Leighton leaks millions over misleading and management
An expensive few days at Leighton Holdings, as the engineering and construction giant pays out a $70 million class action and gives a $23 million golden handshake to two departing executives.
Leighton’s annual general meeting today will surely be a lively one, after shareholders received a $69.45 million settlement over some dodgy forecasting. Investors will hardly have time to think before taking up their next issue – a massive payout for two executives who are leaving the company as it is taken over by German firm Hochtief.
Leighton has reportedly settled the shareholder class action launched over the $1.1 billion in write-downs and $427 million full-year loss the company announced in early 2011.
The poor figures saw Leighton’s share price plunge by 14 per cent, and were about $907 million less than the company told its shareholders just two months earlier.
Lawyers alleged that the company knew the write-downs were coming months in advance, but held back the information in order to deceive or mislead investors.
Lawyers from Maurice Blackburn, representing shareholders, claimed Leighton had contravened continuous disclosure rules, the Corporations Act, the Australian Securities and Investments Commission Act and the Australian Consumer Law.
Leighton is understood to have taken an early settlement, paying out $69.45 million.
But it is by no means the end of Leighton’s issues.
There will be backlash and protest voting this week, as the company prepares to hand at least $23 million to departing Leighton chief executive Hamish Tyrwhitt and chief financial officer Peter Gregg.
Advisory firms, investment groups and the Australian Shareholders Association are opposing the move, but there is little they can do.
Leighton’s 69.7 per cent shareholder, German construction group Hochtief, agreed to give Mr Tyrwhitt $12.905m and Mr Gregg $10.102m, as well as a series of non-cash benefits including free internet connections for the next 12 months.
The deal was part of the conditions for Hochtief’s takeover bid.
Leighton also faces a separate shareholder class action launched in October 2013 relating to allegations of bribery and corruption in Iraq.
Reports say Leighton was involved in the distribution of tens of millions of dollars in bribes to secure oil pipeline projects in the south of Iraq.