The Papua New Guinea government is trying to recover K96m which it says are the proceeds of a fraudulent share transfer facilitated by former Public Enterprise Minister, Arthur Somare, and the Independent Public Business Corporation.
The funds, according to the new Minister, Mekere Morauta, are sitting in a Commonwealth bank account in Lismore Australia that is owned by an Australian company, Woodlawn Capital Ltd.
Woodllawn Capital was first registered in 2009. The company is jointly owned by Timothy Breen, 37, who lives in Fredericks Lane, Tintenbar in northern New South Wales, and Seahound Holdings Ltd, a company registered in Victoria, Australia. Breen and Seahound each own 25,000 shares in Woodlawn which were issued in October this year.
The two directors of Woodlawn are Timothy McNamara, aged 40 who lives in Tower Street, Manly, and Timothy Breen. McNamara is also the company Secretary.
The company has a registered address at the offices of Wappetts accountants at 158 Molesworth Street Lismore, but lists its place of business as Level 40, Governor Philip Tower in Sydney.
The landmark Governor Phillip tower is perhaps the most prestigious office complex in the heart of Sydney. Real estate agents describe it as offering “superior finishes, services and facilities befitting the needs of its leading national and international tenants”. The towers soar to a height of 243m and offers “magnificent views over the Royal Botanic Gardens to Sydney Harbour”. Rents start at around $1,000 per square meter. Woodlawn Capital moved to its current address from Bond Street in 2010.
The K96 million which is alleged to be sitting in the bank account owned by Woodlawn Capital is missing from the state owned Motor Vehicle Insurance Limited. The money is the proceeds of the sale of shares in Bank South Pacific which were owned by MVIL and sold to Nominees Niugini Limited. The transaction is the subject of a police investigation as it was in breach of Section 45B of the IPBC Act and Section 110 of the Companies Act in that it was not approved by the IPBC board and there was no shareholders’ resolution approving the sale, as was required under law.
The new IPBC board has instructed MVIL to rescind the sale contract, called an Equity Monetisation Contract Agreement and IPBC has also begun legal proceedings against MVIL and Nominees Niugini.
We wait to hear who placed the K96 million with Woodlawn Capital or on whose behalf the company is holding the money.
It is not known whether either Woodlawn Capital or the Commonwealth Bank did any due diligence on where the money was coming from and whether it was the proceeds of crime.
It is also not known how or why the K96 million did not attract the attention of the Australian anti-money laundering agency (AUSTRAC).
The Commonwealth bank could be vulnerable to a civil law suits if it can be shown they have handled stolen wealth, and administrative measures and even criminal prosecution if they have failed to practice proper due diligence on anti-money laundering grounds. Although in practice Australian banks are relaxed about accepting probable corruption proceeds from PNG, because they have figured out the Australian government doesn’t care too much about this issue.