Australian construction giant Leighton Holdings, which operates in more than 20 countries, said today it was "deeply concerned" by allegations of bribery and widespread corruption within the company.
A six-month investigation by Fairfax Media, which obtained hundreds of confidential company documents, exposed what it said were "plans to pay alleged multi-million dollar kickbacks in Iraq, Indonesia, Malaysia and elsewhere, along with other serious corporate misconduct".
In one case, it alleged, former chief executive Wal King approved a USD 39 million bribe to a firm in Monaco nominated by Iraqi officials who gave Leighton an 750 million Australian dollars oil pipeline contract.
Fairfax cited a memo written on November 23, 2010 by then-acting chief executive David Stewart, in which Leighton International managing director David Savage had revealed he and King knew of the massive kickback.
"I asked did Wal K approve this? And he said 'yes'," the memo reportedly said.
King, who was the company's chief executive for 23 years before retiring in late 2010, refuted the allegations.
"Well, I deny the allegations that I had any prior knowledge of circumstances in Iraq. I've never visited Iraq," he told ABC radio, adding that he could not comment further because he was bound by confidentiality agreements with Leighton.
Leighton is a USD 7 billion company active around the world in the telecommunications, engineering and infrastructure, building and property, mining and resources and environmental services industries.
The revelations hit its share price hard, with the stock down more than 10 percent in late afternoon trade at 17.60 dollars.
In a three-page statement to the Australian Stock Exchange, Leighton said it "takes these accusations seriously and is deeply concerned about the suggestions of impropriety", but added that the allegations were "exceptional instances".
It said that in 2011 Leighton voluntarily reported to Australian police a possible breach of its code of ethics relating to accusations of bribery in Iraq, and this was still under investigation.
"We are not aware of any new allegations or instances of breach of our ethics," it said.
The statement added that a senior executive was dismissed in 2012 and "over recent years, Leighton Holdings has continued to strengthen and improve its corporate governance and risk management processes".
"The directors of Leighton's subsidiary companies and of Leighton Holdings are aware of their responsibilities and have at all times executed their duties with the appropriate care and diligence, and in the best interests of each relevant company," it added.
