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MINT that Money well : Securency,Yar`adua`s polymer naira notes manufacturers under investigation

Highlight: As The Age reports today, federal police are investigating whether Securency bribed Nigerian officials to win a bank-note contract. The probe centres on a series of multi-million-dollar payments made by the company into an offshore tax haven account of two

UK-based businessmen, Benoy Berry and Mike Harding, who boast high-level political connections in Britain and Africa. The men were paid to help Securency win a 2006 contract from the Central Bank of Nigeria to print its polymer notes.

An Age investigation unearthed evidence the firm paid millions into a tax haven bank account belonging to Dr Berry, while an overseas-based source claims Securency paid $1 million into accounts tied to two companies overseen by Mr Harding. Our investigation also found that Mr Harding directs some of his companies' earnings into a tax-free business zone at Sharjah airport in the United Arab Emirates.
The RBA declined to answer questions about Securency's activities in Nigeria, in the same way it kept mum last month when Securency's Africa manager, Peter Chapman, resigned and the company's convicted South African middleman, Donald McArthur, was sacked. The sacking took place only after The Age revealed McArthur had pleaded guilty last year to reckless trading involving fraudulent transactions. Again, the details of Securency's engagement with McArthur raise questions of the RBA

Complete Story:

For obvious reasons Australians are entitled to expect their central bank to comply with the highest standards of probity, transparency and good governance. This includes an assumption that the Reserve Bank, as chief custodian of the nation's financial system, would apply proper scrutiny to the activities of its subsidiary companies, especially when those companies seek contracts, however lucrative, in corruption-riddled parts of the world.

And yet as The Age continues to expose a worrying trail of dubious deals struck by the RBA's half-owned subsidiary Securency, the Reserve has maintained a somewhat undignified silence on the subject. We acknowledge the RBA acted properly in initiating a federal police probe - and KPMG audit - into commission payments made by Securency to politically connected foreign middlemen. We would not expect the RBA to say anything that cuts across those inquiries.

But the silence is beginning to smell like an unwillingness to face facts and to act on them. Securency's operations, namely the engaging of middlemen with shady pasts and the payment of commissions into offshore tax haven accounts (contrary to RBA rules) and the curious size of those commissions, raise serious questions about the extent of the RBA's knowledge and the quality of its oversight.

At the very least, we deserve some kind of explanation about why, in the Reserve's recent annual report, governor Glenn Stevens expressed confidence in the way the bank had supervised Securency's activities. The bank has effectively opened the door on its own probity through this extraordinary assertion.

The Reserve's failure to stand down officials within Securency while the company remains under investigation - a convention of good governance - is also mystifying.

Nigeria:

As The Age reports today, federal police are investigating whether Securency bribed Nigerian officials to win a bank-note contract. The probe centres on a series of multi-million-dollar payments made by the company into an offshore tax haven account of two

UK-based businessmen, Benoy Berry and Mike Harding, who boast high-level political connections in Britain and Africa. The men were paid to help Securency win a 2006 contract from the Central Bank of Nigeria to print its polymer notes.

An Age investigation unearthed evidence the firm paid millions into a tax haven bank account belonging to Dr Berry, while an overseas-based source claims Securency paid $1 million into accounts tied to two companies overseen by Mr Harding. Our investigation also found that Mr Harding directs some of his companies' earnings into a tax-free business zone at Sharjah airport in the United Arab Emirates.

The RBA declined to answer questions about Securency's activities in Nigeria, in the same way it kept mum last month when Securency's Africa manager, Peter Chapman, resigned and the company's convicted South African middleman, Donald McArthur, was sacked. The sacking took place only after The Age revealed McArthur had pleaded guilty last year to reckless trading involving fraudulent transactions. Again, the details of Securency's engagement with McArthur raise questions of the RBA.

And there's more. Why did Securency in 2003 engage an arms dealer linked to the supply of weapons to Latin American drug gangs to help it win a bank-note printing deal in Paraguay? Why did Securency discuss its bank-note technology with Sudanese central bank officials last year? Doing business with Sudan would not violate Australia's international obligations under the UN sanctions regime, but should an RBA subsidiary even be talking to a country backlisted by the US for supporting terrorism and ranked among the world's most corrupt by Transparency International?

And, while we're at it, why did the RBA pay $500,000 to a self-styled ''white witch'' to oversee an ultimately disastrous workplace overhaul at the fully owned Note Printing Australia, Securency's sister company? On the other hand, perhaps a consultant with special powers may have helped Securency's officials better appreciate the risks of using agents in corruption-prone countries.

Government agencies and departments must also account for their knowledge of Securency's activities, and their action, or inaction, as a result. But first, we wait for our bank to speak.

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