Australian investors, business community and government ignore illegal logging, human rights abuses and corruption in their pursuit of profits
Papua New Guinea’s worst human rights abuser and forest destroyer is being welcomed into the Australian business community with the listing of Kina Securities on the Australian Stock Exchange (see story below).
Kina Securities is wholly owned and controlled by Rimbunan Hijau, the Malaysian logging company with a long history of illegal logging, forest destruction and human rights abuse in PNG.
But none of this seems to worry the Australian business community or the Australian government who simply view Kina Securities as another good opportunity to make a profit out of PNG.
Australia’s actions in welcoming Kina Securities into the heart of its business environment exposes how paper thin are its supposed commitments to good governance, fighting corruption and corporate social responsibility.
Just last year Rimbuan Hijau was exposed in a multi-agency report as employing police officers to brutalize local communities in logging areas.
The 2013 Commission of Inquiry into Special Agriculture Business Leases revealed Rimbunan Hijau’s role at the centre of a huge corrupt and illegal land grab:
With corrupt government officials from implementing agencies riding shotgun for them, opportunistic loggers masquerading as agro-forestry developers are prowling our countryside, scoping opportunities to take advantage of gullible landowners and desperate for cash clan leaders… Our investigations reveal that over 50% of the so-called developers’ currently holding subleases on SABLs are connected in one way or another to Rimbunan Hijau (RH) Limited, which by far is the biggest logging operator in PNG’.
The inquiry concluded more than 90% of the leases investigated were unlawful and should be revoked. But RH has not relinquished any of its stolen ground.
Rimbunan Hijau has a long history of abuse in PNG.
A 2004 report, The Untouchables – Rimbunan Hijau’s world of forest crime and political patronage, exposed RH as one of the world’s largest forest destroyers; its operations characterised by documented illegalities and environmental destruction and protected by an extensive and well-established network of political patronage and media control.
The SBS television company in Australia has also exposed Rimbunan Hijau’s human rights abuses. This is the video testimony of one police officer who was employed by RH:
“We handled those suspects good and proper. We bashed them up, we hit them with huge irons and when we mobilised in there we made sure that these people who complain against rights of their benefit were manhandled, you know. I became violent because of their [Rimbunan Hijau’s] actions, because of their instructions”.
For a more complete dossier of Rimbunan Hijau human rights abuses check out this review.
Rimbunan Hijau is the largest logging company operating in PNG where at least 70% of logging operations are illegal – as revealed in a 2014 report from the prestigious Chatham House group in London. That is a figure confirmed by the World Bank.
Kina Securities to list on ASX and Port Moresby Exchange
Rose Powell | Sydney Morning Herald
Kina Securities will become one of the first dual-listed Papua New Guinea-Australian companies when begins its float on Thursday morning.
The Port Moresby-based company manages a range of financial products and has a market-leading position in the micro-lending space and superannuation. It is the largest licensed funds manager in the country with more than $2.3 billion under management.
However, the stock sparked conversation among Australian investors due to its relatively cheap starting price as well as its dependence on the Papua New Guinean economy and currency.
The 30 year old company is seeking to raise $97 million from its IPO, with shares starting at $1. It has a 7.5 price-to-earnings ratio and its prospectus says it is aiming for an annualised 9.7 per cent dividend yield. It will have a market cap of $164 million.
Despite the risks, the IPO is oversubscribed. One investor, Bill Laister from Contango Asset Management, is optimistic about the company and its unusual exposure to the burgeoning middle class of Australia’s rapidly growing neighbouring economies.
“We participated in the float because we liked the company, its valuation and the share price. It’s very cheap, which compensates for increased risks, and the price and valuation will support the stock going forward,” Mr Laister said.
Australian investors can gain exposure to Papua New Guinea through two of Australia largest banks, Westpac and ANZ, but Mr Laister said Kina’s potential lay in its access to wider range of financial products and profits.
“This is the first listed opportunity to get exposure to banks involved at the micro-lending level, which we think has real potential,” Mr Laister said.
The majority of Kina Securities’s operating revenue comes from lending operations. Another quarter comes from foreign exchange and remittance activities and another quarter from deposits and funding.
A significant proportion of the funds raised from the IPO, just under $77 million, will go towards the acquisition of another Papua New Guinea financial company the Maybank Group and covering the costs of listing.
Another $22 million will go to the company’s largest shareholder, Hong Kong based investment company Fu Shan, in a partial sell-down.
Kina Securities, which is chaired by former Papua New Guinea prime minister Sir Rabbie Namaliu, will appoint former Suncorp chief executive David Foster to its board.
The float is underwritten by Morgan Corporate. It will list on both the ASX and the Port Moresby exchange on Thursday morning.