Chronology Events related to charges against Note Printing Australia and Securency

The board of Securency referred allegations raised in the media concerning the company's use of sales agents in foreign countries to the Australian Federal Police (AFP).

The AFP commenced an inquiry into the matter, which was subsequently widened to include the use of sales agents by NPA. Both the companies and the RBA cooperated fully with this inquiry.

Both companies had ceased using sales agents. The NPA board had decided to cease the use of sales agents in June 2007 and the Securency board suspended agent activity in November 2009.

Charges were laid by the AFP, alleging that the two companies and a number of individuals engaged in conspiracy with sales agents in certain foreign jurisdictions to pay or offer to pay bribes to officials in those countries for the purpose of obtaining or retaining business.

The individuals charged were former employees of the companies, including a former chief executive officer (CEO) of each of NPA and Securency. The charges against the companies were laid on the basis that a person or persons of sufficient seniority, such that their conduct may fairly be assumed to represent the company's policy, intentionally, knowingly or recklessly engaged in the relevant conduct.

Apart from the two former CEOs, who were members of the Securency board (one appointed by the RBA and the other by the operation of the joint venture arrangements), no members of the boards of the companies appointed by the RBA were charged.

For further information, refer Media Release of 1 July 2011.

The Reserve Bank Board established a special committee (Special Committee) to consider the appropriateness of the governance structures put in place by the RBA, as shareholder, in respect of NPA, originally a branch of the Bank but established as a separate company in 1998, and Securency, a 50-50 joint venture between the RBA and Innovia Films BVBA (previously UCB Films PLC) established in 1996, against the governance standards for subsidiaries and/or associated companies at the relevant time.

Pecuniary penalty orders under the Proceeds of Crime Act 2002 were made in the County Court of Victoria by consent, requiring each company to pay a penalty to the Commonwealth.

Securency paid a pecuniary penalty of $19,809,772 and NPA paid a pecuniary penalty of $1,856,710. The pecuniary penalty payment made by each company reflected agreement between the Crown and the company on the benefit obtained by the company from the contracts in question and other relevant circumstances.

The Supreme Court of Victoria held a sentencing hearing on the pleas entered by NPA and Securency.

The Reserve Bank Board considered the results of the Cameron Ralph Independent Governance Review of the RBA's oversight of the companies at a special session. The Review concluded that:

The Bank gave reasonable consideration as to the governance arrangements for the two companies, and put in place processes for their oversight and reporting which were broadly consistent with usual practice at the time. The Bank appointed people whom it was entitled to believe could direct the affairs of the companies with due care, diligence and skill. The Bank received regular reports both at management and board level, and responded to those reports in a considered and deliberate way.

There is evidence of the Bank taking appropriate action where the entities appeared not to be performing in line with the Bank's expectations and/or standards.

Clearly, with the benefit of hindsight, there could have been more oversight applied to the activities of the companies, which may have detected earlier the alleged illegal payments. But that does not mean that the Bank's oversight at the time was inappropriate.

The Review nevertheless made a number of findings and recommendations. The RBA accepted the findings, and has implemented the recommendations. The Review was published in February 2013.

The Supreme Court of Victoria issued its judgment sentencing NPA and Securency and in doing so noted that NPA and Securency had both provided a very high degree of cooperation with, and assistance to, the AFP and had cooperated fully in the penalty process (including by providing detailed financial information to, and promptly agreeing a proceeds of crime penalty with, the Commonwealth). These factors, and the early indication of an intention to plead guilty, reduced the sentences imposed by the Court.

Securency was sentenced to, and paid, fines totalling $480,000. NPA was sentenced to, and paid, fines totalling $450,000.

John Ellery, the former Chief Financial Officer of Securency was sentenced to six months' imprisonment, with the sentence wholly suspended. He had entered a plea of guilty on a false accounting charge in relation to the false description of a commission payment to Securency's Malaysian sales agent.

The then RBA Governor appeared before the House of Representatives Standing Committee on Economics, at a special full-day hearing.

A Memorandum provided to the Committee at that hearing summarises what the board of NPA and the RBA did in response to concerns that were raised in 2007 in relation to the use of foreign sales agents by NPA and what happened subsequently.

An individual who had been a director of Securency over the period January 2001 to September 2004 was tried in the Southwark Crown Court in London in connection with certain conduct involving business in Vietnam that was also the subject of the charge in Australia against Securency relating to that business. This director had been appointed to the board of Securency by the RBA's then joint venture partner in Securency. In December 2012 a jury found him not guilty.

Notwithstanding the plea entered by Securency on the charge against it relating to business with the central bank of Vietnam, the Magistrate hearing the committal proceedings on the charges against former employees of the companies decided not to commit the relevant individuals for trial on the charges against them relating to the same business in Vietnam.

The RBA agreed to sell its 50 per cent shareholding in Securency to Innovia Films BVBA, the UK-based film manufacturer and then current 50 per cent joint venture partner in Securency. For more on the sale of the RBA's stake in Securency see Media Release 12 February 2013.

The Magistrate decided not to commit the relevant individuals on the bribery charges relating to business with the central bank of Nepal. However in November 2013 the Commonwealth Director of Public Prosecutions directly indicted those individuals on those charges.

Radius Christanto, the principal of a business that was an agent for Securency in Indonesia, who had been charged with conspiring with Securency and others to bribe a foreign public official in order to obtain business with Bank Indonesia, entered a plea of guilty to that charge. He was sentenced to two years' imprisonment, with the sentence wholly suspended.

The four former NPA employees facing charges were granted a permanent stay of the prosecutions against them by the Supreme Court of Victoria. The Crown appealed the stay decision and the appeal was heard by the Victorian Court of Appeal over a period from November 2016 to February 2017.

The Court of Appeal allowed the appeal brought by the Crown, set aside the orders made by the Judge at first instance to stay the proceedings and, in their place, ordered that the stay applications made by the four former NPA employees be refused. The four individuals sought special leave to appeal this decision to the High Court.

The High Court granted the four former NPA employees special leave to appeal. It heard the appeal in May 2018.

Cliff Gerathy entered a plea of guilty to a charge of false accounting in June and July 2006 while he was a Securency employee through false description of a commission payment to Securency's Malaysian sales agent. He was sentenced to imprisonment for 3 months, wholly suspended for 6 months.

The High Court allowed the appeal by the four former NPA employees, granting a permanent stay of all prosecutions against them. The Court held that the then Australian Crime Commission had acted unlawfully in compulsorily examining these individuals and that, in the circumstances of the case, to allow the prosecutions to proceed would bring the administration of justice into disrepute.

Christian Boillot entered a plea of guilty to the charge of conspiracy to offer a bribe to foreign officials in Malaysia. In early December 2018 he was sentenced to imprisonment for 2 years and 6 months, but released on a recognisance release.