Former exec faces jail for cooking the books at one of Australia's biggest construction firms


December 11, 2018 18:33:29

The former chief financial officer of construction giant Leighton Holdings, Peter Gregg, has been found guilty of falsifying the company’s accounts.

Key points:

  • Peter Gregg faces a maximum of four years in jail and/or a $22,000 penalty
  • The former Leighton CFO was accused of conduct that resulted in the falsification of Leighton’s books
  • Mr Gregg is on bail pending his next hearing on January 31, 2019

Mr Gregg faced a five-week trial in the New South Wales District Court, where a jury convicted him of two counts of contravening section 1307(1) of the Corporations Act.

The jury found that Mr Gregg, who was also a former director of Leighton, had engaged in conduct that resulted in the falsification of its books.

The criminal case was brought against Mr Gregg by the Australian Securities and Investments Commission (ASIC), following a multi-year investigation and a federal parliamentary inquiry.

Middle East business dealings

The allegations related to Leighton’s operations in the Middle East and Iraqi oil industry almost a decade ago.

ASIC had been investigating allegations that Leighton had bribed foreign officials between 2009 and 2011.

The case gained momentum in 2012 when the company reported its own concerns over the alleged corruption to ASIC.

The prosecution case centres on a $US15 million ($21 million) payment made to a company operating out of the United Arab Emirates.

ASIC alleged the 2011 deal to buy and sell steel with this company was “never a genuine agreement” and that Mr Gregg, Leighton’s then-chief financial officer, sent “a payment instruction” relating to two payments totalling $21 million.

The New South Wales District Court was told one $US12.5 million payment was recorded as being made for “marketing and advisory” services.

The second $US12.5 million payment was described as a loan.

ASIC alleged the books were also falsified when the payments were backdated to earlier in 2011 in a further attempt to “justify” the payments.

Mr Gregg has been bailed to appear before the District Court again on January 31.

ASIC said the maximum penalty for each offence was up to two years in prison and/or a fine of $11,000.

However, Russell John Waugh, the former managing director of Leighton Welspun Contractors Pvt Ltd, was found not guilty of one count of aiding and abetting the commission of an offence by Mr Gregg.

Leighton Holdings changed its name to CIMIC in 2015.

High-profile executive

Mr Gregg had been one of corporate Australia’s most prominent financial kingpins and deal makers up until the ASIC charges.

He served as the chief financial officer at Qantas from 2000 to 2008, resigning just weeks after Alan Joyce was appointed as chief executive officer, replacing veteran Qantas boss Geoff Dixon.

Mr Gregg worked closely with Mr Dixon on a failed $11 billion takeover bid for Qantas by a private equity consortium in 2007 — a deal supported by the airline’s management and board, but rejected by shareholders.

He was recruited Leighton Holdings in October 2009, and served as chief financial officer at the sprawling, global construction conglomerate for almost five years.

In 2015 he finally achieved his long-term ambition to run a company, taking the chief executive officer job at ASX top 200 firm Primary Healthcare.

Mr Gregg resigned from Primary in May last year after ASIC said it would pursue the document falsification charges.

Mr Gregg said he would fight the charges and maintained his innocence throughout the trial.






First posted

December 11, 2018 15:49:59

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