Press "Enter" to skip to content

Reserve Bank Pushes Back Over Corruption Allegations

The Reserve Bank of Australia has defended itself over allegations aired on 7.30 last night about what it knew about alleged corrupt activity at Note Printing Australia Limited prior to media reports in 2009.

The Age newspaper also provided a major report on the story in today’s edition.

Media release from the Reserve Bank of Australia.

Statement Concerning Note Printing Australia Limited and Securency International Pty Ltd

The ABC’s 7.30 program has made a number of ill-founded allegations with regard to what the Reserve Bank knew about alleged corrupt activity at Note Printing Australia Limited (NPA) prior to allegations in the media in May 2009.

The document the 7.30 program described as ‘new’ was examined at the NPA Board’s request by Freehills in 2007 as part of its investigation. The document was a statement by an NPA employee, compiled at the request of Ric Battellino, the Chair of the Bank’s Audit Committee and then Deputy Governor of the Reserve Bank. The ‘secret’ meeting between the employee and Mr Battellino was confidential at the request of the employee. This document is currently part of the evidence in current proceedings before the Court. Legal advice to the Reserve Bank is that the Bank is prohibited from disclosing it or its contents pursuant to the normal rules of Court and an order of the Supreme Court. Whether it will become part of the public record as current Committal Hearings progress will be a matter for the Court.

The Bank has previously stated that an audit done at the request of the NPA Board in 2007 showed serious deficiencies in the company’s practices and controls relating to the use of sales agents. The audit made no findings regarding illegality, but recommended a separate investigation into whether there had been a breach of Australian law. When the NPA Board received the audit report, the NPA Board decided to terminate the use of sales agents immediately and engaged Freehills to investigate whether there was a breach of Australian law. The Freehills investigation, which had direct access to the statement of the NPA employee, concluded that there was not. The question of a referral to the Australian Federal Police (AFP) therefore did not arise at that time. On any reasonable reading, the NPA Board at that time sought the appropriate information, sought appropriate advice, responded appropriately to the information it received, and reasonably relied on the advice it received.

In addition, it has been noted that in May 2009, the Chairman of Securency requested that the AFP investigate the allegations made against Securency in the media. At the start of that investigation he brought the 2007 review of NPA agent arrangements to the attention of the AFP, even though the allegations did not at that stage involve NPA. The AFP was subsequently provided with copies of the 2007 audit report and the Freehills report when they requested access to them during the course of their investigation.

The Governor has made a number of statements to the House of Representatives Economics Committee in relation to these matters. In particular, he has stated that, to the Bank’s knowledge, the first time allegations were raised about Securency was in May 2009, by The Age newspaper. That remains the case. The Governor has also responded openly to questions from the Committee about the way in which the matters at NPA in 2007 were handled. The Bank rejects the implication that the Governor or other officers of the Bank have misled the Committee.

Print Friendly, PDF & Email
Malcolm Farnsworth
© 1995-2024