media release (19-196MR)

Former Leighton Holdings executive receives decision on sentence

Published

The New South Wales District Court today indicated that Mr Peter Allan Gregg, a former director and chief financial officer of Leighton Holdings Ltd (LHL) would be sentenced to a total effective sentence of 2 years imprisonment, to be served by way of Intensive Correction Order (ICO).

Pursuant to the order (and subject to being assessed as suitable) Mr Gregg will be required to serve 12 months of that term by way of home detention. The matter has been adjourned to 29 August 2019, in order to allow time for Mr Gregg to be assessed for the purposes of imposing the home detention condition.

On 11 December 2018, Mr Gregg was found guilty by a jury after a five-week trial of two counts of contravening section 1307(1) of the Corporations Act 2001 by having engaged in conduct that resulted in the falsification of LHL’s books.

The first count concerned a written payment instruction from Mr Gregg in August 2011 to LHL’s treasury department directing that two payments totalling USD$15 million be made to Asian Global Projects and Trading FZE (Asian Global), a company incorporated in the United Arab Emirates.

The payment instruction directed that USD$12.5 million be paid for the purpose of 'marketing and advisory' services and that USD$2.5 million be paid as a 'loan'. During the course of trial, the Crown alleged that the payment instruction was false because it did not describe the true purpose of the payment. At the Sentence Hearing it was submitted by the Crown that it was open for the Court to find that the true purpose of the payment was to secure the waiver of a financial obligation that one of LHL's subsidiary's had in connection with its business in India.

In court today, His Honour Judge Lakatos indicated that in relation to Count 1, he intended to sentence Mr Gregg to a period of imprisonment of 12 months, to be served by way of an ICO. His Honour stated that '…the evidence is overwhelming that the purpose of the offender in writing and sending the payment instruction, was to secure a waiver of the loan obligation which would accrue to Leighton Holdings.'   

The second count concerned a written agreement between LHL—executed by Mr Gregg on its behalf—and Asian Global in December 2011 (but backdated to August 2011) for the provision of steel procurement services by Asian Global. In ruling today, His Honour found that the agreement was signed 'in order to legitimise the payment of US$15million’. Additionally His Honour stated that ‘having regard to the offender’s motivation and intention, this was a serious contravention.'

In relation to Count 2, His Honour indicated that subject to being assessed as suitable, Mr Gregg would be sentenced to a concurrent period of imprisonment of 2 years, with 12 months to be served by way of home detention.

His Honour stated: 'I conclude that the offender benefited in avoiding reputational damage to himself and Leighton Holdings, and that it was avoiding financial and reputational damage to his employer which primarily motivated him to engage in his conduct'.

His Honour also stated: '… objectively the offender's criminality is serious and a substantial penalty should be imposed reflecting that fact. …. The new [sentencing] regime imposes not insignificant restrictions on the liberty of an offender and whilst acknowledging that it is less stringent than a full-time custodial term, it nevertheless represents a significant impost on the freedom of an offender. …. In particular, the imposition of a home detention condition clearly marks an intensive correction order as a custodial sentence with "bite"'.

In addition to any ICO that Mr Gregg must serve, he will also be automatically disqualified from managing corporations for a period of 5 years as a result of his conviction.  

'Australia's financial system relies heavily on consumer trust and confidence in business. The falsification of a company's books undermines that trust and ASIC will take action when it occurs,' said ASIC Commissioner John Price.

The matter was prosecuted by the Commonwealth Director of Public Prosecutions.

The matter is before the court again on 29 August 2019 at which time Mr Gregg will be sentenced.

Editor's note:

On 29 August 2019, Mr Gregg was sentenced by the Court and convicted on both counts. In connection with count one, he was sentenced to a period of imprisonment of 12 months to be served by way of an ICO. In relation to count two, he was sentenced to a period of imprisonment of 2 years to be served by way of an ICO, concurrently with count one, 12 months of which is subject to a home detention condition.

 

Editor's note 2:

Mr Gregg has lodged an appeal against his conviction and sentence with the New South Wales Court of Criminal Appeal. The appeal has been listed for call over on the 12 September 2019.

Editor's note 3:

The appeal has been listed for hearing on 22 April 2020.

Editor's note 4:

On 18 October 2019, the New South Wales Court of Criminal Appeal granted conditional bail to Mr Gregg pending the outcome of his appeal, which is due to be heard on 22 April 2020.

Editor’s note 5:

The appeal was heard before the New South Wales Court of Criminal Appeal on 22 to 24 April 2020 and the Court has reserved its decision.

Editor's note 6:

On 30 September 2020, the NSW Court of Criminal Appeal allowed Mr Gregg’s appeal. The Court quashed the verdict of guilty and entered a verdict of acquittal on each count (20-228MR).

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