Home > Corruption, Human rights, Papua New Guinea > Garnaut chooses strange bedfellows on PNGSDP board

Garnaut chooses strange bedfellows on PNGSDP board

October 11, 2012 Leave a comment Go to comments

Prominent Australian Prof Ross Garnaut, already under fire for his extensive links to the environmentally destructive mining industry in Papua New Guinea – link – has chosen to bring “evasive and dishonest” businessman, Rex Paki onto the board of the PNG Sustainable Development Program. Garnaut is the Chairman of PNGSDP.

Over the past 20 years Paki has appeared before two Commission of Inquiries (Finance Department and National Provident Fund), two Public Account Committee Inquiries, and a Supreme Court case where he was slammed by the full court.

Paki was intimately involved in the Paga Hill development in Port Moresby between 1997-2000, a development which has recently been making headlines for forced evictions and corrupt property deals – link.

In January 2004 the Public Acounts Committee reprimanded Paki’s company Ram Business Consultants (RAM) for issuing an “empty cheque” to the Accountants Registration Board, and then “practicing without … formal registration”.

Two years later in a separate investigation – which Paki attempted to block – the PAC found that over an 18 month period (1998-2000) the Public Curator’s Office had paid RAM K1,561,062 (approx US$640,000), without the existence of a contract, proper invoices, or evidence that any work had been done.

Two Commission of Inquiries (COI) also found reason to censure RAM. Following its first appearance, RAM was accused by the COI of receiving “improper benefits” and charging clients “excessive” fees; in the firm’s second appearance, the COI found that RAM had substantially inflated a cash-flow projection, so a prominent client could amplify his damages claim against the state.

In light of these PAC/COI findings, it is perhaps not surprising that most recently in an appearance before the Supreme Court, Salika DCJ, Gabi J and Hartshorn J, described Rax Paki as “evasive and dishonest”, following Paki’s extraordinary efforts to frustrate the process of discovery (Paki was being sued for allegedly overpaying himself as liquidator of Motor Vehicle Insurance Ltd).

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  1. Anon
    October 11, 2012 at 4:03 pm

    Treasurer Don Polye nominated Rex Paki to the board of PNGSDP, not Ross Garnaut.

  2. Anthony
    October 11, 2012 at 5:53 pm

    This article should be directed at Treasurer Don Polye, not Prof Ross Garnaut.

    The Treasurer appointed Rex Paki last year. PNGSDP’s 2011 Annual Report, which is available on the PNGSDP website, confirms that Rex Paki is a Non-Executive Director of PNGSDP and was ‘appointed by the Minister for Treasury’ and this was done ‘in accordance with the Articles’.

    The Articles of Association make its clear that this appointment is done by written notice. Article 24d says ‘the Minister responsible for Treasury matters of Papua New Guinea may appoint (1) Director, who is not a public official, a member of ministerial personal staff, or an executive member of a political party, by written notice to the Company.’

    Based on the Articles, it is clearly the responsibility of the Treasurer, as the person appointing Rex Paki, to assess the suitability of Mr Paki for this important position.

    If PNGExposed has concerns, then you should take them up with Treasurer Don Polye.

  3. Kris
    October 16, 2012 at 6:52 pm

    The treasurer may hold Mr Paki in high esteem, the Supreme Court do not. Here is an extract from a 2010 decision involving Paki, he was accused of overpaying himself as liquidator, and in order to determine the veracity of this claim the court needed to see the invoices … Paki was not keen on this idea: “It is clear to us that the appellant [Paki] was attempting to avoid giving discovery; the refusal was repeated, chronic and designed to conceal the true state of affairs. He was evasive and dishonest. He gave different reasons for not producing the invoices. He said copies of the invoices were available for inspection at Namaliu & David Lawyers, that the originals were in archives at Korobosea, that the copies on his computer have been lost because the computer crashed, that copies have been misplaced and he needed time to locate them, that copies were available at MVIL or at the offices of Mr. Kerenga Kua, a lawyer. He did not give discovery despite agreeing to Consent Orders of the National Court requiring him to produce the invoices for the entire period of the liquidation. Two (2) years after he verified a list of documents, the appellant was still looking for copies of the invoices. In fact, he never gave discovery. He was required by law to retain the accounts and records of the liquidation for seven (7) years (section 306 (1)(b) of the Companies Act). We agree with Mr. Brookes that the actions of the appellant have caused the respondent an enormous amount of wasted time, effort and money. We are of the view that the conduct of the appellant was improper, unreasonable and blameworthy”. http://www.paclii.org//cgi-bin/disp.pl/pg/cases/PGSC/2010/2.html?query=Rex%20Paki

    The Commission of Inquiry into the Finance Dept, Paki was found to be inflating costs for am action launched against the state by a Mr Andrew Mald, a stablemate of Mr Don Poyle. Here is what the COI said about Paki and his company Ram: “The cash-flow projection prepared by Ram Business Consultants projected a net profit after tax of K1.12 million in year one. There are no I compelling factors to believe that such a projection was realistic as many relevant costs were not factored into this projection…The Net Present Value (NPV) calculated using 12% with 10 years’ income was K5,901,189. This figure is completely inaccurate when compared to our calculation based on the same assumption Ram Business Consultants used. According to our calculation, the NPV is Kl,241.539. Ram Business Consultants deliberately inflated the NPV by K4,659,650 for reasons known only to themselves…From the review of the cash flow projection prepared by Ram Business Consultants we conclude that the Cash-flow projection was specifically engineered in a way to inflate the yearly income projection including NPV so that damages claim would be high. The Ram Consultants Report was based on mere trading assumptions supplied by Andrew Mald, not on proper business records and tax returns”.

  4. October 16, 2012 at 8:29 pm

    Prof. Ross Garnaut, allegation of Rex Paki is very extrovert and extremly dangerous. The good Professor should bring this issue to the right chanel for further discussions. How he used some of the terms are very personal in nature, and from an ordinary person’s perspective, he is attacking Mr. Paki for some hidden reasons. The clear sign of his attack is basically defending his position as the Chairperson in the PNGSDP. Professor’s research on fact finding is very excellent! Would you please publish some more of your research on such corrupt issues in the media? There are thousands, especially senior officers and MPs who are 3 to 4 times brilliant than the person you named. All in all, it is an attack to retain in the chair.

  5. Pama I. Anio
    October 23, 2012 at 9:57 am

    This is in response to the derogatory and malicious remarks that appeared in PNG Blogs on 16 October 2012 under the title, “Crook businessman in PNGSDP Board”.

    The author of that article has abused the privileges of Facebook by falsely accusing PNGSDP chairman Prof Ross Garnaut of appointing prominent PNG accountant and businessman Rex Paki to the board. Much of the article is lifted from a recent report on the “Demolition of Paga Hill” by a UK-based non-government organisation and is merely a character assassination of Mr Paki on Issues that are considered water under the bridge.

    The key facts of these matters are:

    1. Rex Paki was appointed to the PNGSDP Board by the Minister for Treasury as the State’s representative. He was not appointed by Prof Garnaut who nonethless values Mr Paki’s contributions as a board member and will defend his appointment. CEO David Sode also holds Mr Paki in high regard.

    2. Rex Paki has apppeared before only the NPF Commission of Inquiry and not the Finance Department COI as alleged. He was never directly involved in the NPF controversy and was only taken to task about an airline ticket that was purchased by former NPF chairman Jimmy Maladina for him to attend a meeting in Brisbane, Australia, on an entirely different matter. Mr Paki was charged with perjury over the airline ticket issue, a charge that was misconstrued to give the impression that he fully benefitted from the NPF corruption funds. He only used the airline ticket without knowing that it had been purchased with NPF funds.

    3. Rex Paki was never “intimately involved” in the Paga Hill development as alleged. He is not a director or shareholder and his only involvement was providing professional accounting services to the project developer for which he was duly paid. The project developer has legally obtained a 99-year lease and as part of its efforts to appease the Paga Hill settlers and local leaders, the company has signed an agreement to relocate the settlers to blocks of land at Six Mile, NCD.

    4. Rex Paki was not “evasive and dishonest” about his role as liquidator of the Motor Vehicle Insurance Ltd (MVIL). He did not overpay himselft as alleged because his fee was initially agreed to by his lawyer, Kerenga Kua and lawyers for MVIL, which later decided to take court action to recover the money. Due to the misconceptions surrounding the case, Mr Paki decided to settle it out of court by repaying the money.

    The above issues have been fully resolved and Rex Paki’s critics are merely flogging dead horses.

    KUSAI MAHN

  1. October 4, 2013 at 10:58 am
  2. October 5, 2013 at 6:04 am
  3. May 4, 2016 at 8:03 am

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