Jury to hear King-Fairfax case

Wal King has scored his first victory in defamation case against Fairfax Media.

Former Leighton chief executive Wal King has scored his first victory in his defamation case against Fairfax Media after a judge in the NSW Supreme Court yesterday agreed the majority of defamatory imputations ­alleged in Mr King’s statement of claim could be heard by a jury.

In an imputations hearing ­before Justice Lucy McCallum, Fairfax sought to strike out 12 ­imputations alleged by Mr King in his claim following a series of ­reports in Fairfax Media news­papers alleging he approved the payment of a bribe on an oil project in Iraq.

The judge found that eight of the 11 imputations were reasonably capable of being conveyed by the articles and could be considered by a jury. Three others will also remain, subject to amendment by Mr King’s legal team.

Fairfax counsel Alex Leopold SC said the media company could need another nine weeks to file its defence, a delay likely to be contested by Mr King’s legal team.

The Australian reported this week that Mr King will be interviewed by the Australian Federal Police in the coming weeks over the Iraq bribery scandal as speculation mounts that the AFP is moving to finalise its investigation into the affair.

Meanwhile, Leighton’s target statement for Hochtief’s $1.2 billion takeover offer for the company released yesterday reveals that independent expert KPMG has questioned the carrying value of Leighton’s $5.1bn of outstanding receivables and the value of its Middle East joint venture, Habtoor Leighton Group.

KPMG’s report, which finds the takeover fair and reasonable, says that it had ad­opted a discount to the carrying value of Leighton’s receivables of between $200 million and $300m “to reflect both the time value of money and the risks inherent in their recoverability’’.

The Leighton board opted against booking any writedowns on its balance sheet in relation to the receivables in its annual results in February before Hoch­tief chief executive Marcelino ­Fernandez Verdes took over as Leighton chief.

The KPMG report also applies a discount to the carrying value ­of Leighton’s investment in Habtoor worth more than $1.3 billion.

“The estimated market value of Leighton’s investment in HLG (is estimated) to be in the range of $500m to $650m, with the relatively wide range ­reflecting the significant uncertainties associated with this ­investment,’’ it says.

Leighton’s target statement notes that the investigation currently being undertaken by the AFP could result in charges being brought against any current or former employee which may “have a material adverse ­effect on Leighton’s ability to ­secure future work opportunities, and may also affect its investments and its relationships with suppliers or joint-venture partners’’.

Separately, Leighton this week brokered a settlement with one of the most powerful sheiks in Qatar over a $365 million construction project in Doha.

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