The Canberra-based Australian Federal Police has charged two companies — Melbourne-based Securency International Pty. Ltd. and Note Printing Australia Ltd. — and six Victorian individuals with bribing foreign public officials.
The charges allege the two companies and six former senior executives with both companies conspired with sales agents in Indonesia, Malaysia and Vietnam to bribe officials to secure contracts to produce polymer banknotes for those countries.
Securency — a joint venture established in 1996 between Australia's central bank, the Sydney-based Reserve Bank of Australia, and Wigton, England-based polymer film producer Innovia Films Ltd. — manufactures and markets a biaxially oriented polypropylene polymer substrate used in Australian banknotes since 1988. It has sold the technology to 30 other countries.
Last November, Reserve Bank of Australia and Innovia announced plans to sell Securency, following what the companies claimed was “strong interest” from buyers. But there have been no further announcements on a possible sale, and an RBA spokesman would not comment on progress with such a sale.
In May 2009, a whistle-blower claimed bribes totaling up to A$45 million (US$49 million) were paid by Securency's foreign agents to sell the polymer banknote technology globally. After the allegations emerged, Securency asked the federal police to investigate the claims and engaged global accounting firm KPMG to examine its policies for employing international agents.
Note Printing Australia, also owned by the Reserve Bank, operates the printing works where Australia's banknotes are printed.
Bob Rankin, Securency chairman, confirmed the firm had been charged with three counts of conspiracy between 1999 and 2005. Two charges relate to influencing foreign officials in Indonesia, and one relates to Malaysian officials. He said the company is considering its legal position.
The Australian Federal Police also alleges a foreign official in Vietnam received a bribe, in the form of a university scholarship, to secure a banknote contract.
The individuals were released on bail after they appeared in court July 1. The charges against them carry a maximum penalty of 10 years in jail and/or a A$1.1 million (US$1.2 million) fine.
RBA Gov. Glenn Stevens said the individuals no longer had any connection with either company or RBA. “No one in the Reserve Bank has been accused of wrongdoing, nor have any members of the company boards who were drawn from the Reserve Bank.”
AFP charged the companies themselves, and allege the former senior managers also are liable because they represent the “mind and will” of the companies. AFP alleges the bribe money originated from Securency and NPA and they therefore received benefits in the form of banknote contracts. The charges against Securency and NPA carry a maximum fine of A$330,000 (US$360,000) for each offense.
Rankin said the Securency board, since it became aware of the allegations in May 2009, has introduced measures to ensure the “highest compliance with ethical business practices,” including appointing a chief risk and compliance officer; introducing a new compliance framework and code of conduct and ethics; and introducing a comprehensive whistle-blower policy.
Investigations in Australia and internationally are continuing. No dates have yet been set for the court actions.
Securency is a pioneer in producing plastic banknotes, which are more durable, cleaner and more difficult to fake than paper notes. Polymer notes are particularly popular in humid countries where paper tends to degrade much faster.