(Reuters) – Downer EDI Ltd said on Friday Chairman Mark Chellew has resigned and the Australian engineering contractor elected deputy Mark Menhinnitt as the acting chairman.
The resignation follows a public inquiry launched by the New South Wales (NSW) corruption watchdog on Thursday to investigate allegations that certain Downer employees obtained personal benefits by favouring subcontractors for contracts awarded by the transport department.
The public inquiry by the NSW Independent Commission Against Corruption is due to start on March 20.
Michael Ferguson stepped down as the chief financial officer on Wednesday, and Grant Fenn had resigned as the chief executive officer and managing director last December.
Shares of the Australian company fell in early trade, but then reversed direction to gain 1.5% against a higher broader market.
In the past, the company has reported accounting irregularities in its utilities segment that involved the overstatement of the progress of work orders under a contract for which revenue was recorded prematurely.
The company had said the misreporting was not replicated elsewhere.
($1 = 1.4857 Australian dollars)
(Reporting by Savyata Mishra in Bengaluru; Editing by Maju Samuel and Sherry Jacob-Phillips)
