Allegations surround Wilson Security’s link to HK bribes scandal and tax haven
Exclusive: company faces renewed questions over its fitness as security contractor at Australian detention centres on Manus Island and Nauru
Wilson Security faces renewed questions about its fitness as security contractor in Australia’s offshore detention centres in light of its corporate links to a tax haven, a corruption scandal that has embroiled its Hong Kong owners and allegations that hundreds of staff have been underpaid.
Wilson is considering legal action to stop former staff speaking out against the company, which managers fear is jeopardising its prospects of winning a new nine-year contract at the Nauru and Manus Island detention centres.
Guardian Australia can reveal the corporate trail that links Wilson Security to its ultimate owners, the Kwok family in Hong Kong, a key member of whom was jailed in December as part of the territory’s highest-profile graft case.
Thomas Kwok was sentenced to five years for conspiracy to commit misconduct in public office for giving $5m in bribes to a Hong Kong government official in return for favourable treatment of the Kwok family-controlled Sun Hung Kai Properties, a $62bn company.
His brother Raymond, a founding director of Wilson’s Australian parent company, was also charged but found not guilty.
Wilson Security, whose security contract for Manus Island and Nauru expires next month, is privately owned by the Kwok family through a corporate structure that includes companies in the British Virgin Islands, a recognised tax haven.
The use of tax havens to minimise company tax in Australia is the focus of a federal Senate inquiry due to report in November, while the issue globally was among the pressing topics raised at the G20 world leaders summit in Brisbane last year.
United Voice, the union representing security guards, has revealed it is pursuing $669,255 in wages allegedly owed by Wilson to 205 detention centre staff.
Sue Lines, the Labor senator for Western Australia and a former official with the union, told Guardian Australia the company should be “ruled out immediately” from the government contracts.
“If the government appoints Wilson again, it just shows there are no thorough processes and they’re prepared to appoint a company which has got very serious concerns around how it operates,” Lines said.
“To allow these multinational corporations, which seemingly abide by the law but use whatever tax havens there are to take their money offshore and limit their tax here – particularly when a company is contracting to the Australian government and being paid handsomely for its services – is just not right.”
An internal company email seen by Guardian Australia reveals Wilson is weighing up legal action against former staff in the wake of negative publicity.
A former “behavior management” section employee Chenoah Rose last week accused Wilson of failing to take seriously her claims of sexual harassment by a direct supervisor on Nauru who was later promoted.
The day Rose’s claims that harassment and bullying were “rife” among detention centre staff went public, Wilson’s general manager of regional operations, Cris Rielly, told staff in an email that the company was “considering what, if any, legal action it should take to ensure no further damage to its reputation”.
“Wilson is concerned about the breach of non-disclosure and confidentiality obligations by former employees and the damaging effect it is having on its prospects of securing the future contract for provision of security services,” Rielly said.
A United Voice campaigner, Damien Davie, told Guardian Australia the jailing of Kwok in Hong Kong raised questions “about the reputation of Wilson’s owners if that’s what occurs up the top”.
“You’d have to wonder what the governance is like at the level of the islands and we’re concerned about cover-ups,” Davie said. “We don’t think they’re fit to hold the contract.”
A Herbert Smith Freehills solicitor, Tony Joyner, who represents Wilson, said it was “misleading and unfair” to link the company to the Hong Kong corruption affair.
He said Wilson’s operations were entirely separate from Sun Hung Kai Properties, the Kwok family-controlled company at the centre of the bribery case.
Wilson Security is a subsidiary of Wilson Parking Australia 1992, whose financial return filed with the Australian Securities and Investments Commission last year details its corporate links to the British Virgin Islands.
The Australian company is owned by Wilson Parking Holdings, which is registered in the low-company-tax jurisdiction of Singapore.
The Singapore company is held by a shelf company in the British Virgin Islands, Wilson Offshore Group (BVI) Holdings Limited, which is in turn owned by another company in the same jurisdiction called Genuine Result Limited.
The 2014 financial report shows no sign that Wilson Security’s Australian parent benefited from a lower effective tax rate, having paid 29% – just below the nominal company tax rate of 30% – on its net profit of $32.5m. It made $708m in revenue, the bulk of it from its parking business.
Wilson has denied any link between Genuine Result and SHKP. But it has acknowledged the BVI company is owned by private Kwok family interests.
Hong Kong prosecutors argued that Kwok bribed the territory’s former chief secretary Rafael Hui with free stays in luxury apartments, cash and loans between 2000 and 2009 in exchange for inside information for SHKP on government decisions and contracts.
Kwok, Hui and another SHKP executive are appealing their convictions in Hong Kong’s high court in November.
In Rielly’s email last week, he referred to Rose’s sexual harassment complaint, telling staff that a company investigation found it was “unsubstantiated”.
“The individual claimed to have evidence supporting the allegation, however to this date has been unwilling to supply this despite repeated requests,” he said.
“Wilson Security takes matters such as these very seriously and will reopen investigation if actual evidence is presented that conflicts with its findings in the first instance.”
Rose has claimed that she submitted her work logs and screenshots of computer messages to back her claim.
Asked about possible legal action against former staff, a Wilson Security spokeswoman said its confidentiality provisions “exist for the protection of the employees, the people they care for and the commonwealth”.
The spokeswoman said Wilson was unaware of the wage claims but it disputed the union’s “interpretation of a clause in the enterprise agreement relating to Nauru employees only”.
“We are disappointed that United Voice has not utilised the appropriate procedures for putting the claim to the Company,” she said.
