Economy

Leighton Holdings gets sued; Markets hold their breath for American debt-limit resolution: Midday Roundup

Myriam Robin /

The alleged Leighton Holdings’ bribery scandal, uncovered by Fairfax reporters last week, has led to the first legal problems for the construction and logistics giant.

Melbourne lawyer and investor Mark Elliot lodged writs in the Victorian Supreme Court on Friday alleging Leighton had breached its continuous disclosure obligations.

This is in reference to alleged bribes paid to win contracts in the Middle East, including, allegedly, to former Iraqi dictator Saddam Hussein.

In a statement released today, Leighton Holdings denied there was a proper basis for the claim, and vowed to “vigorously defend this class action”.

In a statement released last week in reference to the corruption allegations, Leighton Holdings said while some breaches of ethics had occurred in the past, these were minor and had since been addressed through voluntary reporting to the Australian Federal Police and the dismissal of a senior executive.

More than $957 million was wiped off the market value of Leighton in two days after the bribery allegations were reported, however, Leighton shares are up 3% this morning, recovering some of their lost ground.

Leighton’s shares lost 4.6% on Friday, which followed a 10.4% fall on Thursday.

Abbott announces business delegation to China

Fresh from his visit to Indonesia, Prime Minister Tony Abbott is in Bali for the APEC summit.

According to reports, he has bet with Chinese President Xi Jinping and stressed that he wants to broaden Australia’s business engagement with China.

He also announced that he plans to visit China with a delegation of Australian business leaders and state premiers early next year.

Businesses keen to join the delegation will soon be able to register their interest with the Department of Foreign Affairs and Trade.

Australian shares start the week steady

The Australian sharemarket began the weak relatively unchanged from its Friday close.

At 11.30am, the S&P/ASX200 was up just 0.04% to 5210.3 points, while the broader All Ordinaries gained 0.05% to 5208.7 points.

The American government shutdown has entered its fifth day, and news on this front is likely to be what moves the market in the next few days.

Republican House Speaker John Boehner said in an interview with ABC’s This Week that the votes were “not in the House” to pass a clean debt limit bill.

If it does not find a compromise, America is due to default on its debt on October 17.

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Myriam Robin

Myriam Robin is a reporter for SmartCompany and its sister site LeadingCompany. She has degrees in economics, international studies and journalism. She likes writing about businesses taking risks and doing new things.

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