Two former executives at Leighton Holdings, Australia’s biggest construction company, face criminal charges in a case linked to a corruption investigation into its past activities in the Middle East.

The Australian Securities and Investments Commission, the country’s corporate regulator, said on Tuesday that Peter Gregg, the former chief financial officer of Leighton Holdings, and Russell Waugh, who worked at the company’s international arm, would face charges.

“Asic alleges that Mr Gregg, as an officer of Leighton Holdings, engaged in conduct which resulted in the falsification of LHL’s books,” it added. Mr Waugh has also been charged in relation to this matter.

Asic is investigating a A$15m payment allegedly made by Leighton to Asian Global Projects and Trading, an UAE group, in August 2011. It is part of broader corruption investigation into the activities of Leighton, which changed its name to CIMIC in 2015.

Mr Gregg denies the charges and is suing Fairfax Media for defamation over its reporting of the corruption investigation by Asic.

A pre-trial judgment on procedural matters in the defamation case states Mr Gregg alleged that Fairfax’s reporting carried imputations that in effect he had engaged in corrupt conduct whilst the chief executive of Leighton by authorising payment of a A$15m bribe to a company run by an allegedly corrupt Indian businessman, Mahesh Khemka.

The December 7 judgment by Judge Rares in Australia’s Federal Court, which dismissed a request by Fairfax to have the defamation case heard by a jury, also stated that the reporting by Fairfax alleged: “Mr Gregg took part in a global bribery racket by authorising that payment.”

The allegations are contested, and Mr Gregg is seeking libel damages over the press reports.

Mr Gregg resigned as chief executive of Primary Health, a A$2bn Australian-listed healthcare company, earlier this month when it emerged he would face charges related to his previous role at Leighton.

Leighton has been dogged by corruption allegations in the Middle East for several years and first reported potential illegal activity at its Iraq subsidiary to Australian authorities in 2012. This prompted a police investigation into the company’s conduct.

Peter Gregg © Getty

Mr Waugh joined Leighton in 2004 and spent several years working in the group’s international arm, including managing its oil and gas business in the Middle East. In 2012 Mr Waugh joined Australian engineering company UGL in a senior executive role. When the corruption investigation into Leighton became public in 2013, Mr Waugh resigned from UGL to “privately defend the allegations made against him”, according to an UGL statement.

In 2013 Mr Waugh denied he was involved in any corrupt activity while working for Leighton. He could not be contacted by the FT on Tuesday.

Fairfax’s report on the alleged A$15m payment by Leighton was part of its investigation into alleged corruption by Unaoil, a Monaco-based company that is the subject of investigations by the Serious Fraud Office in the UK.

Unaoil denies any wrongdoing. CIMIC declined to comment.