

The contractor said that since it discovered a possible breach to its code of ethics in 2011, it initiated an internal review which led to the sacking of a senior executive the following year, an overhaul of its management structure and improved corporate governance and risk management processes.

The Fairfax Media investigation also revealed that the corporate watchdog, the Australian Securities and Investments Commission, appeared to have failed to conduct rigorous investigations into the allegations Leighton alerted the AFP about in 2011.

Shares in Germany’s largest construction company, Hochtief, which owns 56 per cent of Leighton, fell 7.9 per cent in trading following the report.

Hochtief experienced its biggest fall in almost two years, dropping 5.15 euro to 60.20 euro in Frankfurt trading.

Shares in Hochtief, which is controlled by Spain’s Actividades de Construccion & Servicios SA, have soared 37 per cent this year.

Hochtief’s spokesman Christian Gerhardus declined to comment, Bloomberg reported.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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