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Posts Tagged ‘Arthur Somare’

Woodlawn scandal back in the news

December 1, 2014 1 comment

Sydney money managers lose $10 million of PNG taxpayer funds

Rory Callinan | The Age

Arthur Somare, son of the Grand Thief, Michael

Arthur Somare, son of the Grand Thief, Michael, oversaw the placement of K96 million  with Woodlawn Capital

Two Sydney money managers have demanded about $23 million in fees for two years work investing Papua New Guinea taxpayer funds, some of which dropped in value by about $10 million.

And a company they directed also paid hundreds of thousands of dollars in a referral or introduction fee to a former PNG prime minister’s son in connection with getting the deal to invest the funds.

The revelations have emerged from a row over $43 million of PNG government money that was squirrelled away in a small country bank branch in Lismore in northern NSW.

The money is now the subject of a court case in NSW  involving the money managers and Papua New Guinea’s third-party motor vehicle insurer, which owns the money.

It has already sparked controversy in PNG with politicians raising concerns about how the $43 million fund, which belonged to the government-owned entity known as the Motor Vehicle Insurances Limited (MVIL), was  sent out of the country in 2009.

The money was entrusted to private investment management company Woodlawn Capital, which is directed by Timothy James McNamara, 43, and Timothy Patrick Breen, 40.

Woodlawn Capital had an agreement with MVIL to invest the cash for a period of some years.

The company also paid a large referral or introduction fee to sports administrator Malcolm Giheno – the son of former prime minister John Giheno – in relation to the company getting to invest the funds, Fairfax has learnt.

In 2011, the PNG Government sought to terminate the investment agreements and Woodlawn Capital repaid $4.2 million but demanded $23 million, which included termination fees and other charges, despite the total of the fund dropping by about  $10 million in value under the company’s watch, according to evidence given in the court.

The demands prompted MVIL to launch legal action in the NSW Supreme Court against Woodlawn Capital and its directors, rejecting the fees and demanding the return of the money and interest.

Late last month, Justice James Stevenson issued part of his ruling, finding that Woodlawn Capital had acted in breach of the investment management agreement and justifying MVIL’s right to terminate.

Justice Stevenson also found Woodlawn Capital was not entitled to any fees beyond those accrued at the date of termination.

He found the most significant breach had been when Woodlawn Capital invested in particular derivatives in July and August of 2011.

He also found that Woodland Capital had engaged in “deceptive conduct” because it did not have an appropriate financial services management licence when it was managing the money.

He noted that the Australian Securities and Investment Commission had written to Woodlawn Capital in 2009 warning that the company needed an appropriate licence.

But Woodlawn had not obtained the licence, arguing it was acting only as the Australian agent for the investor and that it had been given legal advice to reflect this fact.

The court has also heard critical evidence about the performance of Woodlawn Capital in managing the fund, which dropped in value from about $43 million to about $30 million.

MVIL’s expert witness Robert Risk, a financial assets trader in Australia specialising in derivative trading and financial investment, alleged that in June 2011, Woodlawn’s investment strategy exposed MVIL to “substantial risk”.

Mr Risk alleged it did this by causing the company to have “large negative notional exposure to the falling market, through the purchasing of future contracts, the selling of Index Put Options and equities in predominantlyresource focused companies among other strategies”.

The company officer responsible for taking the positions was McNamara, who told the court he had had unjustifiable confidence in the strength of the Australian economy.

“If I had the benefit of hindsight at the time I would have taken reverse positions and been hailed as a hero,” McNamara said. “In the events which happened my confidence in the strength of the Australian economy and its markets was not justified and I lost my client money.

“That unhappy experience comes with the territory”.

Mr Risk also alleged that Woodlawn’s trading strategy was “not one of competent or careful trader” especially in light of the negative economic news at the time.

“With volatility spiking it was difficult to argue that the Australian market would not become embroiled in an aggressive selloff,” Mr Risk said.

Justice Stevenson agreed with Woodlawn’s submissions that Mr Risk’s propositions were generic and did not express any strategy that would have been adopted to achieve a neutral performance.

He said Mr Risk had agreed that August 8 and 9 were the single-largest loss-making days in the history of world financial and equities markets.

The case also revealed how Woodlawn Capital had co-mingled funds when it withdrew $1.5 million rather than $150,000 from MVIL’s account and transferred the money to its own account in 2010. On another occasion on August 8, 2011, Woodlawn withdrew $32,135,206 from MVIL’s account and paid it into Woodlawn’s account with Suncorp Metway.

On the same day, $5,000,000 of the money was transferred to another MVIL account. The next day another $5,000,000 was transferred to another MVIL account. The balance remained in the Woodlawn account and was not returned until September 15, 2011.

McNamara stated the transfers occurred as a result of banking errors and were promptly corrected by Woodlawn. MVIL has brought claims against Mr McNamara and Mr Breen for “accessorial liability” but Justice Stevenson deferred these until the parties have a chance to consider the reasons in this judgment.

Mr McNamara declined to comment for this article.

Mr Giheno, when contacted last week and asked why he received a referral fee, said it was a matter before the courts and he did not have much to say.

“I am not a director of Woodlawn nor do I have anything to do with MVIL,” he said in an email.

“I have never worked for any government body or even once had formal employment with a public company in PNG.”

He said the only capacity he had acted in was “introducing individuals to potential opportunities in PNG”.

“I am given a fee for the introduction but that is it. I do not negotiate or play an active role in any of this”.

When asked if the fee was about $300,000, he declined to confirm how much he received.

Read more on the Woodlawn Scandal

Govt determined to pursue missing Woodlawn millions

MVIL struggles to recover money lost in Woodlawn scam

Morauta: Woodlawn Capital statement a fabrication

Woodlawn admits handling K96m but denies wrongdoing

The Somare family and the K96m Woodlawn scam

Arthur Somare under investigation for loss of K76m

Is international fugitive Tjandra Joko Soegiarto back in PNG?

May 7, 2012 8 comments

N8989N sitting on the tarmac at Jacksons airport, Port Moresby

A Gulfstream private jet N8989N is currently parked at Port Moresby International Airport. It is alleged this aircraft has brought international fugitive Tjandra Joko Soegiarto back to PNG.

It is alleged Joko is closely associated with a number of PNG politicians and arrived in PNG with large quants of cash. It is further alleged he is trying to negotiate the purchase of 4 million hectares of land.

Is Joku in PNG and if so why is he here?

The allegations

International Indonesian fugutive Joko Chaundra Soegerto wired some Indonesian Government funds offshore from the Reserve Bank of Indonesia for Investment offshore. When the regime changes in Indonesian politics Joko Chaundra Soegerto ran away overseas and hide in Malayasia and then to other countries because the Indonesian Government wanted him to return that Investment funds back to Indonesian people.

In PNG 90 percent of logging companies are owned by the Malayasians in partnerships with PNG politicans who are corrupt and are directors of most of the logging companies, retailing and oil palm industry. Joko Chaundra Soegerto has family members in connection to some of these operations in PNG and in retailing business. Joko Chaundra Soegerto is related through blood family lines and investment in PNG through PAPINDO group of companies and Super Value Stores (SVS) group of company’s diversfying to Real Estate companies and now into rice production through the Minister for Foreign Affairs in Central province. They are now applying for oil and gas industry with mining exploration in Papua New Guinea.

Joko Chaundra Soegerto is the friend of many PNG national government ministers both in the current Oniell/Namah government as well as the faction with the Chief Somare and his son Arthur Somare in the opposition. Meaning most of the parlimentarians go to bed with the Malayasian and some Indonesian Businessman like Joko Chaundra Soegerto with his family members and associates.

All this has happened that has leaded the PNG Government Falcon Jet issue with the Indonesians military jets escorting the governmernt jet to PNG/Indonesian boarder last year. The basic truth is that when the PNG government Jet takes off the International fugutive Joko Chaundra Soegerto’s jet took off at the same time in one of the airport in Indonesia.

Some funds transferred from Malayasian Banks have been off loaded from the International fugutive Joko Chaundra private jet to PNG Government jet in Indonesia where both jets landed for the delivery of cash in suitcases.When the Kumul jets landed at the Jackson air port in PNG most of those suit cases have not been checked by the PNG Customs and Immagration officers.Therefore there are some facts associated in the movement of hard cash by Deputy Prime Minister Belden Namah with his delegation last year to Malayasia.

On Friday April 27, 2012 at 7.45am International Indonesian fugutive Joko Chaundra Soegerto’s Jet all white with green stripes with registeration number N8989N landed in Port Moresby,Jackson International Airport with 3 suitcases may be full of cash and other items.He was met by Prime Minister of Papua New Guinea Hon.Peter Oniell and his Deputy Prime Minister Belden Namah.There  was no Immagration and Customs checks and clearance  because the officers were told by the Immagration Director General not to do any thing.

As of today Tuesday May 2, 2012 the International Indonesian fugutive Joko Chaundra Soegerto’s jet is still parked near the Air Niugini cargo Terminal manned by a Blue 10 Seater Vehicle LBD 337 all tinted.From the very relaible sources International Indonesian fugutive Joko Chaundra Soegerto has been given a PNG Citizenship passport and Joko Chaundra Soegerto has transmitted US$52 Billion from Dubai to Singapore awaiting to be transmitted from Singapore to Papua New Guinea.

This matter has been reported to Australian High Commission office in Port Moresby on April 28, 2012 and nothing has been done to date.Please we need assistance to crub money laundering and corruption in PNG politics and economy.

Govt determined to pursue missing Woodlawn millions

April 18, 2012 6 comments

Statement by  Minister for Public Enterprises Rt Hon Mekere Morauta, KCMG MP

Mr Speaker, when the O’Neill-Namah Government was elected on the floor of Parliament last year, we faced a tremendous task of reconstruction and reform after 10 years of waste, neglect and lost opportunity.

I have spoken previously about the areas where this waste and neglect, and indeed corruption, was most prevalent and caused the most damage – in the State Owned Enterprises supervised by the Independent Public Business Corporation under the stewardship of the suspended Member for Angoram and his outrigger Mr Glen Blake who during that time claimed to be (and probably still is) the Somare family financial adviser.

Since we were elected in August last year, much of the focus of my efforts, as Minister for State Enterprises, has been on finding out how big a mess the State Owned Enterprises are in; and where they have lost money, how that money was lost, where the money went to, and to try to get as much of that lost money back as we can.

Mr Speaker, this is public money we are talking about, which should have been used for the benefit of all Papua New Guineans, building roads and bridges, schools and hospitals, but which instead has been frittered away, wasted, lost through incompetence, or in some cases, simply stolen.

We quickly discovered that one of the worst State Owned Enterprises in this respect was Motor Vehicle Insurances Limited, which we all know as MVIL. Mr Speaker, MVIL has a vital function within government and as the third party motor vehicle insurer, it must maintain large financial reserves in order to pay out insurance claims for years into the future.

This made MVIL a tempting target for highly dubious so-called “investment managers” from overseas to extract a large slice of MVIL’s investment funds, 96 million kina, and place that money at the disposal of these “investment managers”, initially in a bank account in a New South Wales country town. Regrettably, Mr Speaker, the “investment managers”, Woodlawn Capital Pty Ltd, appear to have been ably assisted by the then Managing Director of MVIL, Dr John Mua, in their endeavours to extract money from MVIL.

When this 96 million kina was “invested” with Woodlawn in July 2009, Woodlawn Capital Pty Ltd had been incorporated for only a few weeks; it was a classic “two dollar company” – that is, it has a paid up share capital of only two, one dollar shares; it did not hold any financial services licence which, under Australian law, every such investment manager must have; and it had no other funds under investment.

It would seem ridiculous for any rational businessman to invest any funds, let alone 96 million kina, with such a company with no history, no backing and no licences, but that is what Dr Mua and MVIL did in 2009.

Mr Speaker, this has not been an easy task, but we are not giving up. And unfortunately, in this we have not always been assisted by everyone at MVIL.

We required Woodlawn to repatriate the total funds to PNG and terminate the investment arrangement, but we received nothing but obfuscation, delay and a refusal even to give us the most basic information about how much of the original investment of 96 million kina is left, or where the funds may be held.

We have complained to the corporate regulator in Australia, ASIC, about Woodlawn’s actions in claiming to hold an Australian Financial Services licence when it did not, and dealing with investment monies when unlicensed. These are clear breaches of Australian securities law.

Mr Speaker, we had been most concerned that all or nearly all of the 96 million kina invested with Woodlawn over two years ago may have been lost. A couple of months ago it appeared that Woodlawn was suggesting it would return only a few million dollars, perhaps only 10 or 15 percent of the original investment , to MVIL. It would be a sad day for Papua New Guinea if we were to lose about 80 million kina to crooked investment advisers overseas – money which should be available for the benefit of the people of PNG and improving their living standards. This is the sad legacy of the Somare regime’s years of waste, neglect and corruption.

However, Mr Speaker, there is some light at the end of the tunnel. With the totally un-cooperative approach from Woodlawn, we had no option but to instruct our legal advisers in New South Wales to commence legal proceedings against Woodlawn and its two directors, McNamara and Breen, to recover the money they had illegally obtained.

Following the institution of legal proceedings, I have now been informed that the New South Wales Supreme Court ordered the remaining MVIL investment portfolio frozen, so Woodlawn and its directors cannot deal with those funds, and Woodlawn has been required to give full information about the current value of the MVIL investments managed by Woodlawn.

While this may sound positive, it is not all goods news. Legal action is expensive, and it is possible, or likely, that more legal action will need to be taken before we get our money back. Also, while we do not yet know precisely how much money is left, it seems that it could be somewhat less than 30 million Australian dollars, which would mean a loss of about one quarter of the original investment two and a half years ago, since 96 million kina then equalled about 40 million Australian dollars.

Of course we are not conceding that this money is necessarily lost – we will do everything we can to pursue Woodlawn for the full value of our investment and the damages we have suffered, but we obviously do not know yet how successful we will be.

This MVIL saga is, Mr Speaker, another example of the Somare regime’s scandalous misuse of public funds – not as newsworthy, but just as bad in its own way, as the Falcon jet fiasco. The people of Papua New Guinea deserve better, and we are making sure they get better than that, by making these most strenuous efforts to get back this money which has been extracted from the public purse.

MVIL struggles to recover money lost in Woodlawn scam

April 16, 2012 2 comments

By Todagia Kelola

THE new Board of the Motor Vehicle Insurance Limited (MVIL) has been able to recoup only K9 million out of the K100 million that was [fraudulently] invested in Australia.

Chairman of the Board Bonny Igime in a statement said out of the fraudulent K100 million investment that the MVIL made with Woodlawn Capital Ltd of Lismore, NSW Australia was executed on July 22, 2009, my Board has manage to recoup only K9,187, 260 back into PNG. The money is now with the Gadens Lawyers Trust Account in Port Moresby waiting to be remitted back into MVIL.

“When the Government of Prime Minister Peter O’Neill appointed me as Chairman of MVIL I assured the nation that I will vigorously pursue the K100 million being siphoned off into Australia and bring it back into PNG. The money rightly belongs to the 7 million people of this country, who own MVIL through the government, and the people have the right to know what has happened to their money.”

In late February this year Mr Igime took the Board and management to Australia and met with the executives of Woodlawn Capital Ltd in Brisbane.

“We asked Woodlawn executives where they kept the money and what is the current net asset value (NAV) of the investment. Woodlawn kept evading our questions and came up with an excuse that a substantial amount of MVIL investment was lost during the global financial crisis a few years ago. We didn’t buy into their argument. We suspected that something was seriously wrong with the investment and that we must independently investigate and find out soon. Coincidently, at about the same time the former CEO of MVIL John Mua called me on numerous occasions and begged me not to bring the money back to PNG. He said the money was safe in Australia and that MVIL has a lot of liquid cash sitting in the banks in Port Moresby and does not need the K100 million. That’s when my sensitive nature tells me that something is seriously wrong with the investment and we must investigate.”

The Board engaged Gadens Lawyers in Sydney and Price Waterhouse Coopers (PWC) accounting firm to conduct a thorough investigation into all the accounts of Woodlawn Capital in Australia and ascertain the net asset value of the investment. With our instructions Gadens Lawyers successfully obtained an interlocutory order in the New South Wales Supreme Court thus freezing all the accounts of Woodlawn. The Supreme Court order effectively froze all the accounts of Woodlawn being kept by various financial institutions in Australia.

He said their forensic accountants conducted an audit into the frozen accounts and uncovered AUS$24 million being kept in those accounts, which is equivalent to K50 million. The K50 million plus the K9 million already brought into the country amounted to K59 million. The question is, what happen to the balance of K41 million?

The investigations have uncovered a shocking truth that Woodlawn Capital at the time it received the money from MVIL was not licenced to conduct business as a financial investment company. Woodlawn did not hold a valid Financial Services License (FSL) under the Australian Securities and Investment Commission (ASIC). This is indeed a serious crime under the Australian laws. ASIC is the Australian government watchdog that regulates, monitors and oversees all financial and investment activities in Australia. The K100 million investment was a fraudulent transaction between the executives of MVIL and Woodlawn with the intent to defraud MVIL because Woodlawn was not licensed to receive the money at the time.

The investigations have uncovered another shocking truth that some people were using the K100 million like a petty cash. Numerous unexplained withdrawals were made on the K100 million over the entire period of the investment from July 2009 to as recent as January 2012.

For instance, the following withdrawals were made on MVIL accounts in Australia in 2011 and early 2012.
BANK ACCOUNT NO.   DATE   CURRENCY   WITHDRAWAL AMOUNT
Westpac   467559   5/5/2011 AU$ 1,500,000
Westpac   467559   30/6/2011   AU$ 2,000,000
Westpac   467567   8/7/2011     AU$ 300,000
Westpac   467559   14/7/2011    AU$ 300,000
Westpac   467567   14/7/2011    AU$ 300,000
Westpac   467559   16/8/2011    AU$ 3,000,000
Suncorp   4157414  15/9/2011    PGK 24,872,335
Westpac   467559   21/9/2011    AU$ 1,000,000
Westpac   467559   27/9/2011    AU$ 1,197,540
Westpac   467559   14/11/2011   AU$ 227,000
Westpac   467559   13/1/2012     AU$ 440,142

According to correspondences between the executives of MVIL and Woodlawn we have uncovered that the former CEO of MVIL John Mua was the only authorized representative of MVIL who can authorize or instruct Woodlawn for any transactions to be conducted on the accounts in Australia. And therefore, I am calling on John Mua to come out and tell the Government and the people of PNG about the irregular and unexplained withdrawals made on the K100 million being kept by Woodlawn. Our lawyers and forensic accountants are following the money trail and we will get to the bottom of the missing K41 million and the nation will know about it.

Read more about the Woodlawn scam and the Somare family:

The Somare family and the K96m Woodlawn scam

Arthur Somare under investigation for loss of K76m

Plenty of questions raised by the slaying of Police Commander Charles Parinjo

February 26, 2012 3 comments

Police Station Commander Charles Parinjo has reportedly been murdered at Kaindi in Wewak, East Sepik Province.

Scores of heavily armed Police are in the area and houses have been burnt. The police vehicle PSC Parinjo was driving in, its windows were stoned and the vehicle badly damaged from stones and other objects thrown at it.

It is believed it was Parinjo who stood between Somare Jnr and Wararu when Somare wanted to shoot Wararu a couple of years ago. That incident related to the storm water  drainage project investigation into the Somare family owned company that was supposed to do the works. Parinjo later fled Wewak after trying to arrest Somare.

It is believed Parinjo knew far too much and was moving dangerously close to the inner circle of power.

Parinjo’s death comes just a week after Task Force Sweep was sent into East Sepik.

First reports suggested Parinjo was driving on his way and saw few drunks on the road and stopped his vehicle and came down and tried to remove them from the road. While there a PMV drove by and hit him. From there the drunkeds and everybody rushed to him, and the story was that they have hit him with the bar, sticks and other materials and also dragged him on the tar.

But later stories suggest he was stabbed to death and those who are being suspected of the incident are now in hiding.

Parinjo was one of the faithful hard working Police Officers that we only have few of in our communities… All the good citizens of Wewak will definitely miss his service to the communities.

But questions remain unanswered such as why was the crowd there? There must have been a reason? Is this election related or a Task Sweep related death? His death was or may have been politically motivated?

What about the alleged Police personnel who were reported to have entered through foot patrol to attack him, because he had issued orders to his police officers to support the residents who had provided resistance to the Sweep team ???? Is this just speculation?

Police Chief flees after Somare Jnr arrest

The Family Album

February 2, 2012 4 comments

Who is it that really wants power?

January 31, 2012 4 comments

By The Critic

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