News Wrap

IN THIS morning’s News Wrap: Leighton defends silence on bribe allegations; Minerals Council hits out over ‘shoddy’ offsets inquiry; and BHP and Rio asset sales race too close to call.

Lou Caruana

Leighton defends silence on bribe allegations

Leighton Holdings has defended its decision not to publicly release information on alleged bribes paid by former executives to secure contracts in Iraq, arguing the information was “insufficiently definite” to be disclosed, according to the Sydney Morning Herald.

In its defence to a class action lawsuit filed by Melbourne City Investments in Victoria's Supreme Court, Leighton claimed it did not need to publicly disclose details of a handwritten memo by former chief executive David Stewart because the information was not expected “to have a material effect on the price or value” of its stock.

Leighton's shares tumbled more than 10% from $19.58 to $17.54 on October 3, 2013, wiping almost $1 billion of its market capitalisation, after Fairfax Media reported some of the contractor's former executives had allegedly been aware of a $42 million kickback paid to a Monaco-based company, Unaoil, to secure an oil pipeline contract in Iraq.

Minerals Council hits out over ‘shoddy’ offsets inquiry

The head of the Minerals Council of Australia has labelled a Senate inquiry into environmental offsets used to compensate for mining activities as “unnecessary and motivated by shoddy politics”, according to the Australian Financial Review.

In a stinging response to the committee – charged with examining the effectiveness of offsets such as purchasing land for preservation – MCA chief executive Brendan Pearson said the performance of Australia’s offset arrangements should be assessed through science-based expert assessment, rather than a political inquiry.

“The primary purpose of the inquiry is to support a broader anti-mining campaign rather than a genuine effort to consider the policy, which is less than 18 months old,” Pearson said.

BHP and Rio asset sales race too close to call

BHP Billiton has earned almost twice as much money from divestments as rival Rio Tinto since the great resources fire sale began 18 months ago. But analysts caution that such numbers do not necessarily point to better performance from the global Australian, according to the Australian Financial Review.

The rival divestment campaigns have been thrust into the spotlight in recent days after Fairfax Media revealed BHP was actively considering spinning out a collection of its non-core assets including nickel, aluminium and energy coal into a new listed entity owned by BHP shareholders.

Such a move would go close to completing BHP’s mission to simplify its portfolio under chief executive Andrew Mackenzie’s “four pillars” strategy in one fell swoop, leaving Rio with some of its hardest divestment work still to do.