Leighton Holdings pays $300,000 fine over earnings downgrade infringement notices

Construction group Leighton Holdings has accepted, without admission of liability, three infringement notices issued by ASIC in relation to the earnings downgrade it issued on April 11 last year.

Leighton paid the three penalties of $100,000 each on March 16 in compliance with the infringement notices.

In a statement Leighton said it had agreed to accept these infringement notices and pay the penalty as a way to conclude ASIC's investigation and to avoid additional legal costs.

Leighton Holdings chairman Stephen Johns says that as part of accepting the infringement notices, Leighton has agreed to implement a formal review of its continuous disclosure policies and procedures.

"We take our continuous disclosure obligations very seriously and have undertaken to ASIC to implement an independent review of our systems," he says.

"We recognise that continuous disclosure is extremely important for the efficient operation of the market and will use the review as part of our program to improve the systems that support our business.  We will commence the review as soon as practical.

"The infringement notices allow Leighton to move on from the events surrounding the earnings downgrade last year. This enables the management team, led by Mr Hamish Tyrwhitt, to focus on the operations of the business. They are not an admission of liability nor a finding of any breach of law.

"This gives us certainty and we are pleased to bring the ASIC investigation to a close," Johns says.

In the April 11 notice, the Leighton Group said it expected to report a loss of $427 million for the financial year, compared with its previous guidance for a profit of $480 million after tax – the worst annual loss in the company’s history.

“The revision is primarily due to writebacks of expected profit on the Airport Link project in Queensland and the Victorian Desalination Project, and an impairment of Leighton’s investment in the Habtoor Leighton Group (HLG),” the company said at the time.

ASIC chairman Greg Medcraft said the enforcement outcome achieved in this case “utilises the variety of regulatory tools available to ASIC to maintain overall integrity of its markets”.

 

 

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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