MAY 21, 2013
THE nation's largest construction business has declared it will turn to Asia for growth, moving away from an "Australian-centric approach".
And Leighton Holdings says it plans to name four new board members by the end of next month following the abrupt departure earlier this year of several directors.
Leighton's chairman and two independent directors unexpectedly resigned in March amid accusations its major shareholder, German construction group Hochtief, was trying to dominate the board.
At the group's annual meeting yesterday, shareholders expressed their displeasure with the state of corporate governance at the group.
They lodged a strong protest vote against the nomination of Hochtief chief Marcelino Fernandez Verdes as a non-executive director.
Mr Verdes' election was never in doubt given Hochtief has a 54 per cent stake in Leighton.
Among minority shareholders, however, the Spaniard only managed to secure 45 per cent of the vote.
"If it was up to minority shareholders, the board would look very different but when you have 54 per cent of the vote it doesn't really matter," one analyst said.
A resolution to increase the remuneration of non-executive directors also failed to win majority support among minority shareholders although the company's overall remuneration report was strongly supported.
Leighton has been beset by problems in recent years including cost blowouts on major projects such as Victoria's desalination plant and Brisbane's Airport Link road.
It made deep writedowns on the value of its Middle Eastern business, which it bought just before the Dubai property bubble burst, and has been probed as part of corruption investigations relating to oil contracts in Iraq.
Last week the company was hit with a class action from about 2000 investors who say the company failed to keep them properly informed about its health leading up to a profit downgrade in 2011.
Over the past five years, the share price has more than halved.
Addressing shareholder's at the meeting, chief executive Hamish Tyrwhitt said he was looking to opportunities abroad.
Mr Tyrwhitt said he was focusing on China, India, South-East Asia and East Africa as he worked to cash in on an estimated $60 trillion in global infrastructure investment required by 2030.
"It is clear that we need to move our focus from an Australian-centric approach to one where we export our skills to markets where our services are valued and where we can add value," he said.
Mr Tyrwhitt is Leighton's third chief executive in little more than two years.
He said Leighton was "uniquely placed as the only construction company with a full footprint across Asia".
The company said it remained on track to delivering an underlying net profit in the range of $520 million to $600 million this year.
Leighton's share price jumped 3.6 per cent yesterday to close at $18.67.
