A corruption inquiry into the Obeid family-linked company Australian Water Holdings has heard explosive claims its then chairman, Liberal Party heavyweight Arthur Sinodinos, was warned it was racking up massive debts, including tens of thousands of dollars in donations to the Liberal Party.

The evidence of AWH investor Rod de Aboitiz, who appeared at the Independent Commission Against Corruption on Thursday, contradicts long-standing claims by Senator Sinodinos that he was unaware the company was making donations to the Liberal Party.

Mr de Aboitiz told the ICAC that he confronted Senator Sinodinos, then non-executive chairman of AWH and honorary treasurer of the NSW Liberals, in May 2010 about ''out of control'' costs at the company.