Home > Corruption, Land, Papua New Guinea > Paga Hill Development Company CEO Gudmundur Fridriksson implicated in Finance Dept Scandal

Paga Hill Development Company CEO Gudmundur Fridriksson implicated in Finance Dept Scandal

November 3, 2014 Leave a comment Go to comments

Fridriksson company, CSS Anvil, paid K1.4 million for advising on a fraudulent claim for damages exposed by the Finance Department Commission of Inquiry

In 1997 Lynette Malu claimed K1,094,762.99 from the state, for damages supposedly caused during a police raid. Her husband, Benny Malu, was also a party to the action. They, however, allegedly increased the claim to K4.5 million during 2002, on the advice of consultancy firm CCS Anvil, owned by Paga Hill Development Company CEO, Gudmundur (Gummi) Fridriksson. This conspiracy fell within the terms of reference of the Commission of Inquiry into the Department of Finance.

It all began on 22 September 1990. The Commission of Inquiry into the Department of Finance reports, ‘it is alleged that a faction of Mendi Police Force conducted raids in and around Wabi Sumi and Apote villages at the outskirts of the Kagua Erave Electorate of Southern Highlands Province. The raid was conducted in an attempt to apprehend suspects involved in alleged theft of 100 bags of dried coffee. The consequence of the Police action resulted in a number of plaintiffs allegedly having suffered damages, loss of properties and suffered personal injuries’ (p.268).

There were three separate claims against the state based off this raid. One was led by Yakoa Pape. The second by Benny Baleopa Malu, an individual claim. And the final case was launched by Benny’s wife Lynette Malu.

Then on 17 February 1997 JB Nanei & Co. Lawyers wrote to the Solicitor General proposing to settle the case for K1, 094,762.99 inclusive of interest and costs.

Attached to this case was Benny Malu who had already been awarded damages for K35,008.00 for the same event in 1995. He was double dipping.

In 1998 David Keta Lawyers warned the Solicitor General of the anomalies in the writ submitted by Lynette Malu, noting it was a duplicate of her husband’s original claim. The Commission of Inquiry agreed this was a duplicate claim.

Nevertheless, on 27 November 2002 a ‘Deed of Release was allegedly signed [by the state] in which a consideration of K4.5 million was offered for settlement, which is purportedly inclusive of interests and costs’ (p.271). The Deed of Release was signed by Lynette Malu, and Zacchary Gelu the Solicitor General.

The Commission of Inquiry notes on p.272, that the consideration offered in the signed Deed of Release was ‘K3.4 million more than the initial Quantified Claim of K1,094,762.99 being proposed by the claimants first lawyer, JB Nanei & Co. Lawyers’.

The Commission of Inquiry observes that the claimants’ revised Quantified Claim appears to have been influenced by the claimants’ new lawyers, Nouairi Lawyers & Associates. Benny Malu maintains that the company CCS Anvil oversaw this revised claimed, and the actions of Nouairi Lawyers. CCS Anvil was then owned and run by Gudmundur Fridriksson, along with Sydney businessman George Hallit.

Malu claims that his wife had initially claimed K900,000 – CCS Anvil assisted them to revise this amount upwards to the grand total of K4.5 million.

On 15 April 2003 the Attorney General, Francis Damen, wrote to the Secretary for the Department of Finance advising them to stop payment, given the serious anomalies.

Strangely, just a month later on 20 May 2003 Mr Damen again wrote to the Secretary rescinding his previous letter, and advised settlement. In the end K3,880,000 was paid out to Lynette Malu.

Benny Malu alleges on oath his wife’s claim was overseen by Jack Nouairi in concert with CCS Anvil. Nouairi failed to give evidence to the Commission of Inquiry because ‘he was not feeling well’ (p.275).

According to Benny Malu CCS Anvil was paid K1.4, but had claimed K1.85 million for services rendered.

The Commission of Inquiry concluded the ‘matter appears to be a fraud’, and should therefore ‘be referred to Police for further investigations’ (p.276).

Download the full Commission of Inquiry Report


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