Aussie central bank hid bid to bribe Putrajaya for banknote deal

September 12, 2012
Abdullah denied the allegations of corruption last year. — File pic

KUALA LUMPUR, Sept 12 — Australian central bank officials were told in 2007 that its banknote printing unit Securency had engineered a scheme to hide a RM492,000 payment to a Malaysian arms dealer in order to secure contracts from the Badawi administration here despite an earlier denial, newspapers in Australia reported today.

Among others, the reports cited internal documents that contradicted earlier assertions by Reserve Bank officials that they knew nothing about bribery allegations until it surfaced in 2009.

The Sydney Morning Herald (SMH) reported today that according to the documents, the Malaysian arms dealer had also written to Australian Reserve Bank assistant governor Frank Campbell demanding further payments and stating that he had convinced the “prime minister and the Malaysian Cabinet” to give out contracts.

The arms dealer — Abdul Kayum Syed Ahmad, 62 — was charged here last year with two counts of giving RM50,000 bribes in 2004 and 2005 to former Bank Negara assistant governor Datuk Mohamad Daud Dol Moin in order to procure a contract to print the RM5 polymer bank notes by Reserve Bank subsidiary Note Printing Australia Ltd.

Mohamad Daud was also charged by the Malaysian Anti-Corruption Commission (MACC) last year with receiving the two bribes from Abdul Kayum Syed Ahmad through a middleman as an inducement to assist NPA to secure the same contract.

Securency and NPA’s agents were former Umno state assemblyman Datuk Abdullah Hasnan Kamaruddin and Abdul Kayum. Both Australian police and the MACC began investigating the case in 2009.

In 2010, the MACC detained three individuals linked to the supply of RM5 polymer notes following a report that Securency had offered bribes to officials in Malaysia.

All three, including a businessman, were charged with taking RM11.3 million to secure the contract from BNM and to ensure that the government of Malaysia opted for the polymer notes.

The new internal Reserve Bank documents conflict with Australian parliamentary testimony by Reserve Bank governor Glenn Stevens that the bank knew nothing about the Securency banknote scandal before it was revealed in 2009.

The scandal involves the Reserve Bank companies Securency and Note Printing Australia, which were charged last year with bribing foreign officials to win banknote contracts.

In an immediate response, the Reserve Bank said its executives acted with integrity.

“The Reserve Bank is committed to transparency on these matters. The bank’s executives acted in good faith and with integrity. It is completely without foundation to suggest otherwise,” the central bank said.

Eight former managers and employees at the bank’s Note Printing Australia unit and Securency face charges in relation to the bribing of officials in Malaysia, Indonesia and Vietnam from 1999 to 2004 to win bank-note printing contracts.

Last month Stevens told an Australian parliamentary committee the Reserve Bank did not know of the corruption concerns until they were exposed in the media and that the bank had given relevant documents to the federal police in a timely manner.

However, confidential Reserve files reveal that during 2007, Campbell was told that a “further $492,000” was given Abdul Kayum in hidden commissions.

Later that year, the dual chairman of NPA and Securency, Graeme Thompson, who is a former Reserve deputy governor, “advised the [NPA] board that Securency would, on the basis of legal advice received, pay the agent [Mr Kayum] the amount of commission included in the substrate price recovered from NPA”, board records reveal.

Tun Abdullah Ahmad Badawi denied last year the allegations that the two Australian banknote firms attempted to bribe him for a RM100 million Malaysian currency contract during his tenure as prime minister.

The attempt is believed to be related to the deal to supply the RM5 polymer notes that began circulating in 2004.