Sinodinos warned of massive debts
Arthur Sinodinos. Photo: Andrew Meares
Australian Water Holdings has heard explosive claims its chairman,
Liberal Party heavyweight Arthur Sinodinos, was warned it was racking
up massive debts, including tens of thousands of dollars in donations to
the Liberal Party.
The evidence of AWH investor Rod De Aboitiz, who appeared
at the Independent Commission Against Corruption on Thursday,
contradicts long-standing claims by Senator Sinodinos he was unaware
the company was making donations to the Liberal Party.
Mr De Aboitiz told the ICAC he confronted Senator Sinodinos,
then non-executive chairman of AWH and honorary treasurer of the NSW
Liberals, in May 2010 about ''out of control'' costs at the company.
He said he was concerned the directors were paying themselves
''extremely high'' salaries and racking up excessive costs. He said he
told Senator Sinodinos: ''Arthur, you know that solvency is a big issue
for a director.'' Mr De Aboitiz said Senator Sinodinos ''assured me
that the board was on top of it''.
Asked if he was comforted by that assurance, Mr De Aboitiz said: ''It's Arthur Sinodinos. Of course I was comforted.''
AWH was then locked in a dispute with the state-owned Sydney Water about $2 million in costs.
Sydney Water had contracted AWH to provide infrastructure in
Sydney's north-west and had agreed to cover the costs, but had become
suspicious about how the money was being spent.
The ICAC has previously heard AWH was billing Sydney Water
for chauffeur-driven limousines and more than $75,000 in donations to
the party.
Mr Aboitiz said he emailed Senator Sinodinos setting out
some of the excessive costs. ''At that time there was $20,000 that I
think was owing to the Liberal Party,'' he said.
Mr Aboitiz said there were also payments to ''a company
called Eightbyfive'', which allegedly was a slush fund linked to former
Liberal minister Chris Hartcher.
Mr Aboitiz said the remuneration package awarded Mr
Sinodinos when he was appointed non-executive chairman suggested he took
an active role in the business.
Mr Sinodinos was awarded a 5 per cent stake in the company
and promised a 2.5 per cent bonus if the NSW government accepted a
public-private partnership proposal.
''If you're getting a bonus and a bonus of this size,
wouldn't it suggest … that you're driving [the business] in a much more
hands-on than arm's length fashion to earn or activate such a bonus?''
Mr De Aboitiz said.
The ICAC is investigating allegations the family of corrupt
former Labor minister Eddie Obeid secretly owned 30 per cent of AWH, and
that Mr Obeid lobbied colleagues to favour the company.
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