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Leighton's King denies knowing of bribes

 

Former Leighton Holdings boss Wal King has denied he had knowledge of the construction giant's allegedly corrupt dealings in Iraq.

Fairfax Media has reported senior Leighton executives, including Mr King, were aware of alleged kickbacks paid to a Monaco firm with close ties to Iraqi officials that awarded the company a $750 million oil pipeline contract.

The allegations caused Leighton shares to suffer their heaviest one-day fall in more than two years, losing $2.04, or 10.4 per cent, to $17.54.

The fall wiped almost $700 million from the company's market value.

But Mr King has denied the claim, and says he is seeking legal advice.

"I deny the allegations that I had any prior knowledge of circumstances in Iraq," he told ABC Radio.

Corruption allegations involving Leighton are not new.

The company referred accusations it paid bribes in Iraq to the Australian Federal Police in November 2011, before making the issue public three months later.

But senior executives had not previously been linked to alleged illegal payments.

In a statement, Leighton said it was still cooperating with the AFP on the ongoing investigation, and wasn't aware of any new allegations or instances of a breach of its code of ethics.

"The directors of Leighton's subsidiary companies and of Leighton Holdings are aware of their responsibilities and have at all times executed their duties with the appropriate care and diligence, and in the best interests of each relevant company," it said.

Federal Greens MP Adam Bandt criticised the AFP over the length of time its investigation has taken.

In response, the AFP said the Leighton investigation remained a priority, but the process of investigating claims of foreign bribery was a complex and lengthy one.

Leighton sacked a senior executive in July 2012 after its own investigation into the alleged breach of its code of ethics in Iraq.

The company has also launched court action against a former employee to recover $5.6 million for alleged breaches of contractual and fiduciary duties relating to the construction of a barge in Indonesia.

It says it has since changed its management structure and tender process.

"That Leighton self-reported the matter which is the subject of the AFP's investigation ... is evidence of the culture of integrity and openness that has been established across the Leighton Group," the company said.

"The company is focused on ensuring that its values are consistently applied across the Leighton Group and any deviation from those values will not be tolerated."