Business & Finance

Six people, two firms charged in Australian banknote scandal

SYDNEY : Six people and two banknote firms linked to Australia's central bank have been charged with bribing Asian offic

Published July 1, 2011 Updated July 1, 2011 05:59am

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By Syed Murtaza Gheblehzadeh

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Australian Federal Police (AFP) said the charges against the men and currency companies Securency International and Note Printing Australia (NPA) were the first under foreign bribery laws introduced in 1999.

They relate to alleged bribes given to officials in Indonesia, Malaysia and Vietnam over a six-year period.

"The AFP will allege that during the period 1999-2005, senior managers from Securency and NPA utilised international sales agents to bribe foreign public officials in order to secure banknote contracts," police said.

The Reserve Bank of Australia (RBA) was a part-owner of Securency, which produces polymer banknotes known for their durability and for being hard to counterfeit around the world, at the time.

Note Printing Australia is a wholly owned subsidiary of the RBA.

In a statement, police said that in Indonesia a foreign official allegedly received a bribe to ensure a joint venture banknote contract for Securency and NPA, while in Malaysia a bribe was used to secure a contract with NPA.

"It will be alleged that in relation to Vietnam, a foreign official received a bribe paid in the form of a university scholarship to secure a banknote contract on behalf of Securency," police said.

The six Australian arrests came as Malaysian authorities laid related bribery charges against two citizens.

Police said they had been cooperating with foreign counterparts, including Britain's Serious Fraud Office, the Malaysian Anti-Corruption Commission, Malaysian Attorney General's Chambers and Indonesian National Police.

The Australians charged, aged between 50 and 66, are all from the southern state of Victoria and due to appear in court later Friday.

They face up to 10 years in prison and a fine of up to Aus$1.1 million (US$1.2 million).

Police said the charges against the companies, which carry a maximum fine of Aus$330,000 per offence, are not a reflection that individual board members were complicit or knew of any illegal activity.

"The charges are a result of former senior managers within the companies who, allegedly at that time, represented the 'mind and will' of the companies," police said.

"It will also be alleged that money paid in bribes originated from the companies and that the companies therefore received a resulting benefit in the form of banknote contracts."

Australian authorities began probing the companies in May 2009 following a referral from the chairman of Securency and it is understood that the company, as well as NPA, has assisted the investigation, which is ongoing.

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