Brockman boss faces charges
Luk Kin Peter Joseph has confirmed that charges have been laid against him by Hong Kong's Independent Commission Against Corruption, which has been investigating him since October 2011. While the exact nature of the charges were unclear, Brockman said Mr Luk planned to defend the charges vigorously.
"Mr Luk has informed the company that charges in relation to certain alleged offences under the Prevention of Bribery Ordinance and the Crime Ordinance have been laid against him today by ICAC and he was currently on bail pending for the relevant hearings," the company said in a statement.
Brockman said the charges relate to an issue that occurred before Mr Luk joined the company.
Mr Luk has continued serving as chief executive over the past two years despite the corruption cloud continuing to hang over himself and his role at the company. Brockman indicated there would be no change to that stand, despite the matter progressing toward charges.
The charges come at an awkward time for Brockman, which is coming towards the end of a rail access dispute with Fortescue in Western Australia. Brockman has a massive, high-quality iron ore deposit in the Pilbara, but has no way of transporting the product to Port Hedland for export. Thus it has launched a hostile bid for access to Fortescue's railway under third party access laws.
That bid appears bound for at least one and possibly two arbitration sessions. Fortescue has refused to negotiate with Brockman so far, and has publicly questioned whether Brockman has the leadership capacity and financial firepower to develop its iron ore project.
Brockman's Australian boss, Russell Tipper, said he did not expect the charges against Mr Luk to damage perceptions of the company's managerial staff. "These sorts of regulator actions and matters happen from time to time. I guess I don't need to point you in the direction of our counter-party [Fortescue chairman Andrew Forrest] in terms of his run-in with ASIC. I don't think that diminishes your ability to manage the company," he said, in reference to ASIC's failed attempt to charge Mr Forrest with misleading investors, which culminated in October 2012.
Mr Tipper said Brockman's alliance with rail provider Aurizon - which would see Aurizon build and operate whatever additional transport infrastructure that Brockman might need - should also calm any concerns about managerial expertise. "We believe that we are going to be able to deal with the issue of managerial capability quite satisfactorily," he said.
Frequently Asked Questions about this Article…
Hong Kong’s Independent Commission Against Corruption (ICAC) has laid charges against Mr Luk in relation to alleged offences under the Prevention of Bribery Ordinance and the Crime Ordinance. The exact nature of the charges was not detailed in the company statement, and Mr Luk is on bail pending the relevant hearings.
Brockman says the charges relate to an issue that occurred before Mr Luk joined the company, so the company has indicated the matter is not tied to his activities at Brockman.
No. Brockman has stated there will be no change to Mr Luk’s role and he has continued serving as chief executive over the past two years. The company also said Mr Luk plans to defend the charges vigorously.
The charges come at an awkward time as Brockman approaches the end of a rail access dispute with Fortescue. While the article does not state a direct legal effect, Fortescue has already refused to negotiate and publicly questioned Brockman’s leadership capacity and financial firepower — perceptions that could be sensitive during arbitration.
Brockman has a large iron‑ore deposit in the Pilbara but lacks transport to Port Hedland, so it launched a hostile bid for access to Fortescue’s railway under third‑party access laws. That bid appears likely to proceed to at least one, possibly two, arbitration sessions after Fortescue refused to negotiate.
Russell Tipper said he did not expect the charges to damage perceptions of the company’s managerial staff, noting regulator actions happen from time to time. He also pointed to Brockman’s alliance with Aurizon as a factor that should reassure stakeholders about managerial capability.
Brockman has an alliance with rail provider Aurizon, which would build and operate any additional transport infrastructure Brockman might need. The company says this arrangement should help address concerns about its managerial expertise and ability to deliver the project.
Investors should monitor the progress of the Hong Kong legal proceedings and any scheduled hearings related to the ICAC charges, the outcome and timing of arbitration sessions with Fortescue over rail access, and updates on the Aurizon alliance and Brockman’s plans for exporting its Pilbara iron‑ore deposit.
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