NSW corruption watchdog hears developer paid PI $134,000 to surveil former mayor

The NSW corruption watchdog has heard developer Toplace paid a private investigator $134,000 to surveil a former Strathfield mayor, despite the covert operation being described as a "personal matter" for company lawyer and Labor councillor Sharangan Maheswaran.

On Tuesday, Mr Maheswaran returned to the witness box as the corruption watchdog entered what was expected to be the final day of hearings in Operation Rosny.

The inquiry is examining allegations that Mr Maheswaran and fellow Labor councillor Karen Pensabene engaged in blackmail while attempting to oust Matthew Blackmore as mayor and install Ms Pensabene in the role.

Mr Maheswaran told the ICAC he persuaded his employer to subsidise the surveillance bill because it had "tangential" links to the developer, and he was owed money by another firm linked to Toplace founder Jean Nassif.

In evidence on Tuesday, the ICAC also heard private investigator Shane De Kauwe provided Mr Maheswaran with a range of covert surveillance devices, including a recording pen.

Text messages tendered to the inquiry show Mr Maheswaran telling a friend: "You should see my spy equipment one day."

Mr Maheswaran joked with Ms Pensabene about the surveillance, referencing Sting's song Every Breath You Take, the ICAC heard.

"The next line of that song, as we all know, is 'I'll be watching you'," counsel assisting Peggy Dwyer SC said.

The private investigator spent months secretly monitoring Mr Blackmore in 2022 and 2023, including photographing him and recording conversations at a local cafe.

In one exchange, the private eye told Mr Maheswaran he followed Mr Blackmore to Strathfield council library and "was listening for 20 hours plus… I must have fallen asleep for a time".

Mr Maheswaran denied he was provided with every recording and told the ICAC he sought legal advice on the surveillance.

The inquiry heard last week that Mr Nassif asked Mr De Kauwe to look into broadcaster Ray Hadley and former Liberal minister David Elliott.

Operation Rosny entered its final day on Tuesday, wrapping up two months of hearings into allegations of political influence, secret payments and efforts to target opponents.

The inquiry has examined allegations that prohibited political donations were funnelled through third parties to support a right-wing Liberal faction known as the NSW Reformers and advance the interests of Mr Nassif.