Reserve Bank sells stake in scandal-hit Securency
THE Reserve Bank has sold its 50 per cent stake in Securency, a firm alleged to have bribed foreign officials to secure note-printing contracts.
In a scandal that has put growing pressure on parts of the central bank, Securency and another subsidiary owned by the Reserve, Note Printing Australia, are accused of paying bribes to win overseas note-printing contracts.
On Tuesday the Reserve said it would receive $64 million after offloading its share in the firm to the British film manufacturer Innovia, which already owns the other 50 per cent of Securency.
The Reserve announced its intention to sell its stake in Securency in 2010, once the firm had established itself as a viable long-term supplier.
The Reserve said it would retain ownership of Note Printing Australia, which had entered into a contract to supply Securency with polymer material that would be used to make "Australia's next generation of banknotes".
It comes after the bank's governor, Glenn Stevens, last year appeared before a special hearing of the parliamentary economics committee to answer questions over the affair.
The Reserve also released the findings of an independent review into its oversight of Securency and Note Printing Australia by Cameron Ralph, a consultancy. The report found the Reserve's board had given "reasonable consideration" to the governance arrangements at the firm, and the board had taken "appropriate" action where the firms were not performing in line with its expectations.
"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 report said.
The chief executive of Innovia Films, David Beeby, said in a statement the Reserve had always intended to sell its stake. "It has always been their clearly stated policy to grow the business to the point where it would be divested once it held a strong position in the market, and that time has certainly arrived."