Judge Slams Securency Culture in Sentencing of Former CFO

Posted on August 23, 2012

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An Australian judge slammed the corporate culture of Securency International Pty Ltd. when sentencing the company’s former chief financial officer.

David Ellery, who pleaded guilty to one count of false accounting, was sentenced to a suspended six-month jail term by Supreme Court of Victoria Justice Elizabeth Hollingworth, who noted Ellery’s cooperation with a probe of Securency and Note Printing Australia Ltd., both of which have been accused of bribing officials in Malaysia, Indonesia and Vietnam to win  contracts to supply polymers for banknotes.

Hollingsworth said in her ruling that the senior investigator in charge of the Securency probe has said Ellery’s 72-page witness statement in the probe is “highly accurate.” Moreover, she noted that he handed over hard drives and gave a detailed illustration of the corporate culture of Securency during the period in which the bribery took place.

“You were acting within the culture which seems to have developed within Securency, whereby staff were discouraged from examining too closely the use of, and payment arrangements for, overseas agents,” the ruling said. “Secrecy, and a denial of responsibility for wrongdoing, also seem to have been part of the corporate culture at Securency at that time.”

Securency, which is half-owned each by the RBA and Innovia Films, makes the polymer substrate used in banknotes in 27 countries. They’re trying to sell it off; it’s been embroiled in scandal since 2009 relating to the alleged bribery conspiracy and other misconduct.

Ellery admitted to concealing a $79,502 payment to a Malaysian agent, saying that the money was a reimbursement for “marketing expenses.”

“You will be an important prosecution witness in any committal or trial in relation to the conspiracy charges,” the judge wrote in the ruling, citing remarks from the senior investigator.

More coverage of the sentencing is available here, here and here.

Read the ruling below:

Ellery ruling

Samuel Rubenfeld

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Posted in: Corruption