Glenn Stevens
Glenn Stevens

RBA chiefs front bribe inquiry

FORMER Reserve Bank chief Ric Battelino has denied he had told a whistleblower to keep quiet about an alleged bribery scandal involving a bank subsidiary and overseas agents.

RBA Governor Glenn Stevens, Assistant Governor Frank Campbell and Mr Battelino, former deputy governor, fronted a parliamentary committee on Monday to answer questions about the scandal which has been unfolding over several years.

The matter centres around the alleged payment of bribes to overseas agents for two RBA subsidiaries, Note Printing Australia and Securency.

Former NPA company secretary Brian Hood first raised his concerns about the alleged bribes with the NPA board and some RBA members in 2007, sparking internal investigations by an audit committee led by Mr Battelino.

After Mr Hood blew the whistle on the alleged criminal activity at NPA, the audit committee investigated the issue, sacking the agents and asking law firm Freehills to conduct another independent investigation.

Mr Battelino repeatedly said the Freehills' investigation found no evidence of criminal activity, but crucially, the law firm was not given access to the agents themselves as part of its investigation.

While Freehills reported back in 2007, that report has not been released publicly and no one from NPA or the RBA reported the allegations or its internal audit to police until a Fairfax media report in 2009.

Mr Hood left NPA in 2008 and last week told a different parliamentary committee that Mr Battelino told him to keep quiet about his allegations and the pursuant investigations.

Mr Battelino denied telling Mr Hood to keep the allegations confidential.

"It would have been an absolutely pointless thing to say; it was Mr Hood who wanted secrecy around this - we offered him every protection," he said.

Both Mr Stevens and Mr Campbell, who attended the farewell lunch, told the committee they had never heard Mr Battelino tell Mr Hood to keep mum.

"It was Mr Hood that insisted on secrecy around this.

"If I have one regret on this it is that we, the bank, put Mr Hood's interests ahead of its own in keeping this secret," Mr Stevens said.

Mr Battelino told the committee he and others respected Mr Hood's role in exposing the problems at NPA.

But he said the committee should be aware, in the interests of "transparency", about a claim Mr Hood made to the RBA after his departure from NPA in 2008.

After questions were posed about why no-one contacted the federal police about the issue until 2009, Mr Battelino said he was defending Mr Hood's request that his memo alleging the wrong-doing be kept confidential.

Charges laid against several key players in the scandal were still before the courts, restricting much of the testimony able to be heard during the special committee hearing on Monday.

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