RBA didn't act on alert about agent in Vietnam Ties with spy agency suspected
The Money Makers - Ties with spy agency suspected

RICHARD BAKER and NICK McKENZIE

A RESERVE Bank of Australia subsidiary under investigation for alleged corruption ignored a federal government warning that payments to a Vietnamese businessman may constitute bribery.

Polymer banknote maker Securency International was warned by Australia's trade agency Austrade in March 2007 and April 2008 that its Vietnam agent Anh Ngoc Luong was believed to be a representative of the country's powerful Ministry of Public Security.

Under Australian laws, it is a criminal offence to pay a foreign government representative in order to obtain a business advantage.

Despite this warning, The Age has learnt, Securency, which is half-owned and supervised by the RBA, continued to pay Mr Luong for at least a further 12 months.

The warning arose after Securency's board in early 2007 requested Austrade to make secret background checks on some of the company's overseas middlemen amid fears it could be exposed to corruption.

Austrade had to make the checks without Securency's senior management or the relevant agents knowing they were being done.

Securency is under investigation by the Australian Federal Police for alleged bribery in Vietnam and Nigeria.

Its headquarters were raided by federal agents last November, as were the homes of its managing director and company secretary. Both have been stood down by the RBA until the police inquiry concludes.

Austrade has denied access to the background checks on Mr Luong and his company CFTD under the Freedom of Information Act after Securency appealed against their release to The Age. Austrade said the release of the documents would potentially damage Securency's business affairs.

Indicating the trade agency also drew on the resources of foreign intelligence contacts to conduct the checks, Austrade said disclosure of the documents could harm the "future supply of information" to the Australian government.

Despite Austrade's refusal to release the checks, it is believed Securency executives and board members were told that Mr Luong was a suspected representative of the Ministry of Public Security, which is one of Vietnam's main intelligence and security agencies.

Although Austrade said it could not be certain of the suspected link, it advised Securency to seek legal advice if it had concern about its payments to Mr Luong and potential exposure to Australia's anti-corruption laws.

Mr Luong is also regarded as being close to Vietnam's Prime Minister, Nguyen Tan Dung, who was the country's central bank governor when it first started dealing with Securency.

Mr Luong and other CFTD directors, who include one of Vietnam's representatives to the United Nations in New York, regularly travel in overseas delegations with the PM and other senior Vietnamese ministers.

Securency's board at the time was chaired by former RBA deputy governor Graeme Thompson. He was stood down in 2007 and has repeatedly refused to discuss with The Age his time as chairman of Securency.

The police investigation of Securency is expected to continue for several months.

A separate audit of the company's activities by forensic accountants from KPMG, including arrangements with middlemen, continues.