litigation coming: 4corners transcript Between now and then it...

litigation coming: 4corners transcript Between now and then it will be besieged by litigation. Read this from the 4Corners program:

Read the transcript of Ticky Fullerton's investigation into Multiplex, "Road to Wembley", broadcast on 5 September, 2005.

Date: 05/09/2005

TICKY FULLERTON: In late November last year, a group of top Australian investment advisers was invited to London for a guided tour. Their host was the talk of the town, Australian builder and property developer Multiplex.

PAUL PAVLIDIS: Multiplex was receiving a lot of support by the market. Its price was appreciating on a daily basis. Everybody wanted to get in.

TICKY FULLERTON: Multiplex was one of the top performers on the Australian stock market. In six months, news of its big overseas projects had pushed the shares up 30 per cent. The highlight of the tour was Multiplex's prized contract to rebuild Wembley Stadium, the spiritual home of soccer.

SIMON SCOTT: We had a site tour of Wembley, we drove around the pitch and the outside, saw the structure being put in place.

TICKY FULLERTON: Nearby, there was a formal presentation. At the time, Multiplex was raising hundreds of millions of dollars from investors. There were rumours that Wembley was in trouble. Investors needed to know how safe their money would be.

ANDREW PARSONS: We just wanted to hear it straight from the mouths of management that everything was okay, and we were given that assurance.

TICKY FULLERTON: The visitors left Wembley with Multiplex footballs. But in February this year, Multiplex turned from market darling to market disaster. The Wembley profits disappeared.

TICKY FULLERTON: What happened after the February results came out?

PAUL PAVLIDIS: Its price crashed.

ANDREW PARSONS: That business raised over $2 billion of other people's money in the previous three or four months on what's turned out to be inaccurate information.

TICKY FULLERTON: Did you mislead investors over Wembley?

ANDREW ROBERTS: No. Certainly not.

TICKY FULLERTON: Tonight, a Four Corners investigation into the machinations at Multiplex that have now sparked an inquiry by Australia's corporate watchdog - new evidence on sensitive inside knowledge at the company. Just what did Multiplex know, and when? Four Corners approached Multiplex two months ago and travelled to Britain for this story. But until last Wednesday, the company would not appear in our program. It was, we were told, an old story. And Multiplex building sites were off limits.

WORKER: This is our side. Multiplex's side - on that chevron, on the other side.

TICKY FULLERTON: Didn't know that.

WORKER: Could you please leave our site?

TICKY FULLERTON: Last Tuesday, Four Corners' lawyers took on Multiplex in the British High Court to force the company to disclose details of a crucial legal battle. In Australia, these details would be open to scrutiny. The judge agreed with Four Corners, giving access to new information. Until two years ago, Multiplex did not have to account to the public. It was a very private company with a proud 40-year track record in construction. Building is a tough business. The deals are big, perhaps billions of dollars, but so are the costs. So the profit margins are tiny. A miscalculation can wipe out profits or deliver big losses for a company. Multiplex was founded in Perth in 1962 by businessman John Roberts.

ANDREW PARSONS: He kept a very low profile and so not a lot was really known, particularly by today's young analysts, about John Roberts, who is a very private...But certainly known as a very astute and tough negotiator.

JUAN ANTONIO SAMARANCH: That is the most impressive stadium I have seen in my life.

TICKY FULLERTON: It was Sydney's Olympic stadium in the year 2000 that lifted John Roberts and Multiplex into the international league. This was the perfect showpiece to pitch for an even bigger sporting icon overseas. The great Wembley Stadium, home to British soccer, was supposed to be the trophy project for Multiplex in its assault on the British market. Instead it turned into its worst nightmare, with claims of losses topping perhaps £100 million - that's $240 million. But it's the uncertainty of exactly what those final losses will turn out to be that has been so damaging for Multiplex.

BRASS BAND PLAYS

TICKY FULLERTON: For English footy fans, Wembley is hallowed ground, England's MCG. They've been shut out for five years while Wembley gets a massive facelift. And Multiplex was on a promise to finish it in time for the FA Cup in May next year. We're doing a story about Wembley.

MAN: I'm from Wembley.

TICKY FULLERTON: You're from Wembley!

MAN: Yeah.

TICKY FULLERTON: Do you reckon the stadium's going to be finished for the FA Cup?

MAN: No. Because I went there last night, actually, because I live near there. And I said to my missus, they're going to struggle.

TICKY FULLERTON: You think so?

MAN: Yeah, seriously.

TICKY FULLERTON: We're doing a program on the Wembley Stadium which is being constructed...

MAN2: It's over there.

TICKY FULLERTON: I wonder if you thought it was going to finish on time for the FA cup next year?

MAN3: It won't finish on time for the FA Cup next year. No, it won't.

MAN4: For all fans of football, Wembley is...It's a temple of football, if you like. Definitely.

MAN5: It's British people building it. Australian company owns the company, British people are building it.

TICKY FULLERTON: That's right.

MAN5: It'll be finished. You might lose a couple of quid on it, though.

MAN6: 22 million so far, and rising, isn't it?

MAN5: But, hey, it's a good stadium.

TICKY FULLERTON: Out at the stadium, no-one would talk. On-site workers told us they could be fired under their contracts for speaking to the media.

DAVID ROGERS: Well, Multiplex, we got interested in them when they won the Wembley job, really.

"AWG Construction Services is Morrison now, isn't it?"

TICKY FULLERTON: David Rogers has been on Multiplex's case for five years. His relentless reporting for a British building journal, 'Construction News', makes him a key player in the Multiplex story.

DAVID ROGERS: I think they prided themselves initially when they came over as... They're sort of the Millwall of construction. There was an element...Millwall is an English football team whose motto is "No-one likes us, we don't care."

CROWD SINGS ANTHEM

CROWD CHEERS

TICKY FULLERTON: It was the very low price that John Roberts bid for the Wembley contract that put British noses out of joint. He landed the deal. It was an aggressive bid that left little room for error.

DAVID ROGERS: People who know Multiplex because they've built Stadium Australia, and I think that people in this country kind of felt like it's this, sort of, typical Australian swaggering over here - bit like your cricket team - and coming over and teaching the Poms a lesson.

MAN: The encouraging of inner city residential to come back...

TICKY FULLERTON: John Roberts was known as a savvy networker with a can-do style. By late 2003, his business had a turnover of $2.3 billion. He decided to take Multiplex public. His son, Andrew, was Chief Executive. In December, Multiplex shares floated on the Australian Stock Exchange on a two-payment basis closing on the first day at a total $4.09.

MAN: 12.4 per cent premium to...

TICKY FULLERTON: Like 9,000 other small shareholders, John Corrigan bought
shares in the float. After a career in the public service, he's retired and relies on investments for his entire income.

JOHN CORRIGAN: According to all reports they were a very successful private company. And... if the... There was nothing to indicate that that situation wasn't going to continue in its public form.

TICKY FULLERTON: The public float gave John Roberts, Chairman of Multiplex, over half a billion dollars in shares. But with public money invested comes public accountability. So if you go from a private company to a public listed company would that be quite a culture shock?

PROFESSOR IAN RAMSAY: Oh, I have no doubt that it would be a culture shock. And, of course, it would also require internal changes to ensure that there is compliance with new disclosure obligations and that, of course, would be the case for companies that choose to list on the ASX.

TICKY FULLERTON: Private companies can sometimes bury bad news. But public companies must by law reveal all material problems to investors. And losses can have a disastrous impact on the share price. It was the growing troubles at Wembley that are now the subject of serious questions about disclosure by Multiplex. At the centre of the drama, the reported £60 million contract to build the steel roof and the 130m high steel arch that can be seen for miles.

DAVID ROGERS: It's the arch that goes over the stadium. It's fairly obvious which one the arch is. But the arch was built to replace the twin towers, 'cause Wembley's famous...The old Wembley was famous for its twin towers and they needed something iconic to replace the twin towers. So they got the arch in.

SIMON SCOTT: It was a very complicated steel structure that was around both the roof and the arch that goes across the whole stadium. It was something that hadn't been done before.

TICKY FULLERTON: Six weeks ago in England, Four Corners travelled north to track down the company Multiplex had hired to build the arch.

MAN: This service is now approaching Newcastle where it will terminate.

TICKY FULLERTON: Newcastle lies in the heartland of the British steel industry, where Cleveland Bridge has been a steel builder for 128 years. Among its projects, the bridge over Newcastle's Tyne River. And if that looks familiar, it's for good reason. Cleveland Bridge built the Sydney Harbour Bridge. It must be a galling reminder for Multiplex whose Sydney office is just metres away. Cleveland Bridge is now its arch rival.

TICKY FULLERTON: So why did Cleveland Bridge and Multiplex begin to fall out?

DAVID ROGERS: Well, it depends which side of the story you want to believe or whose version it is. According to Cleveland Bridge, they weren't being paid. And they were being asked to work and they weren't being paid. And they were saying that the design of the arch kept changing.

ANDREW ROBERTS: From our perspective Cleveland Bridge undertook to take on the works for a certain price and for a certain time and ultimately sought to change that...that bargain.

TICKY FULLERTON: Cleveland Bridge had 250 workers at this yard, sweating on Wembley. It sent a letter in December 2003 warning Multiplex of rising costs and a delay on the steel job of almost a year due to design changes which Multiplex rejected. This was just three days after the public float of Multiplex. Cleveland Bridge was short on cash. But it did have a powerful shareholder - Saudi businessman Sheikh Abdullah Al-Rushaid. In January 2004, the sheikh had a meeting with John Roberts in London to sort out Wembley. According to one executive present, the sheikh was so offended by John Roberts he determined to bankroll Cleveland Bridge in its fight with Multiplex, pouring in £12 million.

By April last year, there were reports of other problems. Faulty concrete around the foundations of the arch had to be blasted out and reset. Tensions between Multiplex and Cleveland Bridge were rising. But the arch - scheduled to be up in March - was still on the ground. It was imperative that Cleveland Bridge, which actually welded the steel, put up the great arch. But once the job was complete, Cleveland Bridge was unceremoniously removed from the project. Since then the bitterness between Multiplex and Cleveland Bridge has been something rarely seen in the British construction industry.

DAVID ROGERS: This is the main package. It's the steelwork. It's the arch. It's the roof. And they've gone halfway through the job. And they haven't gone quietly. They've had a huge blazing row. There's writs flying all over the place.

WORKER: That timber Johnno put down here - where is it? Frank, where's that two-by-two that was down here?

TICKY FULLERTON: In July last year, Cleveland Bridge left Wembley and laid off 150 workers. But as a result Multiplex lost its locked-in fixed price contract with Cleveland Bridge for the Wembley steel job. With the huge roof still to do, Wembley was now a risky business. There were strikes and delays as Cleveland Bridge's replacement came to grips with the job.

SIMON SCOTT: The combination of rising steel costs, having to take that labour force on board and also the delays in not getting the steelwork completed on time, that has a ripple effect through the rest of the construction project so it puts some of your other contractors behind. So that combination really led to the cost blowing out significantly.

TICKY FULLERTON: Despite the delays all through last year Multiplex insisted that Wembley would be finished by January 2006 AND to budget. At the gala to celebrate the arch, David Beckham was invited. But one party was not. The party who built it - Cleveland Bridge. By now, Multiplex was hardly recognizable from the old private building company. It landed another contract in London, at White City, to rebuild a huge area near Shepherds Bush. But it was also rushing into property development and property investment in a broadside assault on the British market.

ANDREW PARSONS: It's fair to say that it was probably a bit of a blitzkrieg.

TICKY FULLERTON: In terms of both timing and size...?

ANDREW PARSONS: Oh, they just seemed to be doing deal after deal. And announcing an enormous sort of pipeline of opportunity...in a very short period of time. So it must have been putting enormous pressure on their internal organisation. No doubt about it.

TICKY FULLERTON: If there were pressures, late last year, investors were blissfully ignorant. But rather than take stock, Multiplex management launched into another new deal. A $1.2 billion deal. Multiplex's target was Ronin, a portfolio of Australian office buildings which sat in a property trust. Unlike the construction business, property trusts are low risk with a steady income stream from rentals. Multiplex wanted to buy some security.

JOHN CORRIGAN: The offer is at a premium to what Ronin's shareholding was before the takeover was made.

TICKY FULLERTON: The owners of Ronin ranged from the AMP to small investors like John Corrigan. Multiplex offered him and other Ronin investors shares in Multiplex, in exchange for their Ronin investments. On advice from his brokers, John Corrigan agreed to the swap.

JOHN CORRIGAN: When UBS and...and the Multiplex Board are stating that your distributions are going to increase and you are going to get a better capital appreciation, well, on the face of it, it's pretty hard to go against that.

TICKY FULLERTON: At the time, the Multiplex share price was $5.14. The shares are worth nothing like that now. It was a great deal for Multiplex.

ANDREW ROBERTS: Ronin has complemented existing assets well, and provided us sort of the critical mass in the property investment area.

TICKY FULLERTON: And you you bought it with Multiplex shares near the, near a high, didn't you?

ANDREW ROBERTS: Um...we bought it with...so, with cash consideration and Multiplex shares, yes.

TICKY FULLERTON: Those Multiplex shares presumably have gone down quite a lot since then. How do the owners of the old Ronin...

ANDREW ROBERTS: They, they've gone up and down since then, that's right, yes.

TICKY FULLERTON: Paul Pavlidis's firm, Property Investment Research, follows listed property trusts for its clients. Like many in the market, he saw Multiplex as a good bet, with an exciting growth story from its rapidly expanding overseas businesses.

PAUL PAVLIDIS: Multiplex...it looked very promising. The earnings potential, the, I guess, the diversity of its income streams...the management, its history, it all looked great on paper.

TICKY FULLERTON: Because you suddenly found yourself with a listed property trust with a lot of upside?

PAUL PAVLIDIS: Absolutely.

TICKY FULLERTON: But the potential for profits came largely from construction, a riskier business. In weighing up that risk, Australian analysts place a lot of faith in what management tells them. But late last year, the main news flow on Wembley was coming from a London trade journal. In October, claims by 'Construction News' that Wembley was six months behind were flatly denied by Multiplex. But Andrew Parsons was not so sure. He's been analysing property companies for almost 20 years.

TICKY FULLERTON: So, were you looking at 'Construction News' as much as you were looking at what Australian analysts were saying?

ANDREW PARSONS: Oh, absolutely, I mean, that's part of our job, we can't just rely on what we're told. We have to go out and do our own research. And unfortunately in this case it seems as though, um...the UK analysts were correct.

TICKY FULLERTON: The UK 'Construction News' analysts?

ANDREW PARSONS: Yes.

TICKY FULLERTON: So, journalists, effectively?

ANDREW PARSONS: Journalists, yes.

TICKY FULLERTON: By early November, the row with Cleveland Bridge got nastier. Multiplex lawyers travelled all the way to Newcastle to serve Cleveland Bridge with a writ claiming £22 million. Cleveland Bridge claimed it was owed £21 million. Multiplex told the Stock Exchange it was highly confident about its case. So far, though, Cleveland Bridge has won two out of three adjudications. The full court case is next April. As the parties squared off, the Multiplex share price was rising. The company could not afford bad news to come out about Wembley that might put off investors. Because to complete the huge deals in the pipeline, Multiplex needed to refinance its loans and raise a lot of new money from investors.

ANDREW PARSONS: Well, around about that period of time, they were effectively raising from the market around about $2 billion of Australian investment funds.

TICKY FULLERTON: $2 billion?

ANDREW PARSONS: Effectively when you take into account the Ronin takeover and the assets underlying that business, as well as other equity capital raisings taking place and debt securities being raised at the same time, it all adds up to over $2 billion, yes.

TICKY FULLERTON: Multiplex planned to raise millions on the back of its escalating share price. As part of the pitch, in November Australian analysts were invited on a tour of Wembley. With rumours growing in the trade press about Wembley losses, Andrew Roberts was asked a key question - was Wembley okay?

ANDREW PARSONS: Management indicated that yes, they acknowledged there had been problems. It was the problems that the contractor just wasn't up to the job, they'd been replaced. A new steel contractor had come in, shown them ways of saving time and money. And the project was now back on track. So, we got back in the bus and headed off.

TICKY FULLERTON: To raise nearly half a billion dollars, Multiplex released a detailed prospectus five days after the Wembley visit. It's just one of the documents that Australian regulators may now be scrutinising, especially the forecast of what the year's profit might be.

What do you particularly look at inside a prospectus? Which bits of it do you look at as an investor?

JOHN CORRIGAN: Well, the first thing I look at is the...the forecasts for the income.

TICKY FULLERTON: The forecasts?

JOHN CORRIGAN: Forecasts for income.

TICKY FULLERTON: In Multiplex's 2005 forecast, approved by the directors, there was nothing to indicate that Wembley was not on track. This is very important. If, during the offer, management knew of serious losses that would affect the forecast - and potentially the share price and the fundraising - coming clean on Wembley was not just a moral or financial issue, it was a legal one.

PROFESSOR IAN RAMSAY: If in fact a company becomes aware of information that means that a current prospectus, for example, has a material omission in it or a material misstatement, or there's new material circumstances that arise, then the obligation upon the company is to either issue a new prospectus, or to issue a replacement prospectus or a supplementary prospectus.

TICKY FULLERTON: Or, presumably, just pull the existing prospectus altogether.

PROFESSOR IAN RAMSAY: Another option would be, of course, to withdraw the prospectus and return any monies received to the investors.

TICKY FULLERTON: Penalties for prospectus breaches under the corporations law can mean fines or up to five years in jail. What's more, stock exchange rules require that companies disclose all new material information that might affect the share price right away.

PROFESSOR IAN RAMSAY: For example, material changes to a company's forecast or expectations in terms of financial matters. In particular, for example, whether a company, uh...is expecting that there will be significant changes to either profits or losses.

TICKY FULLERTON: Back in Australia, one month later in December, there was another group who relied on private assurances by Multiplex. The Property Investment Research team.

PAUL PAVLIDIS: Mid-December, my colleague and I flew up to Sydney and met with senior Multiplex management. You'd like to think they can't get the trust side wrong. I mean, it's only property rentals.

TICKY FULLERTON: And what did they tell you specifically about Wembley?

PAUL PAVLIDIS: Wembley...they were very confident that there were no cost overrun issues.

TICKY FULLERTON: So, Wembley was going to be running at a profit?

PAUL PAVLIDIS: At a profit. On schedule.

TICKY FULLERTON: What did they say about the chief executive officer, Andrew Roberts, and the chief financial officer?

PAUL PAVLIDIS: They specifically said that they know their business backwards.

TICKY FULLERTON: And you took that at face value?

PAUL PAVLIDIS: Well, of course. I left that meeting thinking that it was a wonderful growth story and that's what we advised our clients as well.

TICKY FULLERTON: Many investors relied upon statements by Andrew Roberts and his CFO, John Corcoran, seen here. And by law, the prospectus, with forecasts that appear to assume Wembley was on track, had to be accurate at least until 17th January, when the offer to investors closed. But an internal Multiplex budget on Wembley from late January is now in the hands of Four Corners. The cover memo says the budget, sent by the Wembley project director, is for discussion with JCR, the initials of John Roberts. It's a complex document but essentially, it contains two very different sets of numbers on Wembley.

First, there's the JCR costs. Next to that is the likely site view. That's typically how site managers see the real costs of a project. Both versions predict heavy operational losses. Multiplex plans to offset these losses by winning claims from subcontractors. The best-case scenario, the JCR view, is a £13 million profit. But the site view is much worse. Without successful claims, it's a loss of nearly £87 million. And even with claims, it's a loss of nearly £48 million. Remember, just 14 days before, the prospectus had left the public thinking that Wembley was on-track. So if the site view's correct, it beggars belief that a £48 million loss could have been suddenly discovered in just two weeks.

Four Corners can't say that a discussion with John Roberts took place or who else saw the document, but no losses were announced to the market. In February, Multiplex's banker, UBS, valued the shares at a heady $6.60.

ANDREW PARSONS: The share price was being driven by brokers, a couple of brokers, who were almost playing leapfrog to see who could have the highest valuation on the stock.

SIMON SCOTT: There were investors and brokers who certainly liked the story very much, so they promoted it aggressively to their client base.

TICKY FULLERTON: Even more conservative analysts like Simon Scott were still forecasting profits.

SIMON SCOTT: There would have been a profit of at least $25 to $30 million Australian.

TICKY FULLERTON: Did you make any investment in Multiplex personally?

PAUL PAVLIDIS: About a month after our meeting with Multiplex management, I thought that it was appropriate to make a small investment. Bad timing.

TICKY FULLERTON: About four weeks after the internal budget, Multiplex changed its story on Wembley. At a half yearly presentation, Andrew Roberts told analysts Multiplex would still finish the job on time - January 2006 - but it was no longer in profit. And it would only break even once claims had been settled. The news was a shock to the market. Shares dropped a dollar in the space of the meeting. They finished the day down 16 per cent. But the shock could have been worse. All the while, no mention was made of Wembley's £48 million loss estimated by the internal document. Paul Pavlidis's firm had been predicting a $40 million profit.

So $40 million was changed to no profit at all?

PAUL PAVLIDIS: That's correct. In the space of several weeks, since we had last met with management.

SIMON SCOTT: They had tried to correct the situation but they just simply didn't get the level of productivity that they expected to get up to speed.

TICKY FULLERTON: They must be cursing that arch.

SIMON SCOTT: Yes, that was one of the significant issues but also the rest of the steelwork around the roof certainly was more complicated than expected.

PAUL PAVLIDIS: There were two possible scenarios in our mind. Either Multiplex management genuinely didn't know about these issues but we felt that they probably should have. The other issue, I guess is...did they possibly know about these things and not announce to the market as early as maybe what they should have.

TICKY FULLERTON: Neither of these scenarios are particularly complimentary to Multiplex, are they?

PAUL PAVLIDIS: No, unfortunately not.

TICKY FULLERTON: So there were no significant concerns coming up through the ranks at or before that time about major losses on Wembley?

ANDREW ROBERTS: On any project in our portfolio, there's always a range of discussion and debate in relation to both the costs and the revenues and, ultimately, the project position. I mean, that's always the case. And with a project of Wembley's complexity, it was certainly the case.

TICKY FULLERTON: But nothing significant enough for you to report to the market at the February accounts?

ANDREW ROBERTS: No, at the February accounts, we provided what we thought was the best estimate of the position since then.

TICKY FULLERTON: What happened next surprised everyone. On the last day of February, the Roberts family pledged to put up $50 million of its own money
against any future losses on the Wembley project.

DAVID ROGERS: Obviously the Roberts family is the largest shareholders. But it was effectively sort of - it was still seen as if they were still being run in a private way in the way that they were before they listed on the stock exchange. Suddenly the owner bails them out and says, "By the way, don't worry about it, lads. We'll shore up those losses with my £20 million."

TICKY FULLERTON: The Roberts family indemnity again raises concerns about disclosure. In fact, John Roberts had first made an offer to the Multiplex board on the second of February, three weeks before his son, Andrew, had announced that Wembley would only break even. Multiplex says it was an expression of confidence in Wembley.

PAUL PAVLIDIS: It certainly made me think about whether they were trying to provide some compensation for something that they knew had gone wrong at that stage.

TICKY FULLERTON: Things had gone wrong. Someone in Multiplex had blown the whistle. In mid-February, Multiplex's accounting group general manager raised concerns about the February accounts. In the week leading up to the results, he wrote to members of the board and contacted ASIC, the corporate regulator. ASIC launched an investigation.

But when the accounting group general manager came to senior management and said that he had these concerns, did you take him seriously?

ANDREW ROBERTS: Of course. And, I mean, not just his concerns. I mean, at the time there were concerns of others in, in, both accounting and also, importantly, in relation to site and senior construction management.

TICKY FULLERTON: Between last November and January, Multiplex raised around
$900 million from investors and gained a stable of quality properties worth over a billion in exchange for shares.

Had the information that we know now about Multiplex been available in November,
what do you think the share price would have been?

ANDREW PARSONS: Well, given the response of the market when they did become aware of the problems in the business, I think it's fair to say it would be substantially below that. And the opportunity to raise money would have been very, very difficult for them. It's pretty clear to us that they wouldn't have been successful in acquiring Ronin and certainly wouldn't have approached the market to raise additional funds until the problems had been sorted out.

TICKY FULLERTON: Did the account group general manager actually raise his concerns before your major fundraisings late last year?

ANDREW ROBERTS: Um, I believe that there was examination in relation to the Wembley position and other project positions in the portfolio. Certainly...obviously...

TICKY FULLERTON: But did he raise those concerns?

ANDREW ROBERTS: Yes, there would have been concerns raised by him and...discussion and debate.

TICKY FULLERTON: Now, now, none of that was made public at the time. Why, given the importance of his role?

ANDREW ROBERTS: Well, there's discussion and debate that continues in the normal course, on all our projects, on a regular basis. I mean, ultimately...

TICKY FULLERTON: But you're a public company now, aren't you?

ANDREW ROBERTS: Yes...

TICKY FULLERTON: So this was something worthy of disclosure?

ANDREW ROBERTS: Well, ultimately, it's a view of senior construction management and those experienced to make an assessment at that point in time. Now, now, if, ultimately...positions deteriorate and, and...

TICKY FULLERTON: Well, they did. They did, didn't they?

ANDREW ROBERTS: Yes, they did.

TICKY FULLERTON: Andrew Roberts won't comment on the ASIC investigation. The accounting group general manager told Four Corners he also could not comment for legal reasons. In late March, he was retrenched. At the end of our interview with Andrew Roberts, we just had time to ask him why.

MAN: That's the 20 minutes, sorry.

TICKY FULLERTON: Sorry, one last question. The accounting group general manager was retrenched. Can you tell us why? He was retrenched in March. Can you tell us why?

ANDREW ROBERTS: Um, I understand that he was redundant but by mutual agreement. I mean, there's...that...If the suggestion is that there was...he was retrenched because he's raised issues, then, absolutely, that's not the case.

TICKY FULLERTON: Despite the February shock some investors like John Corrigan held on to Multiplex shares on their broker's advice, assuming the worst was over.

So did you buy again?

JOHN CORRIGAN: Yes I did.

TICKY FULLERTON: You bought again?

JOHN CORRIGAN: I bought the next day because the price had come back somewhat but I thought this was a good buying opportunity so I didn't buy a lot but just enough to round up my holding to 7,000.

TICKY FULLERTON: In late May, Multiplex confirmed what the internal January document had warned four months earlier. Wembley was not in profit, nor was it break-even, it was a massive loser. On the Friday share trading was halted. John Roberts resigned as chairman of the company he had founded 43 years earlier. Losses were flagged, but Multiplex head office in Australia would not give a figure until the Monday. So on Friday in London it was left to the UK management to face the media.

REPORTER: Can you reassure football fans and the authorities in the UK that Wembley will be ready on time?

MARTIN TIDD: I can absolutely guarantee that the FA Cup will be held here at Wembley and I can absolutely confirm that my seat is there and I'll be sat there.

TICKY FULLERTON: The next Monday in Sydney, the new loss was finally announced at an estimated £45 million, just shy of the £48 million loss from the internal January document. When share trading resumed, the price plummeted to a record low of $2.56. Compare that to what Multiplex's banker, UBS, was telling the market in February - $6.60. Furious fund managers who bought the sales pitch have since put UBS on a brokerage holiday. At 'Construction News' David Rogers reported that the UK management of Multiplex had expected much bigger losses to be made public based on his own source at Wembley.

DAVID ROGERS: Yeah. Somebody at Multiplex, a credible source who is, yeah, credible...

TICKY FULLERTON: And would be in a position to know these sorts of things?

DAVID ROGERS: Yeah. I think Multiplex UK thought the losses would be somewhere in the region...I think...they were surprised, I think, from what I know, they were surprised they were announced at 45. I think they were expecting them to be around about 70, 75 million.

TICKY FULLERTON: And there were claims of up to 100.

DAVID ROGERS: There were claims...Million...of up to 100 million. That's what I've been told. I mean, some people have even said it could be even higher than that.

ANDREW ROBERTS: In terms of some of the numbers that I've seen bandied about in media and so on, we certainly believe that they're not circumstances that could possibly arise.

TICKY FULLERTON: Shareholder John Corrigan finally lost faith in Multiplex in July. He sold his investment, wearing a loss of over $12,000.

JOHN CORRIGAN: Well, clearly there was a problem with management. They've acknowledged that themselves in the press and they're trying to remedy that right now. Well, it's a pity we didn't know about that at the start.

TICKY FULLERTON: But for a third time, and very recently, Multiplex has let investors down.

TICKY FULLERTON: You had another meeting with Multiplex, didn't you?

PAUL PAVLIDIS: That's right. In July, mid July.

TICKY FULLERTON: And what did senior management assure you of at that stage about Wembley?

PAUL PAVLIDIS: The key thing behind Wembley was that they expected no further cost overruns and that there would be a staged delivery between January and March next year.

TICKY FULLERTON: On 18th August, analysts trouped into the Stock Exchange for the Multiplex annual results. Outside the presentation we watched the share price fall as Andrew Roberts and his CFO explained the disappointing results. The year's profits were down 40 per cent on what the January forecast told investors. While the profit and the forecast are calculated differently, Andrew Roberts confirmed to Four Corners that the lion's share was down to Wembley and a further $9 million is now set aside for future Wembley losses.

ANDREW PARSONS: Well, ultimately somebody has to be made accountable. And we've got a situation where, you know, the Australian investment community and the Australian public, through compulsory superannuation, has no choice but to invest their money. So if we find a situation as serious as you're suggesting, I think that somebody has to be made accountable. The problem that we have is that we've had investment banks, auditors, independent experts and management all effectively approve of these capital raisings by signing off on previous accounts and raising money.

TICKY FULLERTON: And Multiplex told Four Corners that losses are not limited to Wembley. There have been more in the UK and in Queensland. Andrew Roberts says all loss-making projects except Wembley will be finished in a month. But there are signs that these losses and Multiplex's massive buying spree left it short on cash. This year it's even sold one of the old Ronin offices. Also gone, the share in the White City development and part of another huge London project. These London sales have been given the thumbs up by analysts who say Multiplex was over-stretched. One deal that should be a winner is Multiplex's investment in the massive development site for the London Olympics at Stratford, with potential for big construction contracts including the Olympic Stadium.

Does your firm know much about the big projects that are going on in the UK?

PAUL PAVLIDIS: We model all the major projects.

TICKY FULLERTON: Are you confident that you know there are no more Wembleys in there?

PAUL PAVLIDIS: We wouldn't be able to say that with certainty.

TICKY FULLERTON: Tonight we have investigated just one project. But there are much bigger deals in Multiplex's pipeline, like an interest in a multi-billion dollar development in Gibraltar and other billion dollar projects in London. For all the upside to the market, the question hanging over Multiplex is credibility, as the British media reminded viewers just two weeks ago.

REPORTER: The pressure is on Multiplex. The stadium is already two months behind schedule. It's now due to be handed over to the FA on the 31st of March. The FA is taking no chances. It's booked the Millennium Stadium in Cardiff. It's hosted the final for the last five years and was the setting for @rsenal's win in May.

DAVID ROGERS: They've gotta get the steelwork finished on time. They've gotta have no problems with the arch. They cannot afford to have any problems with the arch. They've also got to have a fair wind with the weather because they are gonna be working over the winter.

TICKY FULLERTON: Do you reckon it's going to be finished by the time the FA Cup comes around next year?

MAN: Yes.

TICKY FULLERTON: Why are you so sure?

MAN: Because we finish things like that.

TICKY FULLERTON: It's actually an Australian company that's building it, Multiplex.

MAN: Well, I didn't say they'd be there at the end. The stadium will be finished.

ANDREW ROBERTS: Wembley has been very, very disappointing at a personal level, a professional level and for the company as a whole. And we are going to significant measures to ensure we never have a repeat in relation to Wembley, but, you know, the fact is, it has deteriorated and deteriorated significantly.

TICKY FULLERTON: Even when the stadium is finished the ghosts of Wembley may continue to haunt Multiplex. ASIC is silent on its investigation. But if the market was misled there will be a red card for Multiplex.


Please note: This transcript is produced by an independent transcription service. The ABC does not warrant the accuracy of the transcript.