Home > Corruption, mining, Papua New Guinea > Mr Daveona and Pariu – Where has the Panguna Landowners’ Trust Money Gone?

Mr Daveona and Pariu – Where has the Panguna Landowners’ Trust Money Gone?

February 3, 2014 Leave a comment Go to comments

Missing annual returns, over K400,000 in assets unaccounted for and a general lack of financial accountability raise serious questions about the management of landowner funds…

Francis Ona and Perpetua Serero, like many in the mine community, thought something was amiss with the Panguna Landowners Association in 1987. PLA’s self-appointed leadership had lost touch with the everyday struggle of villagers, and were climbing the corporate ladder using their position at the PLA as leverage.

Young, dynamic and articulate, Serero and Ona challenged the PLA executive to an election, on an anti-mining and community development platform. They won in a landslide.

During 1988 the new PLA leaders turned their eyes to deep problems within the Road Mining Tailings Leases Trust Fund, an organisation that had been set up to administer a range of mine compensation payments.

With the Trust administered by the ousted PLA executive there were widespread concerns that its funds were being used for the benefit of the Trust’s Directors who were said to be receiving relatively ‘lavish Director’s fees’, in a report issued by Applied Geology Associates. Serero and Ona, as PLA Chairperson and Secretary respectively, attempted to assume control of the Trust and implement a thorough audit of its accounts. This was resisted by the Trust’s Directors, who successfully blocked Ona and Serero in the courts.

As a result, to this day the Trust fund, and its substantial asset base, is administered by its Directors Michael Pariu (who is the Trust’s Chairman), Lawrence Daveona (who is also  the Trust Secretary), Severinus Ampaoi, and Peter Perakai (Pariu, Daveona and Perakai were all part of the PLA executive ousted in 1987). The Trust shares are held by Lawrence Daveona, Michal Pariu, Wendelinus Bitanuma, Steven Tampura, and Michael Totobu [Entity_Extract-Road_Mining_Tailings_Leases_Trustee Ltd].

It is in this context that there are serious concerns over how the latter parties have been managing the Trust funds, which are meant to benefit the entire mine affected community.

In the Trust’s 2001 annual return [Annual Return 2001] its assets are valued at K1,511,163, with no liabilities outstanding. Were this sizable sum invested in even a low yielding security, we would expect to see a modest increase over the last decade. Yet in their 2010 Annual Return – worryingly, none have been submitted for 2011-13 – the Trust’s finances have dropped half a million kina to K1,095,901 [Annual Return 2010].

So where exactly did the K415,262 go?

Unfortunately we do not know the financial position of the Trust prior to 2001. But according to its own Director, Secretary and Shareholder, Lawrence Daveona, it had become by 1990 a ‘multimillion kina company’ with stakes in the Investment Corporation of PNG, Anglo Holdings Limited, Niugini-Lloyds Bank, the Bougainville Development Corporation, numerous plantations and various investment properties. Some of these assets may have been damaged during the conflict, but like BCL whose insurer compensated the company for losses in assets, the Trust presumably insured these investments and was compensated.

However, a lack of published records means we have no way of telling how these numerous investments were handled by the Trust during the 1990s, when most Bougainvilleans were busy dodging bullets and bombs, or whether losses in funds have been accounted for. Complicating matters, the trust’s financial administration has not been subjected to the scrutiny of an external auditor for over a decade (only companies with K5 million + assets must be audited under the Companies Act 1997).

Unfortunately, this is not the first time Lawrence Daveona and Michael Pariu have appeared on this blog. In 2013 we published leaked documents showing that Daveona had received thousands in cash payments between 2009-2011 from BCL’s shareholder’s association. This revelation came following Daveona reported sacking as Acting Deputy Clerk of PNG’s Parliament. According to the Post Courier he illicitly supplied, ‘alcohol, vehicles and other resources … [to] Fraud Squad officers to carry out investigations against certain senior officers of the Parliamentary services’.

We also published photos of Michael Pariu, Lawrence Daveona and Severinus Ampaoi, socialising with the controversial BCL shareholder, Axel Sturm, in an exclusive Port Moresby hotel – Sturm recently claimed Bougainvilleans live in the ‘stone age’, and has promised to turn Bougainville into the new ‘United Arab Emirates’.

Image: Daveona and Pariu with Axel Sturm.

Image: Daveona and Pariu with Axel Sturm.

We also know from historical accounts that BCL fought tooth and nail, to have Daveona and Pariu restored as leaders of the PLA during 1988 – indeed internal BCL records  suggest the company even told the government to have the new leadership arrested, so the old unelected executive could be returned.

We wonder why?

Ona and Serero warned when ‘Chiefs’ work for money rather than the people, foreign corporations can make them dance to whatever tune they choose.

Fast forward to 2014, and the Prime Minister’s historic visit to Bougainville. We now have Lawrence Daveona, accompanied by Michael Pariu, telling the Post-Courier that ‘the Landowners of Panguna mine and the surrounding leases were united for the re-opening of the mine’.

Following their resounding defeat at the hands of Ona and Serero in 1987, both Pariu and Daveona have repositioned themselves as leaders of the pro-mining landowner faction.

But before these two men start eyeing the new prize, it is time for them to publicly explain what has happened to the landowning community’s ‘multimillion’ investment administered through the Trust since 1989.

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  1. Oscar
    February 3, 2014 at 8:15 pm

    Hang on, Mathew Kove is STILL listed as a Director/Shareholder. He died 24 years ago. I wonder if someone has been collecting Director’s fees, etc, on his ‘behalf’?????

  2. pkay
    February 5, 2014 at 11:16 am

    This article is another return down the same old beaten landowners track. It is a track down the valleys and ravines and up the ridges of Panguna those named have walked or have been made to walk on foot before.

    Does raising it in this blog now implicate these individuals any more than they might have been in the past? Does it reveal anything new this time? Does it make Lawrence any more guilty or culpable than he has been in the past when these same allegations were raised?

    Silence neither means admission or denial. But somewhere, either in Guava or Port Moresby or in the annals of a Chartered Accounting Firm used by RMTL might lie the truth about the investment. PNGExposed might want to do more research so that it can post a much fuller, rounder and fairer story in its blog.

    Do we expect Lawrence or Pariu or Ampaoi to respond every time their names are flashed in this blog? I don’t think so. Not after they are harangued here, there, everywhere and at home. The best counsel one can give or have is not to say anything when you are caught up in a trial by MEDIA. May be Lawrence has incriminated himself by saying too much in the past. May be it is a lesson he has re-learnt since he has returned home.

  3. Ruth
    February 5, 2014 at 10:55 pm

    I hope Lawrence still has his security detail on call still, he and his faithfuls might be needing it. Most at Panguna know that some of the old-timers have their pockets open, and are asking Rio Tinto to fill them. They are arrogant and think they can out-smart Rio Tinto. Intelligence is not important in this world, money, power and influence is everything. So how are a few greedy despots going to bring a world mining giant to its knees?

    Your right Pkay, Lawrence will be wary, last time he responded he ended up admitting criminal activities – and when people in the village got wind of it, they knew where his interests were.

  4. Dr Patrick Onguglo
    March 8, 2014 at 3:08 pm

    PETER O’STEAL STRIKES AGAIN! – USD$1.2 BILLION CORRUPT LOAN.

    The Prime Minister Peter O’Neill (‘aka O’Steal) has personally and unilaterally directed that the State of PNG borrow US$1.2 Billion Dollars through international financiers syndicated by the Swiss UBS Bank, to buy 10% of Oil Search Limited (OSL) shares. It is believed this transaction is motivated by personal gain. Therefore, this loan is believed to be for a corrupt outcome. This corruption is perpetrated by UBS and other international banks lending the money.

    PNG does not need the loan. It is Peter ONeill who needs the loan for his own corrupt gain. He is using the country’s assets to obtain a personal benefit. This must be made very clear to the international lenders. On this basis no future PNG Government will be liable to repay the funds, lent for an illegal purpose.

    As of this article the international lenders will be deemed to be aware of the allegations I make here.( I invite the Prime Minister to contradict me if he can).

    This is not an ordinary share purchase (investment) made by the Prime Minister on behalf of the people of PNG. What I am about to reveal is only known to a few key people in government circles.

    In 2013 Total, the French Petroleum conglomerate entered into a deal with InterOil Limited wherein it purchased 60% stock in InterOil with the intention to develop the Gulf/Elk-Antelope LNG Project. Total bench marked the price of the InterOil shares against the known oil and gas reserves of InterOil’s Gulf/Elk LNG reserves, and international price indicators.

    Interoil was started by two men in this country, Phil Mulacek and Gayland Baker in early 1990s. These two men, one a Texan and the other from California walked into Port Moresby government offices with empty brief cases promising to build an Oil Refinery in PNG out of one abandoned by Chevron in Alaska. While Curtain Brothers offered the Motukea refinery, these two men with very slick marketing skills, and Gayland Baker’s position as a director of conservative Fuller Christian Seminary, gained the upper hand.

    The rest is history, of the way they manipulated government decision making processes, public announcements, to gain every benefit, favour, approval, license and a free lift up in every other step of that company’s development.

    Interoil today is testimony to how Phil Mulacek has carefully and deliberately manipulated the goodness of the people of PNG and their government, how he has ruthlessly and unscrupulously exploited the weaknesses of key leaders of PNG, to build a personal fortune worth several hundred Million Dollars for himself and his extended family. Mulacek has been ably assisted by Christian Vincent, the Frenchman, his brother-in-law who acts as Phil’s main go-to man who has also gained in the hundreds of Millions.

    In a small town things can get a bit incestuous, as Christian Vincent’s long term girlfriend in PNG happens to be the Fijian-Indian Lady with the short skirt who is the CEO for Peter O’Neill insurance company. Peter O’Neill is no stranger to Vincent and Mulacek having had many private dinners and meetings over the years when Mr O’Neill was a Minister in the Somare Cabinet.

    Having sold 60% of InterOil to the French Company for several hundred Million dollars, Mulacek and co have been holding out the balance of the shares of 40% for a price that is almost triple what the French have paid for per share previously. The French having pre-emptive rights could not pay the price that the Mulacek camp has been asking for the balance of the shares. Meanwhile the Gulf-Elk LNG Project is not going anywhere fast.

    The Mulacek camp have been trying to play Total against Exxon and Oil Search Ltd, who both also expressed interest in a piece of the action. Mulacek had hoped Total would pay the price to own the whole lot or Exxon would pay a premium to participate. No one took the bait. Over the years people have become tired and weary of Mulacek and his antics, always trying to profiteer and gain unreasonably, when he came to PNG with nothing. The InterOil project could have been fully financial 5 years ago had Mulacek not been greedy and held out.

    This game has developed into a stalemate with Total holding majority stock and cant fund the project until it took the rest of the stock. It required a game breaker.

    This is where the creative genius of Phil Mulacek came to the fore once again, and perhaps for the last time against the people of PNG. He approached Peter O’Neill through the lady with the short skirt for a private meeting. In that meeting it was laid out to ONeill that someone should assist Oil Search Limited (who has expressed interest ) to buy the balance of the 40% shares in Interoil for the exorbitant price that even Total would not pay. That Oil Search Limited had already been sounded out on this, and provided someone funded OilSearch Limited for the price of the Interoil Shares they would do the deal to further fortify them against any corporate raid. The State of PNG taking the shares would surely be a poison pill for the Dubai based Arabs seeking to do a raid on OilSearch Limited. The aggregate agreed price for 40% InterOil shares and OilSearch 10% shares was in the vicinity of USD1.0 Billion with enough fat to go around.

    What was put to O’Neill in that meeting was that if he could get the Government of PNG to borrow USD$1.2 Billion from international commercial lenders, and buy 10% of Oilsearch Limited shares, Oilsearch Limited would use the proceeds definitely to buy the 40% shares from Interoil at its ridiculous asking price, AND THERE WOULD BE A VERY TIDY KICK BACK OF USD$100 MILLION FROM MULACEK & CO TO ONEILL for making this happen.

    This was the game breaker. ONeill became the game breaker. He became Peter O’Steal.

    Having shook hands on the deal in last quarter of 2013, Phil Mulacek has been working feverishly with Peter Botten of Oil Search Limited, to get international lenders to lend to the State this huge sum of money, while Peter ONeill has been carefully moving the right people into right places to take the decisions for him, and to cover his arse in the State agencies. The last act was to move the Minister for Petroleum William Duma aside and put his own man Duban in place to approve the deal. ONeill knew Duma would see through the deal as unfair, unreasonable and corrupt and not approve it.

    This week Peter ONeill has had lawyers and Financiers and bankers camping all over town feverishly working to finalize the deal. The only Minister working closely with ONeill to close the deal is Ben Micah, who will support ONeill because he needs ONeill to turn a blind eye to his own stealing.

    Most of the Members of Parliament in the Government side do not know about this very juicy and lucrative deal that is going down just this week.

    In fact most of the Cabinet Ministers do not even know. The Opposition does not have the manpower or the resources to keep up with Peter O’Steall’s very active life of carrying on private business deals while pretending to be Prime Minister of Papua New Guinea. Only a few people close to him only know some of the deals, but not all.

    This Prime Minister has made more money using his position as Prime Minister of this country than any other leader in the history of this country, and that folks, is the understatement of the Century. Nothing over K10 Million passes the Tenders Board, for example, without the Prime Minister getting a look in first. His fingers are so sticky that it is now common knowledge among all his Coalition Party colleagues that this man is not good for PNG.

    Papua New Guineans need to ask, and ascertain very clearly that:

    1. The State does not need the 10% of OilSearch Limited Shares. Oilsearch Limited is a public company. It can bloody well raise its own money and buy the shares. When Peter Botten was first approached to buy the Interoil shares he baulked at the sale price as he knew what Total paid. Interoil was asking far too much. When he was again approached with State Offer, he realized it would be a poison pill to have the State to hold substantial shares in OilSearch, so he happily agreed. Oilsearch quickly overpriced its batch of 10% shares and was also gaining from the sale of the shares to the State. Everybody gains from the State.

    2. The Deal and the Loan is not in the best commercial or financial interests of PNG and its economy. The Country has already pledged its assets, including the previous Oilsearch Shares (18%), to the Dubai based financiers of our LNG interests. Why borrow more to get into debt with Swiss Banks this time and park the interest encumbered (shares) in the same commercial entity (Oilsearch) that the Dubai lenders already have priority in call over? Putting all our LNG eggs (revenue stream) in one basket is not a wise move.

    3. Why didn’t Peter ONeill opt to use the money to allow the State to exercise its option to acquire 22.5% of the Gulf Elk LNG Project?

    4. Why is Peter ONeill helping to protect OilSearch which is a public company- unless there is a catch?

    5. Has Peter ONeill relied on a fair and commercial valuation of the shares of Oil Search Limited to justify the price, despite the prevailing share price? Where is the professional valuation?

    6. Why is Peter ONeill borrowing USD1.2 Billion to fund shares when the money can be best spent on health and education and infrastructure?

    7. How can the PNG economy which is already burdened by debt and currently underpinned by 2 consecutive years of massive budget deficits afford to shoulder this huge debt burden? Why has Peter ONeill further mortgaged our future?

    8. Why has Peter ONeill further exposed the PNG economy to the LNG Project. All the hopes of the politicians are on the LNG Project. This is a huge and monumental gamble; particularly because the State has failed to honour its agreements with the Landowners, and the State ( Arthur Somare) has failed to explain what happened to the 3% of the State’s 22.5% in the PNG LNG Project. What happened to the 3%? Mr ONeill was Finance Minister. He knows what happened to the 3% in the Dubai deal. Perhaps he can explain? The Landowners will not allow leaders to trick and mislead them anymore. They are wiser by the day.

    9. Why didn’t Peter ONeill allow the USD1.2 Billion to be borrowed by Kumul Holdings or National Petroleum Company or even the IPBC, for it to buy outright the shares of Interoil? Why gift Oil Search Limited this money at the expense of the people of PNG? Why does OilSearch have to own the InterOil Shares (thereby the Gulf-ELK LNG Project) when the State could easily acquire it and own it- and not for that price!

    10. What is the underlying rationale and underlying value in the exorbitant price (of the loan) of the InterOil Shares? Who has done independent industry benchmarked valuations based on which Peter ONeill has agreed with Mulacek to do this deal?

    11. What is the nature of the Mulacek-ONeill kickback and how was it designed to be delivered?

    12. Is it true this major investment decision worth approximately K4 Billion was made by one man, Peter ONeill, without Cabinet or Parliamentary approval or debate? If so then it is clearly an abuse of the office of the PM, and he should be referred to the Ombudsman for investigation.

    There are many things absolutely and seriously wrong with this investment decision. The Prime Minister has no power to unilaterally commit this country like he has done with Manus Asylum seekers etc. It has become abuse of power. He has become dictatorial.

    ONeill is currently getting government agencies and Departments to approve this transaction for which even the Finance & Treasury officials and the Bank of PNG have not done any formal prior appraisal of this loan. He is trying to rail road the proper government agencies to approve this transaction, when they haven’t even done any proper evaluation of this loan against the country’s other commitments and debt levels.

    I call on Ministers of Cabinet, Government Coalition Partners and Leaders to demand full briefing on this transaction, and all documentation on this transaction be tabled in Cabinet and Parliament for public scrutiny. I call on the Cabinet Ministers and coalition partners to block this stupid loan.

    I call on Senior Ministers to feel sorry for this country and its people, to take their oaths to serve the people seriously. I call on responsible Ministers to stand firm and not endorse this deal even it means their sacking. It is time for principled leaders to stand up to this PM and his greed.

    Already the PM has set it all up so that he does not sign any documents himself. He is using quiet pressure through other people including, once again Ministers Marabe, Polye, Micah and Duban to sign and endorse this deal that Parliament and Cabinet did not approve. Even if Cabinet approved it, it seems they would have been mis-informed. When the shit hits the fan, the PM will naturally go after these Ministers and once again, blame them, as he did with the Paraka deal.

    This is a stupid deal, designed to benefit a few greedy and selfish people. IT MUST BE STOPPED!

    The Prime Minister needs to declare his interest in this matter publicly and resign. He has taken far too much from this country and the small people. He has to learn that enough is enough!

    By Dr Patrick Onguglo

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