Two executives suspended over banknote probe

The managing director and company secretary of Securency, in which the Reserve Bank of Australia (RBA) has a 50 percent stake, were stood down Friday pending police inquiries, said board chairman Bob Rankin.

“On 23 May 2009, allegations were made in The Age newspaper that payments made to agents by Securency International Pty Ltd may have been used by the agents to pay kickbacks to foreign government officials,” Rankin said in a statement issued late Friday night.

“The Board of Securency took the allegations very seriously and referred them to the Australian Federal Police (AFP),” he added.

“The Board ... has asked the managing director and the company secretary to stand aside from their positions while investigations continue.”

The RBA issued a brief statement saying it endorsed Securency's actions.

According to The Age report Securency officials paid more than 12 million dollars in kickbacks for a printing contract to a Vietnamese businessman with links to the communist state's government

Securency officials are also accused of paying bribes worth millions of dollars into tax haven bank accounts of a politically-connected Nigerian businessman to win a 2007 contract.

Australian law forbids companies from paying foreign officials or government-controlled firms for a business advantage.

Rankin, also an assistant governor of the RBA, said police had raided Securency's offices and the board had also commissioned accounting firm KPMG to conduct an independent audit, which was ongoing.

Inquiries to date had revealed similar allegations were made to Securency's management in 2007 by a member of staff, but an internal investigation ruled no action was required, Rankin said.

Management kept the investigation a secret from Securency's board and also failed to inform the RBA, which Rankin described as “unacceptable”.

Until the current probe was complete Rankin said the board had ordered the company to suspend its marketing activities while KPMG examined the working relationships of all its agents.

Securency developed the technology for polymer plastic bank notes now used in 27 countries around the world including Vietnam.

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