Leighton downplays allegations

Leighton Holdings (LEI) has responded to reports the company's knowledge of corruption was far greater than believed saying it takes the accusations seriously and is deeply concerned about the suggestions of impropriety.

In a statement to the Australian Securities Exchange, Leighton said it was not aware of any new allegations or instances of breach of our ethics.

"The Iraq investigation and the construction of the barge in Indonesia are exceptional instances that are the subject of either an ongoing confidential investigation by the AFP or litigation commenced by Leighton Holdings which is before the courts," the group said.

"Leighton Holdings reiterates the information previously disclosed on February 13, 2012.

"Leighton continues to cooperate with the AFP while the AFP undertakes its investigation."

Investors reacted poorly the the developments. At 1030 AEST Leighton shares were 8.84% lower at $17.85, against a benchmark index rise of 0.34%.

King refutes allegations

The Australian reports Leighton's former chief executive Wal King has refuted allegations of misconduct and bribery at the group's international businesses. According to the newspaper, Mr King is discussing the matters with his legal team and is expected to release a statement later in the day.

The comments come following suggestions senior executives and directors at Leighton were far more aware of extensive bribery, corruption and cover-ups in the company's international divisions than previously believed, according to internal company files reported by Fairfax Media.

During a six-month investigation by Fairfax, a range of Leighton documents suggested that the company's chief executive at the time, Wal King, and his successor David Stewart were aware of the practices, including plans to pay hefty kickbacks in Iraq, Indonesia, Malaysia and elsewhere, among other questionable activities.

Among the documents was a handwritten memo on November 23, 2010 by then-acting chief executive Mr Stewart detailing how Leighton International's managing director, David Savage, revealed in a meeting that he and Mr King knew a $42 million kickback was paid to a company in Monaco nominated by Iraqi officials who chose Leighton for a $750 million oil pipeline contract, Fairfax reported.

“I asked did Wal K approve of this? And he said yes,” Mr Stewart's memo reportedly says.

The revelation prompted the Australian Greens to say recent high-profile corruption scandals suggest the corporate watchdog and police are not working closely enough.