Construction group Leighton Holdings (LEI) has downplayed reports that the company's knowledge of corruption was far greater than believed, but the company's response comes as Fairfax Media reported further internal documents illustrating senior executives' supposed knowledge of corruption issues.
The issue of corruption and governance concerns within Leighton resurfaced earlier this week following a six-month investigation by Fairfax Media that suggested senior executives were aware of improper behaviour within the company's international business.
The latest documents to be reported on detail an email from Leighton Holdings' former chief operating officer, Bill Wild, saying that “everywhere you look in LIL [Leighton International Ltd] there is evidence of corruption and/or incompetence”, Fairfax reported.
Lawyers for former Leighton chief executive Wal King have rejected any wrongdoing and pledged action to protect his reputation, as initial Fairfax reports suggested documents showed Mr King and other senior executives were aware of the corrupt activities but did not act on them.
In comments to two media outlets, Mr King strongly denied allegations of any prior knowledge on his part to corrupt activities.
A leaked Australian Federal Police transcript of a police interview earlier this year with a former top Leighton senior executive outlined allegations that Leighton International's board failed to uphold basic corporate governance standards.
“One of our major concerns here was that there was very little corporate governance with Leighton International full stop,” the former executive said in the transcript, according to Fairfax.
“[Leighton] International had almost no corporate governance at all and you look at some of the processes and problems that we uncovered ... there as just a litany of disasters.
“I would say that there was really no effective corporate governance framework in LIL.”
Leighton's share price dived 10.4% to $17.54 yesterday (see Ian Verrender's Leighton corruption hits profit).