Fallout from Leighton may hit UGL plans

Negotiations were continuing late on Wednesday regarding the future of senior UGL employee Russell Waugh in light of his background as a former senior employee of Leighton Holdings.

It is believed Mr Waugh had been hired directly by the UGL board and was intended to take over as the chief executive of the engineering group following the spin-off of its property management services arm DTZ, which is slated for fiscal 2015.

A spokesman for UGL said discussions had not yet been finalised over the future status of Mr Waugh with the company.

The talks follow the resignation of two other former senior Leighton figures - David Stewart and David Savage- from their positions as the chief executive of Laing O'Rourke Australia and as a director of British construction outfit Keller, respectively, in recent days.

Mr Waugh, Mr Stewart and Mr Savage were formerly associated with Leighton when it was run by Wal King and engaged in activities which have raised a series of governance issues over alleged bribes.

Mr King remains a director of two public companies, Coca-Cola Amatil and Ausdrill.

Those companies refused to be drawn into the controversy surrounding Mr King's fitness to remain a director in the wake of the allegations about Leighton's activities when he was the chief executive.

Coca-Cola Amatil and Ausdrill said they had "no comment" when asked whether the directorship of Mr King was under review.

Mr King is also a director of the Garvan Research Foundation board, the fund-raising arm of the Garvan Institute of Medical Research. A spokeswoman said it had no comment to make.

Mr King has denied any allegations of wrongdoing.

At its annual shareholder meeting on Wednesday, global consultant engineer WorleyParsons told shareholders it had "zero tolerance of corrupt practices", pointing out it had auditing and staff training to ensure it did not engage in these practices.

Earlier this week, UGL extended the contract of its chief executive, Richard Leupen, until fiscal 2015 as part of its reorgaUnnisation, with Mr Waugh intended to lead the independently listed engineering business.