Bank chiefs knew of bribe claims

Denial … Glenn Stevens, Governor of the Reserve Bank of Australia insists that no cover up has taken place. Responsibility … former treasurer Peter Costello wants the banks to report credible evidence to the police.
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One step further … former federal Liberal leader, John Hewson, wants a royal commission.

THE Reserve Bank’s internal lawyer, chief auditor and an assistant governor all knew, in June 2007, of an explosive memo sent that month to the ”deputy governor RBA” detailing alleged overseas bribery by a firm owned by the central bank.

It can also be revealed that for months the Reserve withheld from police critical information it had about bribery. These revelations come after the governor of the bank, Glenn Stevens, yesterday denied any attempt to cover up evidence of bribery and told Federal Parliament’s economics committee he could not recall when he first read the June 2007 memo written by the company secretary of Note Printing Australia, Brian Hood.

Mr Stevens cast doubt on whether his then deputy, Ric Battellino, received the memo, even though it was Mr Battellino who asked Mr Hood to put his bribery concerns in writing – by saying the document might have been sent directly by Mr Hood’s lawyer at law firm Freehills, which was conducting an inquiry on the Reserve’s behalf.

But internal Reserve files seen by the Herald reveal that assistant governor Frank Campbell was aware of Mr Hood’s memo in June 2007. The files show the Reserve’s internal lawyer, Helen Brown, and the then chief audit officer, Paul Apps, were also aware of it and its explicit evidence of NPA’s involvement in bribery.

This week the Herald published Mr Hood’s memo, which detailed admissions by NPA’s agents in Malaysia and Nepal of having paid foreign officials to win banknote printing contracts.

Instead of referring Mr Hood’s bribery concerns to the federal police, the bank called in Freehills to advise whether Australian law had been breached. In a report the bank has so far refused to release, Freehills said it was unable to detect a breach.

The Reserve was forced to contact federal police in May 2009 after Fairfax Media exposed multimillion-dollar payments to shady overseas agents by NPA’s sister firm, Securency. Federal police have since charged NPA, Securency and eight former executives with bribery offences involving deals in Vietnam, Indonesia, Malaysia and Nepal, the two countries to which Mr Hood’s memo explicitly referred.

Under questioning yesterday, Mr Stevens said he could not recall when he first read or was aware of Mr Hood’s memo. ”I did not read it at that time [2007]. It wasn’t given to me, that is my memory,” he said.

The handling of the bribery scandal by the Reserve and the Gillard government has come under scrutiny this week, with the former treasurer Peter Costello saying the bank has a responsibility to report credible evidence of criminality to police. A senior federal police officer Chris McDevitt has confirmed the Reserve had known about bribery at its subsidiaries for years before it alerted police.

The former federal Liberal leader John Hewson and former foreign minister Alexander Downer yesterday challenged the government to hold a royal commission into the scandal, which has also ensnared other Commonwealth agencies such as Austrade.

Writing for the ABC website The Drum, Dr Hewson said it was ”not good enough to have to rely on the stilted testimony” of Mr Stevens.

Mr Stevens told the committee he was seeking legal advice about tabling documents significant to the case.

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Retail sector defies prophets of doom with profits in sales

Colliers’ research director said the retail investment market had been strongest in Queensland, with 26 sales.INVESTORS are defying the retail sector’s doomsayers, with 83 big sales valued at $4.244 billion in 2011-12, 8 per cent more than the previous financial year.
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The latest Colliers International National Retail Investment Review 2011/12, which covers transactions greater than $10 million in Australia, found that nearly all of the top 10 largest sales in 2011-12 took place in the first half of this calendar year.

Lachlan MacGillivray, Colliers’ national director of retail investment services, said investor demand for quality shopping centres was resilient despite volatility in monthly retail trade data and the structural challenges the sector was facing.

Also, interest in prime regional shopping centres had been strong from institutional investors from Australia and overseas, with demand exceeding supply.

“Increased demand came from domestic wholesale funds, as well as offshore sovereign and pension funds,” he said.

Mr MacGillivray said overseas purchasers were keen to form joint ventures with local retail players. Sales of half-shares in prime assets had surged, with seven of the top 10 sales in 2011-12 being for 50 per cent shares. Overseas interest was particularly strong for prime regional and sub-regional assets.

Neighbourhood centres led activity with 35 sales, but interest in regional centres was historically high, with seven centres comprising 44 per cent of all sales by value.

“The number of sub-regional centres sold tripled to 15, which was the largest jump in sales volume of all sectors,” he said.

Nora Farren, Colliers’ research director, said it was the market’s largest positive spread between bond yields and property yields in more than a decade, and demand for assets should outstrip supply for the rest of the year.

Ms Farren said the retail investment market had been strongest in Queensland, with 26 sales, including three of the top 10 sales recorded.

These were a 50 per cent share in the Myer Centre Brisbane by the Industry Superannuation Property Trust for $366 million, a 50 per cent share in the Cairns Central shopping centre for $261 million by Australian Prime Property Fund Retail, and Noosa Civic at Noosaville for $200 million, to the Queensland Investment Corporation.

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Mosaic forms pretty picture

Artist’s impression of the Mosaic development in Dandenong.AN $85 million project involving luxury apartments, offices and shopping outlets, coupled with strong demand for new office-warehouses, is a pointer to the continuing buoyancy of the state government’s $290 million Dandenong revitalisation strategy.
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Mosaic, designed by Peddle Thorp Architects, comprising 235 one or two-bedroom apartments, offices and retail spaces, has just hit the market. It is part of the Metro Village estate being built near the Dandenong city centre.

Mosaic is designed around a landscaped courtyard that will provide a central meeting space for residents. According to the developer, Burbank, most apartments achieve a 7-Star energy-efficiency rating through cross-ventilation and double-glazing.

Dandenong is relying on the area’s upgraded transport network to foster residential, office and industrial development.

EastLink and the Monash Freeway provide faster access, while the Dandenong Bypass, coupled with the freeways plus the South Gippsland Highway, create what is effectively a ring road. This is designed to take heavy traffic out of the centre of the city.

The impending opening of the new EastLink connection to Peninsula Link, scheduled for completion early next year, will also create new links between Dandenong, Frankston and the Mornington Peninsula.

Colliers International’s Paul Jones said these factors were encouraging projects in the industrial estate. Developers were increasingly using previously ”dead” space to build speculative 1400 to 2000-square-metre premises.

Mr Jones said most demand was for properties with two-storey offices, with most inquiries coming from businesses looking to lease or buy.

Mr Jones and colleague Colin Tarlamis are marketing several high-quality properties in Arkwright Drive and Rodeo Drive in Dandenong South, and in Pacific Drive, Keysborough. The properties are all close to the major transport routes, including Greens Road.

The agents are also marketing 13,886 sq m of speculative development with Governor Road frontage in Braeside. Buyers have already snapped up 11 of the 14 properties in stage 1 of the project.

Encouraged by this, the developer is about to start work on stage 2, which is scheduled to start next month. This will involve the construction of a further 10 properties.

Mr Tarlamis said the response to this estate was a prime example of the interest he had seen from businesses keen to relocate closer to EastLink.

”We have a lot of people asking us about the Hastings railroad and Port of Hastings, as Keysborough, Dandenong and this section of Braeside will become a central point between the Melbourne CBD and the prospective new port,” he said.

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Murdoch’s daughter aiming for the top

ELISABETH MURDOCH’S attack on the values of News Corporation is part of a ”strategic” plan by the family to retain power over the $US55 billion media empire and was a ”significant Murdoch moment”, says a keen observer.
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Ms Murdoch, the second-eldest of Rupert Murdoch’s six children, emphasised humanity over profit in a keynote address to the TV industry that is being widely read as her pitch to lead the family business.

In a speech that attacked free market capitalism and the idea that ”money is the only sorting mechanism”, Ms Murdoch, 44, outlined her vision for leadership.

Michael Wolff, the author of an authorised biography of Rupert, said the speech would have been written with the full support of her father and all but one of her siblings – James – who control the majority of voting stock in News Corp.

”Nobody in the Murdoch family does anything unilaterally. Clearly she has swayed the votes and they are supporting her,” said Wolff, journalist and author of The Man Who Owns the News.

In her MacTaggart lecture at the Edinburgh international TV festival on Thursday night, Ms Murdoch also appeared to criticise James, which will serve only to deepen the rift that opened up between them over the phone-hacking affair.

Ms Murdoch said News Corp had to ask ”significant and difficult questions about how some behaviours fell so far short of its values” following the scandal. She said the lesson from the affair was that any organisation needed to ”discuss, affirm and institutionalise a rigorous set of values based on an explicit statement of purpose” – in contrast to News Corp’s traditional mode of governance based on executives second-guessing what Rupert would do.

”Profit without purpose is a recipe for disaster,” she said, in a direct reference to a speech by James at the same industry gathering three years earlier in which he extolled the idea that profit was the only ”guarantor of independence”.

Wolff said that now James has been effectively sidelined in the company, the speech marked Ms Murdoch’s return to power, most likely as the head of the entertainment business once the organisation splits next year. Ms Murdoch rejoined the family business last year after she sold her TV production company Shine to News Corp for $440 million. Wolff also predicted Lachlan Murdoch would head publishing, as much of its operations are based in Australia.

Lachlan’s spokesman told the Herald last week his focus was on building up his own business, through his private investment vehicle Illyria. ”I think you will end up with two Murdochs heading up the two companies. This [speech] was a very significant Murdoch moment,” he said.

with Guardian News & Media

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