Bribes generate banknote sales

The bribe-paying antics of Securency, the maker of polymer substrate for plastic banknotes, were the subject of an investigation reported by The Age on Saturday.

The Reserve Bank of Australia owns 50 per cent of Securency through Note Printing Australia. Innovia Films, a British-based company, is the other shareholder.

Securency, or its agents, engaged in the common business practice of paying bribes in select target countries in Africa and Asia, passed funds through tax havens such as the Seychelles and the Bahamas, and in one instance employed a convicted fraudster as an agent.

The RBA and the Australian Federal Police now have some of the matters raised by the newspaper under investigation, while the RBA suggested that it would concentrate on marketing the substrate to central banks only.

Production and sales volumes for Securency are unclear, though the firm has invested in additional production lines at its plant in Melbourne and also invested in a new plant in Mexico, in which Banco de Mexico is a partner.

Securency earned a profit after tax of $13.5 million in 2007, about the same as in 2006, according to the RBA's 2008 annual report.