Goodness, it’s quite a week for Australian corruption allegations. Now it is Leighton in the gun. From the SMH:
Corruption and cover-ups in Leighton Holdings’ international construction empire were rife and known to top company executives and directors, according to internal company files.
Those in the know included the Australian construction giant’s chief executive at the time, Wal King, and his short-term successor David Stewart.
In revelations that will cause international embarrassment for Australia and raise questions about the role of the nation’s corporate watchdog, the files expose plans to pay alleged multimillion-dollar kickbacks in Iraq, Indonesia, Malaysia and elsewhere, along with other serious corporate misconduct.
Hundreds of confidential company documents, obtained during a six-month Fairfax Media investigation, also reveal a culture of rewarding corruption or incompetence, and abysmal corporate governance in what looms as the worst recent case of corporate corruption involving a major Australian firm.
Mr King, one of Australia’s most highly regarded chief executives and who has reportedly been approached by Communications Minister Malcolm Turnbull about taking an NBN Co board seat, was chief executive of Leighton Holdings for 23 years and is a prominent Sydney business community figure.
ASIC has spoken to no witnesses or suspects, despite witnesses telling federal police they had grave concerns about corporate offences in the company.
Key Leighton witnesses and whistleblowers, including former top Leighton executive Stephen Sasse, told Fairfax Media on Wednesday that ASIC and the federal police appeared unable to adequately respond to the breadth of issues engulfing Leighton.
”I would be surprised if the federal police or ASIC have the expertise or technical knowledge to undertake investigations of this nature,” Mr Sasse said. ”I suspect that the lack of urgency stems from resourcing issues rather than any lack of purpose.”
…Another source familiar with the Australian Federal Police investigation revealed that AFP agents privately complained about inadequate resources to conduct a proper probe.
ASIC – which failed to respond to inquiries from Fairfax Media – is already under pressure for failing to investigate alleged corporate law breaches linked to the Reserve Bank bribery scandal. ASIC referred questions about Leighton to the federal police, which stressed it was treating the Leighton case as a ”priority”.
”We are working to ensure that all alleged criminal activity is uncovered,” Commander Ian McCartney said.
I’m no wowser on these matters. There are jurisdictions where greasing the wheels is a part of doing business. But there are ways of doing it that bring probity and if not then just don’t do it. If you’re only competitive advantage is a lack of ethics then the value created is always fictitious.
As for ASIC, the Government is going to have to do something or be sucked into this boys club of bad behaviour. It also has an obligation to protect the authority to act which has been white-anted by the RBA. Not to mention the law.
