SA men in plastic banknote scam

A group of South African businessmen is embroiled in an international investigation of multimillion-dollar commission payments made by an Australia-based banknote company.

Securency International, which is jointly owned by the Reserve Bank of Australia and British company Innovia Films, is under investigation by the Australian Federal Police and Britain’s Serious Fraud Office over commission payments of some $50-million since 2003 to a network of politically connected agents employed to help secure contracts.

Investigators suspect some payments included bribes channelled to decision-makers.

One key leg of the investigation relates to payments flowing from the decision of the Nigerian central bank to adopt Securency’s “plastic” polymer-based notes in preference to “paper” money.

Evidence seen by the Mail & Guardian shows commission payments amounting to 12% of the net amount received by Securency flowing from the Nigerian contract were paid to a front company set up in the Seychelles but apparently controlled by a group of South Africans.

The Seychelles company, SPT Limited, has two pro forma directors drawn from the Seychelles trust company that acts as the administrator, but includes one South African director, John McKay. The Seychelles administrator, the Mayfair Trust Group, would not comment.

McKay, a Pretoria accountant, appears to represent South African interests in SPT. It is understood that SPT paid regular dividends to two entities, the St Christopher Trust and the Martindale Trust, believed to have South African beneficiaries.

Other evidence seen by the M&G suggests that SPT is controlled or directed by a South African company, AHN Pharma, or its managing director, Dave Marais.

AHN, under the name UCB SA, was previously the South African branch of Belgian chemical giant UCB, which owned 50% of Securency until 2004 when its share was sold to Innovia. AHN still markets UCB’s medical products in South Africa. It appears that AHN still has a relationship with Securency or its officers.

A former shareholder in AHN told the M&G that one-time Securency manager for Africa, Peter Chapman, had extended a loan to AHN and might also have a shareholding in AHN. Chapman resigned from Securency in September 2009 and is believed to have moved from the United Kingdom to Brazil.

Another South African, Don McArthur—former managing director of the Macmed Healthcare Group, which collapsed in 1999—this week denied having any shareholding interest in AHN or ever acting as an agent for Securency.

McArthur confirmed he markets HIV testing kits on behalf of AHN. But attached to his 2008 plea bargain in the Macmed collapse is a biographical note, apparently written by McArthur, which states: “I am unemployed and work on a commission of sales basis for Securency and UCB.”

McArthur pleaded guilty to reckless trading while at Macmed and paid a fine of around R2-million.

His co-director at Macmed from March 1996 until its collapse three years later was Dave Marais, who was not charged in the Macmed matter.

When the M&G put it to McKay that SPT was a front for AHN or Marais, he said he would speak to Marais about the matter and call back. He failed to do so. Marais could not be reached. His secretary at AHN said he was “in the bush” and probably out of cellphone range, though she had sent him an SMS.

The M&G could not verify claims by an Australian source that other payments from Securency were made into another Seychelles account in the name of Swimseal. This is a South African company of which McKay, Marais and McArthur are listed as directors. Swimseal, ear-drops for swimmers, is marketed by AHN.

The M&G has also seen evidence that SPT concluded “sub-agency” agreements in respect of Nigeria with two entities: Joseph Raad and JHM Global. Raad is the honorary consul for Iceland in Nigeria.

The Australian newspaper The Age, which first broke the Securency story, reported earlier this year that Securency paid Raad undisclosed sums into three bank accounts in Spain, Germany and Britain in return for his help in pursuing banknote supply contracts.

According to the answer given in Australia’s Parliament, JHM Global is linked to UK-based businessman Michael Harding, who worked for many years in Africa for the Unilever group.

Harding is understood to have been questioned and released during raids by the Serious Fraud Office earlier this month in connection with the Securency investigation.

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