The Perth Mint has confirmed it is closing a controversial app that allows investors to buy and trade gold, as the minister responsible for the embattled organisation fronts the media for the first time.
Until today, Mines Minister Bill Johnston had not spoken publicly since a Four Corners investigation into the mint aired two weeks ago, having been away on an international trade mission to the US, Canada, South Korea and Japan.
He said he was not aware of the taxpayer-owned refinery breaching any Australian regulations, while defending his decision not to tell the Premier about issues with gold sold to China.
"I want to reassure all West Australians that the state government is taking very seriously the mint's obligations in terms of its historical regulatory non-compliance," he told journalists, pointing to $34 million given to the organisation to improve systems and processes and hire more staff.
The 124-year-old organisation's CEO, Jason Waters, also addressed the media, confirming the mint's plans, revealed by the ABC, to close its GoldPass app have been around since last year.
The smartphone app allows users to buy, sell and send gold and silver with little more than a driver's licence and bank account under the same name.
CEO backs decision to shelve app
Mr Waters said the decision to shut down the app was made prior to him taking up the role in April 2022, but that he supported it.
"It seems to be a product that didn't fit right," he said.
"We're a refinery business and a mint.
"We make world-class coins that we sell around the world, and for me, I was certainly very pleased to continue to support the decision that we exit GoldPass."
He stood alongside the mint's chair, businessman Sam Walsh, who has faced weeks of pressure to answer questions about what he knew of various controversies, and denied the app was being shut down because of concerns it breached legal requirements.
"We had financial targets for the medium we were using there. It didn't meet those and strategically we made a decision that we would withdraw from it," he said.
Mr Waters did not comment on plans by the mint and the company running its cryptocurrency to shut down the Perth Mint Gold Token (PGMT), saying those negotiations were confidential.
Earlier, Premier Mark McGowan – who was the Minister responsible for the Mint at the time the cryptocurrency was launched – said he didn't have any recollection of the matter coming to his attention.
Mr Johnston said he understood notice of terminating the GoldPass app was given last year, but when asked why that was not made public, said that was an "operational" question.
The Mines Minister described the mint as a "complex" business operating under state, federal and international laws.
"But the McGowan government is the first of successive governments over several decades, including the previous Liberal National government, to begin the real work of addressing these issues," he said.
"The business has acknowledged there have been shortcomings in its past that led to non-compliance with some relevant laws.
"It voluntarily reported those errors and has strengthened its processes ever since."
He told reporters West Australians could be reassured the best interests of taxpayers had been top priority at all times, speaking also of the organisation's "refreshed" management team.
Mint working with US regulators
He said while all Australian laws were being complied with, the mint continued to work with US regulators to ensure it was fully compliant with what's known as the Model State Commodity Code.
The ABC revealed last week that those breaches could date back as far as 1998, and span across hundreds of accounts holding hundreds of millions of dollars worth of precious metals.
The Four Corners investigation found that between 2018 and 2021, some of the gold sold by the mint to the Shanghai Gold Exchange (SGE) met international standards for 99.99 per cent pure gold but fell short of the exchange's specific requirements for silver content.
It potentially affected up to 100 tonnes of gold bullion sold over that time — information the mint did not share with the SGE when it complained about two bars in September 2021.
The mint said by the time the issue was raised with its board in October 2021, it had been rectified and refining processes improved.
Mr Johnston was not told until January 2022 and did not pass that information on to the premier, meaning he only found out because of Four Corners.
"I'm not quite sure what is the issue I should have been informed of," Mr Johnston said today when asked about the delay between the board finding out and him being told.
"By the time I was advised in January 2022, it was a historic issue and no longer was a question in front of the Gold Corporation."
He continued to repeat that all gold sold by the mint met international standards for 99.99 per cent purity, and deflected questions over whether the mint made the right decision in 2018 by making the change to its processes that caused the issues with the SGE.
Mr Waters said while he was not working at Perth Mint at the time, he could understand why that change wasn't brought to the board for approval.
"If I go back and speculate on the thoughts of management at the time, I would say as a business owned by the people of Western Australia to try and find a means of improving the economics of a process is the sort of behaviour that I would say has some positive attributes associated with it," he said.
"How do we get incrementally better, save money, pay more dividends back to the state? I think that's fundamentally part of our purpose."
Mr Walsh denied it was a serious issue, pointing to the SGE's acceptance of the mint's apology and promise to rectify the issue moving forward.
Chair 'committed to learning from past mistakes'
This afternoon's press conference also marked the first time West Australians have heard from Perth Mint chair Sam Walsh in relation to a raft of allegations, including concerns around the gold sold to China, the mint's level of compliance with anti-money laundering and counter-terrorism funding regulations, and compliance with US laws.
"We acknowledge our historical shortcomings and non-compliances and are committed to learning from past mistakes," he read from a pre-prepared statement.
"Change is challenging in any organisation. It takes time, and we have some way to go, but the Perth Mint is making good progress."
Mr Walsh said with the appointment of Jason Waters as chief executive in April 2022, the mint had a "united and fully aligned leadership team".
He also defended not fronting the media sooner, despite consistent pressure for the last two weeks.
"At all times my focus has been on supporting the Perth Mint team and ensuring our governance principles and processes not only meet, but exceed, the expectations of a government-trading enterprise such as ours," he said.
"We have charted a clear course to achieve our goals of living up to the Perth Mint's long, proud and deserved legacy."
Minister should have come out earlier: opposition
Speaking after Mr Johnston's press conference, Opposition Leader Shane Love welcomed the minister answering questions but said it came too late, and two weeks after the Four Corners investigation aired.
"That's two weeks of damaging revelations which continued to bring the reputation of the Perth Mint into doubt," he said.
Mr Love questioned how the premier was not aware of the mint's move into cryptocurrency under his watch.
"It's not acceptable for a responsible minister not to understand the implications of such a move by the organisation, to basically move into a virtual or e-platform," he said.
Despite the government making clear it will not call a royal commission, Mr Love continued to push for one.
While a parliamentary inquiry might find some answers, Mr Love said it would not protect employees who want to speak up about the mint, but could face up to five years in jail for doing so.
Heat on minister in question time
Mr Johnston was on the receiving end of almost all of the opposition's questions during question time in parliament today.
"I apologise to the community for assuming the former government would have done something to require the Perth Mint to comply with the law, and I understand why the opposition is so anxious about this issue," he said in response to a question from Mr Love.
"It is only because of the action of my predecessor, the premier, in starting the reform program, [that we are] starting to get to an improved situation at the mint, that we are now in a position where we understand a pathway forward for the future."
The minister said that was why $34 million was being spent on addressing issues at the mint.
The opposition then moved a motion to criticise Mr Johnston, saying he "absconded" on the international trade mission.
That language was heavily criticised by the government, including Mr McGowan, who said it was "very silly" to suggest the minister absconded, and described the motion as "tawdry and low brow".
