Aussie banknote scandal: RM11 million kickback probe almost over

...as global swoop nabs several suspects

Frankie D'Cruz, The Malay Mail

Lightning raids were launched in several countries last night in connection with the Reserve Bank of Australia (RBA) bribery and corruption scandal that has also implicated a Malaysian corporate figure of receiving a RM11.3 million kickback.

The simultaneous raids by Australian Federal police (AFP) and overseas agencies however did not involve the Malaysian Anti-Corruption Commission (MACC) that is investigating the businessman from Penang.

The operations were to uncover evidence of corruption and bribery involving RBA subsidiaries — banknote firms Securency International and Note Printing Australia (NPA).

The businessman is alleged to have been paid RM11.3 million for lobbying the Malaysian government and banking officials to adopt the Australian-made polymer banknotes.

MACC investigation director Mustafar Ali confirmed this morning that the anti-graft agency was not part of the global raids.

He said investigations into the RM11.3 million kickback involving the Malaysian businessman were almost completed.

The MACC had in July interviewed the businessman, who was allegedly the middleman in the banknote deals, after the AFP sought its assistance.

Mustafar declined further comment as it might jeopardise investigations. The MACC has been helping the AFP trace the RM11.3 million that was paid by Securency International, a polymer currency company, to its Malaysian agent.

The Malaysian was allegedly paid the amount by Securency to secure a multi-million ringgit deal with Bank Negara Malaysia (BNM) to print the RM5 polymer note.

At least one person closely connected with a senior Malaysian government official is alleged to have received kickbacks from the commissions paid by the RBA firms.

The Malaysian’s investment company is alleged to have received hundreds of thousands of dollars in commissions.

It is not known how widespread last night’s joint raids were but The Age reported this morning that homes and offices of people with alleged links to the payment of millions in bribes by Securency had been raided in Melbourne, Britain and Spain.

The payments were made to foreign officials, including politicians and bankers, between the late 1990s and 2009.

The Age investigative reporters Richard Baker and Nick McKenzie said six houses across Melbourne were raided while Britain's Serious Fraud Office simultaneously raided premises in England.

Several middlemen who helped Securency win a multi-million ringgit deal with Nigeria's central bank live in or near London, while the firm's global director of sales lives in Hampshire, they stated. Two men have been arrested.

Officers from five British police forces helped execute search warrants. The Age reported the raids would put fresh pressure on the Australian government to back a broader inquiry into Securency's dealings and the extent to which they involve failings by the RBA and agencies such as Austrade, which helped select some of the middlemen.

Baker’s and McKenzie’s expose led to an AFP operation, codenamed Operation Rune, to probe allegations that bribes were paid to overseas agents or middlemen working for Securency to win contracts to produce polymer notes for countries in Africa, Asia and South America.

The AFP operation began in May 2009 after The Age revealed Securency had wired millions of dollars to offshore accounts linked to dubious middlemen, including some previously implicated in corrupt dealings.

Early this year, an audit discovered more than RM150 million had been paid between 2003 and 2009 to overseas middlemen.

Securency and NPA engaged the Malaysian agent, against advice, in the late 1990s.

The Australian companies won currency printing contracts in Malaysia for the RM50 Commonwealth Games commemorative note in 1998 and the RM5 polymer note in 2004.

The Malaysian was chairman of several local companies but probably remembered for the problems that besieged the listing of a fast rising company in 1996.

He had reportedly also been a broker for a Pakistani government-linked weapons-making factory and was the second arms trader to have been used as an agent by either or both Securency and NPA.

Securency had also used an arms dealer suspected of supplying guns to Latin American drug gangs as its agent in Paraguay.