Moody's: Leighton resignations credit negative

Moody's Investors Service said news by Leighton Holdings Ltd. that the chairman and two non-executive directors have tendered their resignations is credit negative.

The board members resigned following concerns about the company's relationship with 54% shareholder, Hochtief AG, Moody's said.

However, ratings and outlook remain unchanged at present, the agency said.

"While it is too early to draw any firm conclusions, this is nevertheless a highly unusual event for such a public company and we have previously noted that the independent operation of Leighton and therefore as a consequence also, its board composition and control, is an important consideration for the Baa2 rating," said Ian Lewis, a Moody's analyst.

Lewis said the agency has concerns that the board's independence could be threatened or Hochtief could form a controlling vote on Leighton's board. This would result in a reassessment of Leighton's rating and outlook, the analyst said.

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