Australia’s biggest construction company, CIMIC, stands accused of not paying hundreds of millions of dollars to workers, subcontractors and banks in its Middle East operations in a scandal that has been described as a humanitarian disaster.
Key points:
- Hundreds of workers have been left stranded and unpaid after CIMIC announced the sale of its Middle East arm a year ago
- The company, formerly known as Leighton Holdings, has had a scandal-prone history
- Their major shareholder, ACS, has recently proposed a $1.5 billion takeover bid to take the ASX-listed company private
CIMIC, formerly called Leighton Holdings, is behind some of Australia’s landmark infrastructure and buildings, including Melbourne’s Westgate Tunnel, the Royal Adelaide Hospital and Sydney’s Star Casino.
Over the years, the media-shy organisation has been caught up in a series of high-profile international bribery and corruption scandals, corporate governance issues and shareholder class actions.
Its Middle East business has caused it the most headaches.
“The situation is a humanitarian disaster,” says Fatima Almass Al-Hamad, a judicial guard in Qatar, who was appointed by the court as an administrator of the Qatar business, Leighton Contractors Qatar, which was owned by CIMIC and a local partner.
“With no salary and no health insurance, the workers are struggling to survive and cannot support their families in Qatar or in their home countries,” she told a joint media investigation by 7.30, the Sydney Morning Herald and The Age.
‘How can I get my money?’
Michael Albrecht, an expat from Australia who worked for CIMIC’s group of companies for 17 years, spending 13 years in the Middle East, says he can’t return home until he is paid three months of overdue salary and end-of-service benefits accrued over his time at the joint venture in the Middle East.
“[The Middle East] hasn’t been a healthy business for many years,” he says.
“And now the way out is just to throw everybody on the scrap heap.”
Foreign workers from countries including India and Pakistan are trapped in labour camps, some waiting almost a year for outstanding wages and end-of-service entitlements after being made redundant or resigning.
“How can I get my money? Please. Please, please,” begs a worker who has not been paid for months.
It comes as CIMIC’s major shareholder, Spain’s ACS, lobbed a surprise $1.5 billion takeover bid to take the ASX-listed CIMIC private, which will reduce its disclosure requirements and scrutiny.
ABC’s 7.30 and the Herald spent the past two months speaking to insiders who claim things took a turn for the worse in early 2020 when CIMIC announced a $1.8 billion writedown of its joint venture operations in the Middle East, BIC Contracting (BICC), and its withdrawal from the region.
A year later, it announced the sale of BICC for a “nominal” sum to a local company called SALD.
Documents reveal that the sale price was 1 dirham (37c) along with a promise by CIMIC to inject $US130 million ($179 million) into the BICC business.
Detailed questions were sent to CIMIC, which it declined to answer.
In a statement, CIMIC said it, “continues to actively work with the acquirer of BICC to ensure BICC meets its statutory obligation to its employees”.
It said BICC was continuing to make significant progress on paying its employees’ end of service entitlements and at all times met its continuous disclosure obligations.
CIMIC says it has never controlled BICC, owning a 45 per cent share.
BICC’s 55 per cent partner, and SALD investment, who is managing the company ahead of completing the purchase, did not respond to 7.30.
Ms Bird has read various documents relating to the sale and believes CIMIC isn’t off the hook until the sale is complete.
“They have used the legal system to appear to make it all look very logical, calm, balanced, and being managed carefully,” she said.
“It’s far murkier than that.
“If this was happening in Australia, it would be considered absolutely scandalous.
“And I think the real scandal is thinking they could get away with it because it’s in a foreign country, out of sight and out of mind.”
Watch this story on 7.30 tonight on ABC TV and ABC iview
