Innovia deal for rest of Securency to close, bribery case to continue

By Kate Tilley
Correspondent

Published: February 22, 2013 2:54 pm ET
Updated: February 22, 2013 3:01 pm ET

Related to this story

Topics Mergers & Acquisitions

SYDNEY — Australia's central bank will complete the sale of its stake in Securency International Pty. Ltd., the country's plastic banknote maker, by Feb. 28.

The Sydney-based Reserve Bank of Australia has agreed to sell its 50 percent stake in Securency to its business partner and fellow shareholder Innovia Films Ltd., a polymer film manufacturer based in Wigton, England.

In a statement, the Reserve Bank said it will receive an initial payment of A$65 million (US$67 million).

According to the bank's 2011-12 financial accounts, covering July 1, 2011, to June 30, 2012, Securency's investment was valued at A$54 million.

"Additional payments may be made to the bank over following years, including if Securency exceeds certain earnings benchmarks," the statement said.

The Reserve Bank and Innovia initially announced they jointly wanted to sell Melbourne-based Securency in late 2010. Innovia later decided it no longer wanted to sell its 50 percent stake and made an offer to buy the bank's shares.

The Reserve Bank said its "long-standing" intention was always to exit from the joint venture once Securency had established itself as a viable, long-term supplier of the polymer-based banknote substrate.

In a statement, Innovia Films said the company's existing cash reserves will fund the acquisition, which is expected to be completed Feb. 28.

Innovia Films CEO David Beeby said: "It has always been [the Reserve Bank's] clearly stated policy to grow the business to the point where it would be divested once it held a strong position in the market, and that time has certainly arrived."

Securency was established in 1996 to manufacture and market a biaxially oriented polypropylene polymer substrate used in Australian banknotes since 1988.

Currently, 21 countries use the substrate for their banknote supply, but overall 34 countries have used it.

The Reserve Bank wholly owns Melbourne-based Note Printing Australia Ltd., which operates the printing works where Australia's banknotes are printed. The bank plans to retain Note Printing.

"As part of the sale, Note Printing will enter into a long-term supply contact with Securency for the provision of polymer substrate for Australia's next generation of bank notes," it said.

Securency and Note Printing have been embroiled in a bribery saga since May 2009, when a whistleblower claimed bribes totaling up to A$45 million were paid by Securency's foreign agents to sell the polymer bank­note technology globally.

In 2011, the Canberra-based Australian Federal Police (AFP) charged Securency and Note Printing, and eight of their senior executives, with bribing foreign public officials.

The AFP alleges they conspired with sales agents in Indonesia, Malaysia and Vietnam to bribe officials to secure contracts to produce polymer banknotes for those countries.

Committal proceedings in Melbourne Magistrates' Court began Aug. 13 but then were adjourned to April 3.

A Securency spokes­man would not comment on the committal (a preliminary hearing after which a magistrate determines whether there is sufficient evidence for the accused to be tried in a higher court). The spokesman said Securency was subject to a court-ordered suppression order.

In August, David John Ellery, Securency's former chief financial officer and company secretary, pleaded guilty in Victorian Supreme Court to falsifying documents in 2006. He was sentenced to six months in jail, suspended for two years.

Prosecutors did not argue Ellery was part of an "inner sanctum" of an alleged bribery conspiracy. But Ellery agreed to give "full and frank evidence" against his co-defendants as part of his guilty plea.

The Reserve Bank commissioned an independent review into its oversight of Note Printing and Securency, which was released Feb. 12. The review, conducted by Melbourne-based governance specialist Cameron Ralph Pty. Ltd., concluded the bank implemented appropriate processes.

"Clearly, with the benefit of hindsight, there could have been more oversight applied to the activities of [Securency and Note Printing], which may have detected earlier the alleged illegal payments. "But that does not mean the bank's oversight at the time was inappropriate," the review said.


Comments

Innovia deal for rest of Securency to close, bribery case to continue

By Kate Tilley
Correspondent

Published: February 22, 2013 2:54 pm ET
Updated: February 22, 2013 3:01 pm ET

Post Your Comments


Back to story


More stories

Image

Amcor buys Chinese flexible packaging plant

December 18, 2014 1:47 pm ET

Australian-based global packaging company Amcor Ltd. is buying a Chinese flexible packaging business for 211 million RMB (US$31.4 million).    More

Image

Indian auto parts maker set to buy assets in Germany, Mexico

December 18, 2014 10:35 am ET

Indian auto parts maker Samvardhana Motherson Gropup is buying the assets of insolvent German plastics car parts producer Scherer & Trier (S&T).    More

Image

Sweden's Indutrade buys Belgian packaging firm Verbeek

December 18, 2014 9:42 am ET

Sweden's Indutrade AB has purchased all the shares in Belgium's Verbeeck Packaging Group.    More

Image

Röchling buys two UK firms

December 18, 2014 9:24 am ET

Germany's Röchling Engineering Plastics SE & Co. KG has expanded its presence in the high-performance plastics market by acquiring two British firms...    More

Image

UK recycler Eco Plastics sold to German investment group

December 12, 2014 11:19 am ET

Recycler Eco Plastics has been bought by Aurelius AG, a Grünwald, Germany-headquartered investment firm, for an undisclosed sum.    More

Market Reports

Flexible Packaging Trends in North America

Our latest RESEARCH report examines trends in FLEXIBLE PACKAGING impacting the North American market including a review of economic conditions, key drivers of growth, materials pricing, M&A activity, sustainability challenges and the outlook for 2015.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 billion plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events