The state government is set to pass extraordinary laws to strip corrupt former Labor minister Eddie Obeid and his family of at least $30 million in profits from a coal deal at the centre of a historic corruption probe.
A day after Premier Barry O'Farrell announced the government would pass special laws to tear up three corruption-tainted coal exploration licences, Mr O'Farrell said it was also working on laws to confiscate the proceeds of corrupt activity by former Labor figures and businessmen.
He said on Tuesday the laws to cancel the licences would be introduced in state Parliament next week, while additional laws to claw back proceeds of corrupt coal ventures from Mr Obeid and others were still
"I'm told that it will take a little bit longer," Mr O'Farrell said.
After sensational public inquiries last year, the Independent Commission Against Corruption recommended in December that Cascade Coal's exploration licences at Mount Penny and Glendon Brook, and NuCoal's exploration licence near Doyles Creek in the Hunter Valley were "so tainted by corruption" they should be cancelled.
It also recommended special legislation modelled on proceeds of crime laws be passed to recover the profits of corrupt conduct from Mr Obeid and others.
The new laws would go further than existing legislation by allowing profits to be clawed back from people with knowledge of corrupt conduct rather than with proof of illegal activity.
The ICAC found former mining minister Ian Macdonald entered into a corrupt agreement in 2008 with Mr Obeid and his middle son, Moses, to create a mining tenement over the Obeids' farm at Mount Penny in the
Private company Cascade Coal won the exploration licence over the farm in 2009.
Five of Cascade's founding investors - coal mogul Travers Duncan, RAMS Home Loans founder John Kinghorn, businessmen John McGuigan and John Atkinson, and investment banker Richard Poole - were found to have
corruptly concealed the Obeids' involvement in the mining tenement.
The company has already paid $30 million to the family to extract them from a mining joint venture, with the promise of another $30 million.
NuCoal, which owns the Doyles Creek exploration licence in the Hunter Valley, said in a statement on Tuesday that it would consider a constitutional challenge to the validity of the laws to cancel the licences.
Asked if he was confident the laws would survive that attack, Mr O'Farrell said: "We've made them on the basis of legal advice."
The ICAC found the Doyles Creek licence was corruptly awarded by Mr Macdonald without a tender to a private company, Doyles Creek Mining, which was then chaired by former union official John Maitland.
NuCoal was a shell company linked to Doyles Creek Mining when it acquired the company in 2010.
Mr Maitland and two of his business associates, who were also found to have acted corruptly, have made at least $26 million from selling shares in NuCoal. Those profits could also be the subject of the
NuCoal chairman Gordon Galt said it was "grossly unfair" not to provide compensation to the company's 3000 shareholders, who will be affected by the cancellation of the licence.
The ICAC had recommended compensation be provided to innocent parties affected by the laws but the government has decided against it.
"Any investment on the stock market is speculative," Mr O'Farrell said on Tuesday.
He said he was not concerned about the effect of the decision on investment in the state.
"These are a two-off situation. Two mining leases, a legacy from a former government and their corrupt practices. Nothing that ICAC has unveiled since suggests that it's a widespread practice."
The story Premier targets Eddie Obeid's millions made in corrupt coal deal first appeared on The Sydney Morning Herald.