ICAC told of $100m shonky coal deal

An inquiry by the Independent Commission Against Corruption has heard that lucrative coal leases awarded by NSW former mineral resources minister is an example of one of the states most ‘shocking’ corruption cases.

Former Labor powerbroker, Eddie Obeid, has been suspended from the party after allegations that he stood to profit around $100 million as a result of alleged corruption involving mining exploration licences.

During the first day of the inquiry by ICAC it was alleged that in granting the coal licences, former mineral resources minister Ian Macdonald ensured coal assets were being "given away to friends, political supporters and business associates of the minister," SMH reported.

Counsel assisting the inquiry, Geoffrey Watson, SC, said the level and scale of corruption "probably unexceeded since the days of the Rum Corps.”

"In all, decisions taken or influenced by Ian Macdonald may have enabled Eddie Obeid and his family to acquire profits in the order of $100 million," Watson told the inquiry.

"Mr Macdonald's decision has been to confer massive cascading profits upon Mr Obeid and his family,"

“The decisions involved the allocation of lucrative coal mining rights, the conditions upon which those rights would be granted, and the price which would be paid by investors to acquire those rights.”

It has been alleged that Macdonald's decision to open the Bylong Valley to coal mining, rig the tender process and pass inside information to the Obeid family, was part of an elaborate scheme to net massive profits.

"Mr Macdonald's decision greatly enhanced the value" of Mr Obeid's property and of Cascade Coal, Watson said.

Mr Obeid's farm in Mudgee allegedly "quadrupled its market value, granting "windfall profit of over $13 million" to the Obeids, Watson added.

ICAC also heard the Obeids secretly took a "substantial" share in Cascade Coal, the company that purchased their land and won the Mount Penny exploration licence, which was sold for $60 million in 2010.

The family also had a $30 million interest in the nearby Yarrawa tenement, which was also subject to an exploration licence granted by Macdonald.

Former NSW premier, Morris Iemma told the hearing it was ‘unusual’ that Macdonald had limited the tender process and only invited certain companies to participate in the process, saying the decision should have been raised in cabinet.

This morning, the inquiry heard from a former neighbour and friend of the Obeid family, Nicole Fitzhenry, who said Obeid’s son Moses told her his family would make $100million from buying the property known as Cherrydale.

‘‘[Moses] said everything was going ahead and it was going to be a huge windfall for the family,’’ Fitzhenry told the inquiry.

‘‘He said basically that they were going to make $100million.

‘‘He said that it was something to do with coal, leases on the farm, and that they would be making a lot of money.’’

The inquiry is continuing.

Image: ABC

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