Private equity group, Candover, has been hit by a international bribery investigation, with five arrests in Britain and allegations of the payment of millions of dollars into offshore tax havens.
It has been reported that Candover is planning to appoint an investment bank early next year to sell Innovia Films, which employs more than 1,400 people. The group, based in Cumbria, manufactures film for the global packaging industry that is used in supermarkets. However, Innovia’s 50 per cent-owned printing firm, Securency International, which produces a polymer coating for banknotes, is under investigation by the Serious Fraud Office (“SFO”) after several of the firm’s employees allegedly secured contracts for deals by bribing officials.
Securency, a joint venture with the Reserve Bank of Australia and headquartered in Australia but with staff in Britain, supplies a range of chemicals, including polymer, used for printing banknotes and security documents to more than 31 countries.
Since October five arrests relating to Securency have been made after 80 SFO investigators and police across Britain raided nine buildings. In October, a British couple, were arrested at Gatwick Airport while Securency’s British-based former head of global sales, Mr Hugh Brown, was bailed after his arrest. Two other people were later arrested in the Thames Valley area.
Australian and American authorities are also investigating the company and SFO director, Mr Richard Alderman, has said that it is an “excellent example of how anti-fraud agencies work together to fight economic crime”. (see p2 of this Digest for the mirror expression of DoJ pleasure in its co-operation with the SFO).
The Australian Trade Commission, Austrade, told an Australian government committee that police had seized its documents relating to the Securency inquiry. According to Austrade, a UK based company, Global Secure Currency, was engaged by Securency to act as its Nigeria agent from 2005 to 2006.
Two weeks ago Candover appointed Macquarie Group to sell Securency, after Reserve Bank of Australia also agreed to dispose of its 50 per cent stake.
Securency International had its headquarters in Melbourne raided by Australian police last week.
Earlier this year it was reported that police had launched an inquiry into the business amid allegations that millions of Australian dollars had been paid in commissions to offshore bank accounts. Managing director, Mr Myles Curtis and company secretary, Mr John Ellery, have stood down from Securency International until the police inquiry is complete.
The board revealed two weeks ago that both individuals had failed to inform Innovia Films and the Reserve Bank of Australia of an internal complaint by a staff member in 2007 about the company’s payments to agents in two countries.