TWO of notorious former MP Eddie Obeid's sons face civil charges for allegedly rigging a tender in 2009 for a coal exploration license under their farm at Mount Penny that earned the family $30 million.
The Australian Competition and Consumer Commission (ACCC) has started action in the Federal Court on Monday against Moses and Paul Obeid, and their related companies.
It has also started proceedings against Cascade Coal and Cascade executives John McGuigan, Richard Poole and James McGuigan.
The ACCC says an Obeid-related company called Loyal secretly agreed to withdraw from a competitive tender for the exploration license under the Obeid's Mount Penny farm. This withdrawal had the effect of allowing Cascade to win the tender.
As part of the deal, Cascade allegedly promised to give the Obeid-linked company a 25-percent stake in the Mount Penny mine venture and promised to buy the Obeid farm for four times its value.
After Cascade won the tender it is alleged that a series of deals involving Mr Poole transferred $30 million to beneficiaries of the Obeid Family Trust No. 2, including Paul and Moses Obeid and their immediate families.
"This case involves serious allegations of cartel conduct. Stopping cartel conduct is an ACCC enforcement priority as it causes harm to both consumers and to the competitive process," ACCC chairman Rod Sims said.
The ACCC said it had decided to bring civil rather than criminal charges because most of the conduct occurred before July 24, 2009 when criminal penalties were added to anti-cartel laws.
The alleged rigging of the tender was investigated during an Independent Commission Against Corruption inquiry into the Mount Penny farm licenses in the Bylong Valley.
ICAC recommended the ACCC investigate the breaches but made no findings since competition law is not part of the ICAC remit.
No criminal charges have yet been laid over the Mount Penny deals although ICAC made findings of corruption against the Obeids and the Cascade executives.
Mr Obeid senior has been charged with corruption in relation to a separate deal investigated by ICAC involving cafe licenses at Circular Quay.
The NSW government this month had to pass a law revalidating ICAC's findings of corruption against John McGuigan, Richard Poole and coal billionaire Travers Duncan in relation to Mount Penny after the High Court ruled ICAC was acting outside its powers.
The High Court is now considering whether to accept a challenge to the NSW law by Mr Duncan.
