LEI responds to media reports

Company says it referred Stewart's file note to police in same month it was brought to board's attention, will defend class action.

Leighton Holdings (LEI) has responded to media coverage of corruption allegations, saying the news stories contain "inaccuracies" and the company's board and management condemn any form of corrupt or fraudulent behaviour, as the group was hit with a fresh class action.

In a statement to the Australian Securities Exchange, Leighton said it takes exception to the "sweeping criticisms" of its governance structures, processes and integrity.

Fairfax Media last week published the results of a six-month investigation, suggesting senior executives were aware of improper behaviour in Leighton's international business.

"When the Leighton board became aware of David Stewart's handwritten file note it referred the matter to the AFP and has been cooperating with the AFP since that time," Leighton said.

"The note was brought to the attention of the board in November 2011 and was referred to the AFP in November 2011.

"To facilitate the collection of evidence, Leighton, in cooperation with the AFP, kept the information confidential until, with the AFP's approval, an announcement was able to be made in February 2012."

The group also commented on media coverage of the possible employee fraud concerning the construction of a barge.

"[The coverage] has deflected the fact that this issue was investigated on more than one occasion and ultimately by external auditors, engineers and lawyers," Leighton said.

"The investigations have led to court proceedings being brought against the ex-employee, with Leighton seeking the recovery of $5.6 million.

"These steps were taken before media reporting on the matter, not in reaction to it.

"The attempt by some media, or their sources, to characterise this issue as a foreign bribery matter is misguided and incorrect."

Leighton said it employs 61,000 people in 25 countries and "unbalanced" media reporting would damage the group's reputation and affect staff, clients and shareholders.

Leighton to defend new class action

Leighton says it will vigorously defend a fresh class action alleging it has breached its continuous disclosure obligations.

In a statement to the Australian Securities Exchange, Leighton said it received notice on October 5 from Melbourne lawyer and investor Mark Elliott that a writ was issued by the Supreme Court of Victoria on October 4 against Leighton.

The writ alleges Leighton breached obligations in s 674(2) of the Corporations Act through failing to disclose allegations of bribery and corruption involving senior officers responsible for a project in Iraq, and an investigation of misbehaviour involving senior officers including misbehaviour the subject of a claim by Leighton against a former employee for $5.6 million.

Leighton denies there is a proper basis for the alleged claim and says it will defend the class action.

Mr Elliott's action is separate to law firm Maurice Blackburn's planned class action on behalf of shareholders against Leighton for alleged disclosure failures.

More than $957 million was wiped off the market value of Leighton in two days after the bribery allegations were reported last week.

At 1101 AEDT Leighton shares were 3.43% higher at $17.315, against a benchmark lift of 0.03%.

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