CIMIC paid $130M to give away its Middle East unit — hundreds of workers left unpaid

In early 2020 CIMIC — Australia's largest construction group, formerly Leighton Holdings — announced a $1.8 billion writedown of its Middle East joint venture BIC Contracting (BICC) and its withdrawal from the region. A year later it sold BICC to a local company called SALD for a nominal sum: documents showed the sale price was one dirham (37 Australian cents), along with a promise by CIMIC to inject $US130 million into the business. "They effectively paid to get rid of a headache," said Helen Bird, a lecturer at Swinburne Law School and a member of ASIC's corporate governance panel.

By March 2022, a joint investigation by ABC's 7.30, the Sydney Morning Herald and The Age found hundreds of workers stranded and unpaid — foreigners from countries including India and Pakistan stuck in labour camps, some waiting almost a year for outstanding wages and end-of-service entitlements. Michael Albrecht, an Australian who had worked for CIMIC group companies for 17 years, could not return home until owed salary and benefits were paid. A court-appointed judicial guard administering the Qatar business, Fatima Almass Al-Hamad, called the situation "a humanitarian disaster".

CIMIC declined to answer detailed questions. In a statement it said it never controlled BICC, in which it held a 45 per cent share, and that it continued to work with the acquirer to ensure BICC met its statutory obligations to employees, with "significant progress" on end-of-service payments. As the scandal aired, CIMIC's major shareholder, Spain's ACS, had just lobbed a surprise $1.5 billion takeover bid to take the ASX-listed company private — a move that would reduce its disclosure requirements and scrutiny.

The Middle East business had been unhealthy for years, and the exit was engineered on paper: a one-dirham sale price propped up by a $130M funding promise.

Payment of wages and end-of-service benefits was left to the thinly capitalised local buyer, and workers went unpaid for months while the seller walked away.

The structure did not actually sever the story: the 45% stake, the $130M promise and the unpaid workforce kept CIMIC's name attached to every missed entitlement.

Launching a $1.5B privatisation bid mid-scandal read to governance experts as an attempt to escape public-market disclosure and scrutiny.

Selling a loss-making unit does not end a company's duties: whoever is closest to the workforce still wears the human and reputational cost of an exit done on paper only.

CIMIC said BICC was continuing to make significant progress on employees' end-of-service entitlements and had met its continuous disclosure obligations; BICC's 55 per cent partner and SALD investment did not respond to the investigation. Helen Bird said CIMIC had treated its workforce "absolutely abominably" and was not off the hook until the sale completed. The 7.30/SMH/The Age report aired in March 2022, with ACS's $1.5B take-private bid still on the table.