Criminal infiltration, tax avoidance and widespread exploitation of migrant workers have prompted calls for national regulation of the troubled private security sector amid the escalating scandal surrounding the once-booming MA Services Group.
A series of failures by private guards brought up during the coronial inquest into the Bondi Junction stabbing attack has also raised concerns about training, recruitment and different licensing frameworks between states.
The MA Services Group scandal, including allegations of misconduct by founder Micky Ahuja, have further fuelled warnings that public safety could be threatened without federal government oversight and enforcement.
Ahuja fled to Dubai days before his business was placed into administration on Christmas Eve with massive debts to the Australian Tax Office, leaving thousands of guards out of work.
A major investigation by this masthead and 60 Minutes revealed links with an outlaw motorcycle gang, widespread phoenix activity and allegations Ahuja repeatedly harassed and assaulted several female employees.
Ahuja has repeatedly denied any wrongdoing by himself and his company, and has vowed to “clear up every allegation and speak the truth in a no-holds-barred media conference” on Tuesday announced by Sydney-based crisis manager Max Markson.
Industry insiders warn that serious compliance failures are not confined to MA Services Group, with rival security companies routinely underpaying staff, often paying in cash and requiring employees to work 12-hour shifts without breaks.
Industry expert Graham Manson said: “The industry has been infiltrated by crooks, dodginess, sham operators and phoenixing of companies. Basically, the good operators are either getting squeezed out or just can’t compete.”
He warned that legitimate operators were unable to win security contracts from large corporate clients and called for federal government intervention.
“We need national licensing first and foremost,” he said. “But we need a big clean-up, and we need to make example through the courts in terms of these rogue operators.”
Bryan de Caires, chief executive of industry peak body ASIAL, said it had lobbied for a national regulatory framework for more than 30 years, including a register of licensed personnel and standardised eligibility.
“The magnitude of allegations made against MA Services Group raises serious concerns about the effectiveness of current regulatory frameworks,” he said. “The patchwork of industry regulation has created vulnerabilities which have been exploited.”
De Caires insisted that national oversight and enforcement was critical before the Brisbane Olympics, which will require up to 15,000 security staff from across the country.
ASIAL is also concerned about a focus on lowest-cost providers rather than best-value providers, particularly among government and larger corporate buyers of security services.
“This approach has driven a race-to-the-bottom mentality, compromising service quality and compliance,” de Caires said.
NSW government documents show that in December – just days after this masthead revealed serious allegations of sexual harassment by Ahuja and more than two weeks after Ahuja’s links to the Finks bikie gang were brought to light – MA Services Group commenced a $780,000 contract to provide security for the old Tweed Hospital.
At the time that contract began, the company was also one year into another NSW government contract providing security services to the state’s TAFE campuses. If extended to the full possible term of five years, that contract was worth $51 million.
A NSW Treasury official told a budget estimates hearing on Monday that MA Services Group stopped working with state government agencies only on December 23 last year when the company fell into administration,
Security industry veteran Jason Maley worked for MA Services Group for a matter of months in 2019, until he became aware of a series of probity and governance issues that prompted him to resign. He also backs a national response.
“Individual states will need to provide input. However, the federal government must lead the process with a national framework to help vet, audit and challenge security firms wanting to operate in Australia,” Maley told this masthead.
He accused some Australian companies of procuring security contracts that were obviously below award rates and in breach of the law.
“Many officers are not being paid correctly, given the consistent submission of flat-rate pricing around $35 per hour, and at times worse,” Maley said.
He said the widespread use of subcontractors enabled unscrupulous operators to further erode staff entitlements.
“It is abundantly clear that such low prices indicate some form of subcontracting or improper use of the award,” Maley said. “Sometimes, subcontracting goes many tiers down the line until the security officer employed to guard a customer’s critical asset is paid peanuts.”
On Sunday, this masthead revealed the Tax Office and several law enforcement agencies had established Operation Hermes to investigate MA Services over allegations its network of subcontractors supplying guards and payroll services are involved in tax evasion and foreign worker exploitation.
Last April, a New South Wales coronial inquest was told a private security guard, who was the sole control room operator, was in the bathroom when Joel Cauchi began his stabbing rampage at a Bondi Junction shopping centre that left six people dead.
The guard, provided by NSW security firm Glad Group, was supposed to be monitoring CCTV footage of the centre, but only raised an alarm and notified police after Cauchi had been shot by police inspector Amy Scott.
It was revealed the guard had received additional training in the weeks leading up to the attack, with a note about her performance stating she was “not getting better”.
The tragic case raised significant concerns about the training and competency of guards provided to the centre. Lawyers acting on behalf of victims telling the coroner that even a 10-second warning could have saved lives.
The NSW government introduced new laws in 2023 that provided police with additional powers to clamp down on infiltration of the industry by criminals, while also introducing stricter eligibility and visa requirements for overseas-born guards.
Victoria also introduced new measures last year intended to make licensing of security firms more rigorous, improve training and impose additional requirements on the use of subcontractors.
But despite the changes, neither state was able to stop the rampant exploitation of migrant workers by MA Services Group, which picked up lucrative contracts with Coles, Bunnings, Amazon, a swag of AFL clubs, the Formula 1 grand prix and the federal government.
MA Services remained an approved and recommended supplier of guards by the Victorian government until last December, when Government Services Minister Natalie Hutchins suspended it from the government’s supplier panel in response to serious allegations of sexual assault and bullying against Ahuja.
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Nick McKenzie is an Age investigative journalist who has three times been named the Graham Perkin Australian Journalist of the Year. A winner of 20 Walkley Awards, including the Gold Walkley, he investigates politics, business, foreign affairs and criminal justice.Connect via email.
Jessica McSweeney is a reporter at The Sydney Morning Herald covering urban affairs and state politics.Connect via email.