THE wealthy businessman John McGuigan has admitted personally negotiating with Moses Obeid, the son of the former Labor MP Eddie Obeid, who wanted a sizeable stake in his coal company.
Giving evidence at the Independent Commission against Corruption, Mr McGuigan said that in late May 2009, he was introduced to Moses Obeid by Greg Jones, a close associate of then mining minister Ian Macdonald.
At that time the government was still considering which companies would win the right to explore for coal in 11 areas the government was opening up for mining.
The commission has heard that the Obeids used inside information allegedly provided to them by Mr Macdonald to acquire key properties in the Bylong Valley which was one of the areas covered by the new exploration licences.
Mr McGuigan, the managing director of Cascade Coal, said Moses Obeid initially wanted a 30 per cent share of Cascade Coal and that he was ”very focused on extracting value” for their three farms in the Bylong Valley. Mr McGuigan said that he did not want the Obeids to be joint venture partners but that they were adamant that access to the properties would be given in return for a stake in Cascade. In the end 25 per cent was agreed upon. The Obeids later negotiated a $60 million payout for this stake. To date they have received $30 million.
Several weeks after this initial meeting Cascade was announced as the winning tender for the Mount Penny licence.
Mr McGuigan also agreed that a highly confidential document about the government’s proposed mining areas was most likely provided to him by the mining magnate Travers Duncan, who was also an investor in Cascade Coal.
The inquiry has heard that Mr Duncan was on friendly terms with Mr Macdonald and the pair often dined together.
Mr McGuigan agreed that the knowledge the Obeids were involved in Cascade Coal would have an impact on any attempt to raise money for a mine at a later date. However, he maintained confidence that the Liberal government would not cancel Cascade’s licence. ”My view was and continues to be that the exploration licence, the rights, that we currently have was validly granted and is not and cannot be in question,” he said.
Commissioner David Ipp then pointed out that the mining minister has an unfettered discretion as to whether to grant a mining lease. At present Cascade has a licence to explore, not to mine.
In other evidence the Obeids’ former farm manager Barry Taylor said, ”I only seen Old Eddie three or four times,” in the two years to March 2010, when he was running their property Cherrydale Park at Bylong.
Mr Obeid snr made a surprise appearance at the inquiry on Tuesday. He and his solicitor watched a live feed of the hearing from a room in the ICAC complex. Members of the public also present said Mr Obeid nodded or shook his head and on occasions muttered what he thought the correct answer was to questions being asked of various witnesses.
Mr Obeid, his wife Judith and son Moses are due in the witness box on Thursday.
The original release of this article first appeared on the website of Shanghai Night Net.