UGL Unit Was “Cooking” its Books, Ex-President Claims

UGL Ltd. (UGL) denied allegations made by the former president of its real estate unit that it misstated financial results to deceive the board of directors and investors.

Robert Shibuya, former president of DTZ Group, sued UGL in state court in California on Feb. 10 claiming he was wrongfully fired for complaining about “unlawful ‘cooking of the books’” and because he was Japanese, according to a complaint filed with the court.

“These claims of financial manipulation and discrimination are completely baseless,” the company said in a statement to the Australian stock exchange today.

Shibuya was hired in April 2011 in Los Angeles as group president of UGL Services, the predecessor to DTZ, receiving an annual base salary of $650,000 and $1,040,000 in incentives, according to the job offer filed with his lawsuit. He is seeking unspecified compensatory and punitive damages from UGL, a Sydney-based engineering and real estate company with a market value of more than A$1 billion ($906 million).

Shibuya was “retaliated against and terminated in part for complaining about, protesting and opposing defendants’ unlawful ‘cooking of the books,’” according to the complaint, which didn’t provide details of the alleged manipulation of results. “Defendants manipulated the financials in order to deceive the general public, particularly investors and potential investors.”

Salary Increases

In the complaint, Shibuya said he received regular salary increases, promotions and commendations for his work. He said had he been Caucasian or Australian, his complaints and refusal to participate in the misstatements of financial results may have been overlooked.

In announcing the appointment of Tod Lickerman as DTZ’s global chief executive officer on Sept. 17, UGL CEO Richard Leupen thanked Shibuya for his contribution to the company.

UGL is planning to spin off DTZ by the end of the year and is evaluating unsolicited third-party interest in the unit, the company said in a statement to the ASX today.

Shares in UGL, which reported a first half net profit of A$29.5 million today, fell 11 percent at 2:19 p.m. in Sydney trading.

The case is Robert Shibuya v. UGL Ltd. BC535953. Superior Court of the State of California (Los Angeles).

To contact the reporter on this story: Joe Schneider in Sydney at jschneider5@bloomberg.net

To contact the editor responsible for this story: Douglas Wong at dwong19@bloomberg.net

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