ICAC: Eddie Obeid jnr says shares in Australian Water Holdings were security for $3m loan

The youngest son of crooked former Labor minister Eddie Obeid has claimed his family does not have a stake in a company at the centre of a corruption investigation, despite being shown his signature on an agreement saying "sale of shares".

Eddie Obeid jnr told the Independent Commission Against Corruption on Friday his "emotional intention" was to invest in Australian Water Holdings but it was "too hard" to convince his four older brothers.

The family instead made a $3 million loan to the chief executive of the company, Nick Di Girolamo, and took the shares as "security", he said. The commission has previously heard the money came from the proceeds of a coal deal at the centre of an earlier corruption inquiry.

The commission is investigating allegations the Obeids were "secret stakeholders" in Australian Water, and that Mr Obeid senior corruptly lobbied colleagues to favour the company. None of the claimed $3 million loan has been repaid.

Mr Obeid junior said he "may have embellished" the truth when he told potential investors he was a shareholder because he was "pushing the wares of the business".

But he agreed with counsel assisting the inquiry, Geoffrey Watson SC, that a November 2010 heads of agreement setting out the terms for a ''sale of shares '' - signed by Mr Obeid junior as a witness - appeared ''on its face'' to be a straightforward sale. None of the claimed $3 million has been repaid.

Mr Obeid tried to downplay his involvement in the management of the company, but the inquiry heard he was instrumental in setting up a lunch at Otto restaurant in Woolloomooloo for Mr Di Girolamo and then federal Labor minister Tony Burke, former NSW Labor chief Karl Bitar and Queensland resources executive Tony Bellas.

He was involved in talks with corrupt former businessman John McGuigan - who was named in the previous inquiry into a coal tenement over the Obeids' farm - over a potential investment in the company. ''There was certainly some money put in by Mr McGuigan, '' Mr Watson said.

Asked why he was sent emails about management matters by Michael Costa, the former NSW treasurer who was briefly chairman of AWH, Mr Obeid said he didn't know and it was ''bizarre''. Mr Costa is not accused of any wrongdoing.

Mr Obeid said he was working at Australian Water "to a degree" but "it depends what you mean by working there". He was "looking for opportunities [for the company] in Queensland".

Commissioner Megan Latham asked: ''Did you get up in the morning, put on a suit, go to the premises of Australian Water Holdings, sit in an office and do things for the purposes of investigating these opportunities in Queensland?''

''Yes I did, '' Mr Obeid replied.

''So you worked there, '' she said.

The inquiry continues.

This story ICAC: Eddie Obeid jnr says shares in Australian Water Holdings were security for $3m loan first appeared on The Sydney Morning Herald.