Corruption claims hit Leighton shares

By Evan Schwarten

SYDNEY, Oct 3 AAP - Shares in construction giant Leighton have dropped by nearly 10 per cent after reports corruption and cover-ups were rife in the company and known to its top executives.

Leighton issued a statement before the market opened to say it is not 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.

The company itself referred accusations of the payment of bribes by one of its subsidiaries working in Iraq to the Australian Federal Police in 2011.

The AFP is continuing to investigate the matter.

But Fairfax Media on Thursday said internal company files indicated corruption was more widespread, and known to top executives.

The company's shares fell heavily when trade began on Thursday, down $1.78, or 9.1 per cent, at $17.80 at 1022 AEST.

The company went public with the potential breach in Iraq in early 2012, after keeping the matter confidential for several months to allow the AFP to collect evidence about the matter.

"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."

Leighton sacked a senior executive in July 2012 after its own investigation into the alleged breach of its code of ethics in Iraq in 2011.

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