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Thiess' questionable payments for $6bn mine contract prompt calls for corruption watchdog

by April 7, 2016 General

Foreign bribery experts have called for a national corruption watchdog in the wake of more evidence of questionable payments made on behalf of a subsidiary of the Australian construction giant formerly known as Leighton Holdings.

Key points:

  • Property developer helped Thiess secure $6 billion coal mine deal in 2010
  • Report, staff say it is likely developer made ‘payments on the side’ to secure deals
  • Revelations prompt calls for national corruption watchdog
  • Whistleblower ignored after raising questions

7.30 has obtained an internal document investigation report into how Syam Reddy — a property developer contracted by Leighton subsidiary Thiess’s Indian venture — helped secure the company a nearly $6 billion coal mine deal in 2010.

“It is likely Mr Reddy made some form of payment or promise of benefit to a government official in respect of the bid,” the report said.

Investigators Deloitte never spoke to Mr Reddy directly, but they interviewed the Thiess staff who dealt with him.

The staff revealed Mr Reddy had made numerous claims about payments he made or agreed to make.

“Mr Reddy … made comment to the effect that he had made a commitment to pay someone … approximately $16 million to influence the awarding of the contract,” the report said.

Former Thiess chief executive Bruce Munro admitted to the investigators he had some idea of what Mr Reddy was doing — making payments on the side.

“Whether that be a holiday in Singapore or $1 million, I’m not sure,” he told the investigators.

Corruption law expert Robert Wylde said the case demonstrated the need for a national corruption watchdog, similar to the NSW Independent Commission Against Corruption (ICAC).

“Labor governments in the past and the current Liberal Government don’t seem to want to put one in place as part of their own policy, which I find very disappointing because to me it demonstrates a lack of political leadership in this area,” he said.

‘We need to get the bottom of this’: Labor

7.30 spoke to Syam Reddy in India, but he declined to comment because his company had sued Thiess over his contract.

He would not discuss whether he paid any bribes.

Leighton Holdings changed its name to CIMIC after a partial takeover by Spanish construction group ACS two years ago.

Labor senator Sam Dastyari — who has led a push for a Senate inquiry into foreign bribery — described the latest allegations as appalling.

“We need to get to the bottom of what’s gone on, what’s happened, and whether or not some crimes have been committed,” he said.

Whistleblower brushed aside

It was reported a whistleblower contacted Leighton’s ethical committee chair and Thiess advisory board chair Dr Kirstin Ferguson about the payments, but no action was taken

Instead the whistleblower was dismissed.

Dr Ferguson now sits on the ABC’s board.

A case was brought by the whistleblower against Leighton, but was settled soon after.

7.30 contacted Dr Ferguson, but she did not respond to calls.