Leighton's books were falsified over $21M in sham payments — ex-CFO convicted

In December 2018 a NSW District Court jury convicted Peter Gregg — former CFO and director of construction giant Leighton Holdings — on two counts of falsifying the company's books, after a five-week ASIC trial backed by a federal parliamentary inquiry.

A 2011 steel buy-and-sell deal with a UAE company was, ASIC alleged, 'never a genuine agreement'. Two payments of $US12.5 million each — $21 million total — went out on Gregg's instruction: one booked as 'marketing and advisory' services, the other called a loan. The books were then falsified again when the payments were backdated to earlier in 2011 to justify them, ASIC said. The backdrop was Leighton's Middle East and Iraqi oil operations, which the company itself flagged to ASIC over possible foreign bribery in 2012.

Gregg, one of corporate Australia's most prominent deal makers — Qantas CFO from 2000 to 2008 — faced up to two years' jail and an $11,000 fine per count, and was bailed for sentencing. Co-accused Russell John Waugh, former managing director of Leighton Welspun Contractors, was acquitted of aiding and abetting. Leighton Holdings had by then been renamed CIMIC.

Criminal convictions carrying up to two years per count; the case stemmed from an ASIC probe into alleged bribery of foreign officials from 2009 to 2011.

The outflows were dressed as ordinary commercial items — marketing services, a loan — with no genuine steel trade behind them.

When the payments' timing looked suspicious, the response was to backdate documents rather than disclose the problem.

The falsification sat inside the accounts of Australia's largest contractor, certified to the market for years.

The company's own 2012 self-report to ASIC kept the transactions under investigation long after the executives moved on.

Backdated paperwork justifying a sham payment turns an accounting error into a crime — and the falsification outlives the payment by decades.

Gregg was convicted in December 2018 and bailed ahead of a January 31 hearing, facing up to four years' imprisonment and fines in total. The verdict landed as the visible outcome of ASIC's long-running examination of Leighton's Middle East dealings; Leighton Holdings itself had already been renamed CIMIC in 2015, severing the brand from the era the payments belonged to.