Ann: FY2014 Half Year Results , page-4

couple of articles with some of the goings on from 13 till now.

Link to a site
http://fireredflex.com/


Thanks to http://netrider.net.au/threads/the-redflex-thread.146117/page-3 for getting articles on a thread.



Brought to a halt by a legal red-light
by: CRITERION from: The Australian March 05, 2013

IN motoring parlance, the Pratt group-backed Redflex has been zapped by its own traffic camera and no amount of legal niceties will protect it from the reputational fallout.

A Redflex-appointed inquisitor said corruption allegations -- dismissed in an earlier investigation -- "did, in fact, have merit".

Releasing a precis of the four-month independent inquiry by law firm Sidley Austin, Redflex Holdings (RDF, $1.13, in trading halt) announced the departure of Karen Finley, long-serving head of its Phoenix-based US arm Redflex Traffic Systems Inc (RTSI).

Finley was respected by investors and her exit notches up automatic demerit points against Redflex.
Also gone are RTSI chief finance officer Sean Nolen, general counsel Andrejs Bunkse and RTSI vice-president of business development Aaron Rosenberg.

Locally, head office MD Graham Davie retired last September, to be replaced by US-based Robert DeVincenzi, who now assumes a group el-presidento role. Chairman and leading industrialist Max Findlay called it a day last month.

The genesis of the troubles were 2010 allegations, raised by a whistleblower, that payments made to a Redflex consultant were passed on to John Bills, the City of Chicago employee responsible for running the Windy City's red-light contract.

In October last year Redflex described the allegations -- investigated by another outside law firm -- as "without merit", except for a $910 hotel bill dubbed as a "billing error".

After prodding by intrepid hounds at the Chicago Tribune, Redflex engaged Sidley Austin for a second probe, which concluded the first investigation was "clearly inadequate".

According to Redflex's summary, the arrangements between the city program manager, the consultant and Redflex were "likely to be considered bribery by the authorities" and that Redflex provided some "vacation-related expenses", as well as "other items of value to the . . . program manager in violation of the City of Chicago's government ethics ordinance". The vacation payments totalled $20,000.

Sidley Austin couldn't say whether some of the $2.03 million paid by Redflex to the consultant was passed on to Bills. "But under the applicable law, the authorities may still consider this arrangement to be bribery even if the payments were not, in fact, made."

Bills and the consultant refused to be interviewed by Sidley Austin and reportedly deny any wrongdoing. Redflex has initiated a compliance and ethics program, but in a financial sense the damage is done: Barack Obama's home town won't grant an extension to the contract, which accounts for 13 per cent of Redflex's revenues.

Also yesterday, Redflex disclosed a 50 per cent first-half net earnings decline to $3.6m, on a 7 per cent revenue decline to $69m.

Redflex shares resume trading today, having been frozen since February 27.

Criterion had Redflex as a sell at $2.12 last May, on other concerns about its US presence. Bear in mind that hiring lobbyists has always been part of the way Redflex (and detested arch-rival ATS) does business.

We'll reserve our call. Suffice to say, while every stock has its "right" price, the fallout from corporate scandals lingers long after the mea culpas.

http://www.theaustralian.com.au/bus...-legal-red-light/story-e6frg9lo-1226590289666




http://www.thenewspaper.com/news/41/4101.asp
Chicago, Illinois Inspector General Rejects Red Light Camera Justification
City audit shows Chicago, Illinois unable to justify red light cameras as a safety tool.

Audit report coverThere is no evidence that the world's largest red light camera program is operated as a safety program, according to a report released Tuesday by the inspector general for the city of Chicago, Illinois. The independent investigation comes as Redflex Traffic Systems continues to operate every aspect of the automated ticketing program despite Mayor Rahm Emanuel's promise to cut ties with the Australian firm.

Earlier this year, Redflex was caught in a $2 million bribery scheme designed to ensure Windy City officials would continue adding new cameras to boost the company's bottom line. The audit results are consistent with the suggestion that the locations for the new cameras were selected for the benefit of Redflex, not city residents.

"CDOT [the Chicago Department of Transportation] was unable to substantiate its claims that the city chose to install red-light cameras at intersections with the highest angle crash rates in order to increase safety," the report found. "Neither do we know, from the information provided by CDOT, why cameras in locations with no recent angle crashes have not been relocated, nor what the city's rationale is for the continued operation of any individual camera at any individual location."

The city gave Redflex $19.1 million for 384 cameras stationed at 190 intersections. Redflex has no financial incentive to issue additional tickets because it is paid the same $52,740 annual fee for each camera whether the location issues 328 citations or 19,805 (the lowest and highest volumes recorded at an intersection, respectively). In 2012, Redflex issued 612,278 tickets, collecting $71,943,053 in revenue.

Redflex offers a turn-key operation, leaving municipalities with no true responsibilities. So when the inspector general asked for crash data that might justify the cameras, Chicago responded that it does not collect the sort of reliable data that the audit requested. An independent analysis conducted by a University of Chicago adjunct professor in 2010 found no accident reduction where cameras were used (view report). The city also failed to provide any documentation that the yellow signal timing at the photo enforced locations is appropriate for traffic conditions. Chicago just uses a blanket 3 seconds for intersections with a 30 MPH posted speed limit and 4 seconds for 35 MPH intersections.

"We found a lack of basic recordkeeping and an alarming lack of analysis for an ongoing program that costs tens of millions of dollars a year and generates tens of millions more in revenue," the report stated.

The inspector general recommended the city come up with guidelines regarding selection of camera locations that would allow independent verification of whether continued camera use makes sense. When Chicago names another vendor to take over the red light camera program, Redflex will walk away having earned $106 million since the program began.

A copy of the audit report is available in a 1.1mb PDF file at the source link below.

Source: PDF File Red light camera installation audit (Inspector General, City of Chicago, 5/14/2013)



http://www.news.com.au/world/breaki...us-bribe-scandal/story-e6frfkui-1226919764658

THE US arm of Australian red light camera operator Redflex Holdings Group is embroiled in a corruption scandal in Chicago, with a former city official facing a 10-year prison sentence after allegedly being lavished with cash, a condominium, hotel stays and golf games.
US government prosecutors allege John Bills, the former managing deputy commissioner of Chicago's transportation department, pocketed benefits totalling hundreds of thousands of dollars to steer $US124 million ($A134.16 million) in city contracts to Arizona-based Redflex Traffic Systems Inc.

Prosecutors declined to say if current or former Redflex employees will be charged when the probe is completed. However, the company is not accused of any wrongdoing.

"The investigation is continuing, but I can't be specific as to who or what that may involve," Randall Samborn, spokesperson for the US Attorney for the northern district of Illinois, told AAP on Thursday.

Redflex's global headquarters is in Melbourne.

The indictment against Bills, a 52-year-old Chicago resident and 32-year City of Chicago employee, alleges he used his influence to help Redflex win contracts.

Prosecutors have granted immunity to a former Redflex employee, codenamed "CS1", who allegedly worked closely with Bills.

CS1 and others at Redflex allegedly paid for at least $US23,000 worth of hotels, car rentals, meals, golf games and other personal items for Bills.

"According to individuals at Redflex, the Chicago contract was the most important contract for the company, both because of the revenues it generated as well as the name recognition it gave to Redflex," the criminal complaint reads.

"By 2010, the Chicago red light program was the largest red light camera program in the United States and encompassed 20 per cent of the total camera systems that Redflex operated in the US."

Another key figure in the investigation is a friend of Bills, named in court papers as Individual A.

On Bills' suggestion, Individual A was hired by Redflex as its "Chicago customer liaison" and paid more than $US2 million in salary, bonuses and commissions, according to prosecutors.

CS1 told investigators he and his superiors "had explicit conversations about Individual A serving as a conduit to get money to Bills in return for Bills' help in getting Redflex the City of Chicago contract, and for Bills' help in ensuring that Redflex's contract would potentially be expanded and renewed in the future".

Individual A, between 2006 to 2011, withdrew more than $US643,000 in cash and prosecutors allege Bills and his wife made major cash bank deposits or purchases, including paying for a Mercedes-Benz convertible, a boat and at least 35 trips.

Prosecutors also allege Bills paid his divorce lawyer in cash and used $US16,000 in money orders to pay his girlfriend's mortgage.

When Bills retired in 2011, he allegedly "made it known" to CS1 and other Redflex employees he wanted a job with Redflex.

Redflex allegedly arranged for Bills to get a job with a company funded by Redflex.

Once the company hired Bills, Redflex allegedly increased its monthly contribution to the company to help pay Bills' salary.

Bills was arrested on a federal bribery charge in Chicago on Wednesday.

His lawyer, Nishay Sanan, denied Bills had taken bribes and claimed Redflex was trying to make Bills the scapegoat.

Redflex, in a statement, said it had "fully co-operated with the authorities" and after an internal investigation "announced new leadership, new policies and a line between our past and today's Redflex".