ASIC chair Greg Medcraft hits back at criticism of handling of Leighton case AUSTRALIAN Securities and Investments Commission chairman Greg Medcraft has hit back at critics who said the watchdog should have more aggressively pursued corruption allegations about construction giant Leighton Holdings. Criminal prosecution, not a civil case, was the main aim of investigations into alleged corruption at Leighton, he said, with the maximum criminal penalties facing wrongdoers being 10 years in jail and a $1.7 million fine. "Let the main game play out," the ACCC boss said. Speaking at an AmCham lunch in Melbourne today, Mr Medcraft said that much of the comment about the ASIC's role in investigating foreign bribery allegations had been ill-formed. ASIC has been attacked following Fairfax Media reports that corruption was rife at Leighton's foreign arm, far exceeding incidents in Iraq that Leighton itself revealed to the stockmarket in February 2012. Fairfax also claimed that the scandal-hit company told the Australian Federal Police (AFP) two years ago that it may have breached foreign bribery laws in Iraq but that ASIC had not spoken to any witnesses or suspects since. Deputy Greens leader Adam Bandt and independent Senator Nick Xenophon questioned ASIC's response to the original Iraq case, with Senator Xenophon accusing the watchdog of having been "asleep at the wheel." Labor Senator Doug Cameron, meanwhile, said the case demonstrated the need for change at ASIC, which he said had been arrogant and evasive. Mr Medcraft pointed out today, however, that bribery of foreign officials fell under the Criminal Code 1995, a law largely enforced by the AFP, not ASIC, whose role was limited to probes within corporation legislation. "In the small number of cases where a company is involved in bribery it might mean the directors are liable for breaches of the Corporations Act, for example, their directors" duties," the ASIC boss said. This will be an issue for ASIC. Breaches of directors' duties cases are normally investigated after any criminal investigation because the defendant in the criminal had a right to silence that would be compromised by allowing civil proceedings on the same issue, Mr Medcraft said. My point is that in any foreign bribery investigation, criminal proceedings are the main game. ASIC cannot, and will not, do anything to jeopardise the success of criminal actions, taken by the AFP," he said, adding that this was a point the media had mostly chosen to ignore. It is often extremely difficult to run parallel investigations. It results in duplication of resources and added pressure on witnesses who may already be reluctant to help. In turn, it will typically result in investigators "tripping over" each other - achieving unsatisfactory outcomes for both the AFP and ASIC." He said that there was a good level of cooperation between the AFP and ASIC and there was currently no need for ASIC to use its compulsory powers of investigation. Directors also have a role to play in minimising bribery, he added. "If there is a high risk of bribery, they need to ensure they have appropriate systems, procedures and protocols to mitigate the risk," Mr Medcraft concluded. Fairfax reported last week that it had obtained hundreds of confidential documents related to the Iraq bribery case, including a handwritten note from acting chief executive David Stewart in November 2010 that allegedly showed his predecessor, high-profile executive Wal King, approved a $42 million payment to a firm in Monaco nominated by Iraqi officials for a $750m oil pipeline contract. Fairfax suggested corruption, bribery and serious misconduct at Leighton rife throughout Leighton's international operations, where multi-million-dollar kickbacks were allegedly paid for numerous projects, including the construction of a dam in Malaysia, Mr King has emphatically denied the claims and has sought a public apology from Fairfax, while Leighton has published two statements to the stock exchange defending its corporate governance processes.