Securency Ex-CFO Gets Suspended Sentence in Bribery Probe

The former chief financial officer of Securency International Pty, the Reserve Bank of Australia’s half-owned venture supplying material for printing money, was given a six-month suspended sentence in a bribery probe.

David Ellery, 56, pleaded guilty to one charge of false accounting in the probe of former managers and employees at Note Printing Australia Ltd. and Securency, who have been charged with bribing officials in Malaysia, Indonesia and Vietnam to win currency-printing contracts.

Supreme Court of Victoria Justice Elizabeth Hollingworth in her written ruling today noted that Ellery has cooperated with police, supplied evidence to investigators and given a witness statement.

“You will be an important prosecution witness in any committal or trial in relation to the conspiracy charges,” Hollingworth wrote. “An offer to give detailed oral evidence against alleged offenders will generally attract a substantial discount” in sentencing, she said.

Securency and Note Printing Australia, which is fully owned by the central bank, and seven people who worked at the companies, were charged over payments allegedly made between 1999 and 2004. It’s the first time anyone’s been prosecuted under anti-bribery laws enacted in Australia in 2000.

Directors Changed

Note Printing Australia is governed by a board of directors appointed by the Reserve Bank. Securency’s board has three directors appointed by the RBA. The central bank said in its annual report last year that it had replaced its representatives on the two companies’ boards after the bribery charges were laid.

Note Printing and Securency each negotiated separate agreements in 1999 and 2000 with a Malaysian man and, or, his company, appointing them as their agent and agreeing to pay them a commission for contracts the Australian companies obtained, according to Hollingworth’s judgment.

Note Printing won a A$15.2 million ($15.9 million) contract to supply Bank Negara Malaysia with 160 million 5 ringgit ($1.60) polymer notes in December 2003, according to Hollingworth. In December 2005, the Malaysian bank ordered another 100 million of 5 ringgit notes.

Securency paid the Malaysian agent A$79,502, without seeking any supporting documentation for the payment, the judge said.

“Your knowledge that what you were doing was dishonest at the time is evidenced by the steps you subsequently took to try and conceal what had actually happened,” Hollingworth said to Ellery in the judgment.

In response to an inquiry from the assistant governor of the Reserve Bank in June 2007, Ellery said no commissions were paid to the Malaysian agent and Securency had reimbursed him for “marketing expenses,” according to the judge.

Australia’s main stock market regulator said on March 12 that it won’t conduct a formal investigation of company directors involved in the bribery probe.

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