This article is from the Australian Property Journal archive
HOCHTIEF, the major shareholder in Leighton Holdings, has elevated Bob Humphris to the role of chairman and at the same time refuted claims that it had tried to undermine the independence of Leighton.
Leighton has moved swiftly into damage control to contain the fallout following the resignations of chairman Stephen Johns and two independent directors, Wayne Osborn and former Reserve Bank of Australia governor Ian Macfarlane last Friday.
The shock resignations prompted ratings agency Standard and Poor’s to place Leighton on CreditWatch with negative implications.
Johns, Osborn and Macfarlane resigned last week following a breakdown in relations with the major shareholder Hochtief (54% stake), which is majority owned by Spanish firm Actividades de Construccion y Servicios SA (ACS).
Johns claimed that Hochtief executive chairman Marcelino Fernandez Verdes interfered with the appointment of a new independent director.
“These actions gave rise to serious concerns that Hochtief no longer supported the important principle of board independence,” Johns wrote in his resignation letter.
However Hochtief offered a different explanation.
Hochtief said it strong disagrees with Johns assertions and it was incorrect of Johns to claim that Fernandez Verdes intefered in the appointment process of a new independent director.
“The entire Leighton board, including Hochtief associated directors, has always participated in the selection and appointment process of independent directors.
“Mr Fernandez Verdes suggested that the board would benefit from the addition of a new director with a different set of skills to that offered by the proposed candidate. He offered a resume of an additional candidate for the Rem & Nom Committee’s consideration… Equally, the reasons for Hochtief’s lack of support for Mr Johns’ re-election were advised to all other directors,” Hochtief said in a statement.
Hochtief said for thirty years the two companies have followed a set of informal and non-binding independence governance principles and Hochtief had not given the independent directors any cause to believe it moving away from those principles.
However, Hochtief said, as a major shareholder of Leighton, the company is free to reconsider these matters in the future.
The company also said it was concerned by a proposal from the independent directors to alter the governance protocols, which if implemented, would have the effect of excluding Hochtief from any material role in the nomination of any future independent directors and chairman.
Meanwhile the remaining independent director Paula Dwyer has been appointed to lead a
special committee of the board to identify and appoint additional independent directors.
Property Review
