Arthur Sinodinos has defended his involvement in Australian Water Holdings (AWH) which has been linked to NSW Labor powerbroker Eddie Obeid.
After a week of intense media pressure, Senator Sinodinos – speaking under parliamentary privilege – admitted he had been prompted to update the Senate’s interests register following press inquiries.
Last week the senator responded to questions put to him by the Australian Financial Review on how AWH became one of the largest donors to the NSW Liberal Party, within days of Mr Obeid’s family contracting to buy a $3 million stake in the company in November 2010.
After the NSW Liberals took power from Labor in the March 2011 election, Australian Water’s value rose to $65 million after it signed a 25-year deal with the state-owned Sydney Water utility, offering what would be a $15 million windfall profit to the Obeids.
The Financial Review’s investigation revealed that in the months before the election, Australian Water gave $73,803 to the Coalition and would have been the NSW Liberal Party’s fifth-largest donor that year. The report also alleges many of the donations were not reported by the Liberal Party.
In his adjournment debate speech on Thursday, Senator Sinodinos said: “I apologise unreservedly to the Senate for these oversights,” he said in his adjournment debate speech.
“What you think is an innocent oversight can be looked on perhaps not as favourably by others.”
Senator Sinodinos, who was chairman of Australian Water is now Parliamentary Secretary to Opposition Leader Tony Abbott, resigned as chairman in October 2011 to enter the Senate, and disclosed a 5 per cent shareholding in the company.
This week he confirmed that he would not be pursuing his entitlement to a share stake, estimated by some to be worth in the region of $3.75 million, though the senator himself says the figure is between $500,000 and $1 million.
Senator Sinodinos’ decision not to pursue his stake distances himself from the Obeid family who face allegations of benefiting from favourable treatment over coal licences by former disgraced NSW resources minister Ian Macdonald. The NSW corruption watchdog, Independent Commission Against Corruption (ICAC) is investigating the matter.
Speaking to the ABC earlier this week Senator Sinodinos said that he had not pursued the shareholding “because of revelations around the management of the company having entered into an agreement with members of the Obeid family to gain, I think it was in the end, a loan .
“And that should have been disclosed I believe to me at the time, which would have been towards the end of 2010.”
After days of media pressure, Senator Sinodinos told the Senate:”I cannot recollect when I first became aware of the involvement of Eddie Obeid Junior … but it was not before I joined the company. I had no reason to regard his presence in the company as signifying some greater involvement by the Obeid family in AWH and I had very limited dealings with him.”
Sinodinos became a non-executive chairman of AWH in early November 2010 and told the Senate that at that time he was not aware that AWH’s CEO “had negotiated what has been reported as a personal loan agreement with members of the Obeid family secured against shares in AWH.
“Obviously I was shocked and disappointed that a company, whose mission I believed in and was passionate about, was financially linked to the Obeid family.”
On his shareholding, which he confirmed he would not be pursuing, Sinodinos said that he characterised it publicly “as a gentleman’s agreement”.
Senator Sinodinos said that on entering the Senate he should have declared several unpaid directorships, including a start-up health care company Move to Live Pty Ltd and Firestick Pty Ltd. He has resigned from both companies.