Police, ASIC unite on bribe case
Workers from the corporate regulator may be seconded to the Australian Federal Police to work on the investigation into the high-profile bribery allegations against construction company Leighton Holdings, it was revealed on Friday.
Australian Securities and Investments Commission chairman Greg Medcraft said his agency was working closely with the federal police on the matter by sharing intelligence and, potentially, staff.
"The relationship and the liaison with AFP are absolutely critical - we are meeting with them regularly and we are actually looking into secondment of somebody into the AFP to make that relationship even stronger," he said.
But, speaking after a speech to the American Chamber of Commerce in Australia on Friday, he said that any ASIC-led civil investigation into the bribery allegations against Leighton should follow the criminal investigation by the federal police. He said it was incorrect to suggest ASIC and the AFP could run parallel civil and criminal investigations.
"The main game is criminal," he said. "We want to have an efficient use of resource and get the best possible outcome. Let the AFP do its job of pursuing the criminal charges."
The ASIC chairman said he was reluctant to use the formal investigative power of ASIC, which could compel witnesses to give evidence.
Mr Medcraft said that it was extremely damaging for a company if ASIC launched a formal investigation. He also suggested reputational damage flowing on from foreign corruption charges could act as strong deterrent against wrongdoings by company directors.
"If a company or its employees are seen as, in some way, of being tainted by bribery allegations that will affect your reputation," he said.
"And, for most of the companies, the most valuable asset is their reputation."
The corporate watchdog can pursue company directors for beach of duty under the Corporations Act for alleged bribery of foreign officials.
Meanwhile, Mr Medcraft threw his weight behind litigation funding, describing it as a "democratisation of law" and not in need of further regulation.
"As long as they treat ... the people who are investors fairly, and they don't take too much of the recovery, I think class litigation acts are great democratisation of law," he said.
"I am not a fan of more regulation. You avoid regulation if there is not a problem with litigation funders. The main thing there is to make sure that people who are actual beneficiaries of the action are treated fairly."
The comments come amid expectations that the government will review the sector, due to the comments in July by now Attorney-General George Brandis that "greater regulation of litigation funding of class actions should be examined".
Australia's biggest litigation funder IMF and labour law firm Maurice Blackburn said this week they expected a review.
Malcolm Maiden— Page 9