National Provident Fund Final Report [Part 59]
Below is the fifty-ninth part of the serialized edited version of the National Provident Fund Commission of Inquiry Final Report that first appeared in the Post Courier newspaper in 2002/3.
NPF Final Report
This is the 59th extract from the National Provident Fund (now known as NASFUND) Commission of Inquiry report. The inquiry was conducted by retired justice Tos Barnett and investigated widespread misuse of member funds. The report recommended action be taken against several high-profile leaders, including former NPF chairman Jimmy Maladina. The report was tabled in Parliament on November 20 by Prime Minister Sir Michael Somare.
Executive Summary Schedule 6 Continued
At paragraph 126.96.36.199, the commission has found that:
(a) The K3752 part of the funds transferred from Carter Newell trust account to Carter Newell No.2 account was transferred in reimbursement of the payment made by Carter Newell No.2 account cheque # 788532 and that such payment as so paid was sourced from the NPF Tower fraud; and
(b) The residual K3248.64 so transferred and paid out appears to have been sourced from other funds.
At paragraph 188.8.131.52, the commission has found that:
The payments of K140,000 and K250,000 as so paid, were sourced from the NPF Tower fraud.
At paragraph 184.108.40.206, the commission has found that:
(a) THE K40,000 part of the funds so transferred from Carter Newell trust account to Carter Newell No.2 account was transferred in reimbursement of the payment made by Carter Newell No.2 account cheque # 788548 and that such payment as so paid was sourced from the NPF Tower fraud; and
(b) THE residual K638.05 so transferred and paid out appears to have been sourced from other funds.
Looking as a whole at the disposal of the fraud moneys which had been received into Carter Newell accounts, the commission found at paragraph 11.5.23:-
(a) There were four sums as specified in 11.5.1, 11.5.3, 11.5.9 and 11.5.10 above received in the Carter Newell trust account aggregating K1,187,387.21 credited to this file which were derived from the NPF Tower fraud.
(b) From these funds, four payments as specified in 11.5.4, 11.5. 16, 11.5.19 and 11.5.20 above aggregating K572,850.64 were made direct from the Carter Newell trust account to Port Moresby First National Real Estate (three payments) and Ram Business Consultants (one payment). These payments have been dealt with earlier.
(c) The residue of these funds aggregating K614,563.57 plus K8847.23 from other sources was transferred from Carter Newell trust account to Carter Newell No.2 account and expended from the latter account;
(d) It is not possible to identify which part of the aggregate payments of K623,383.80 sourced from these transferred funds was funded from the K8847.23 of funds from other sources but it can be said they were sourced to the extent of K614,536.57 from the NPF Tower fraud.
(e) Those payments aggregating K623,383.80 which required further investigation are: See table 1.
The commission then set out to investigate the payments referred to in (e) above and made the following findings in sub-paragraphs 220.127.116.11 to 18.104.22.168.
At paragraph 22.214.171.124, the commission has found that:
A sum of K600 derived from the proceeds of the NPF Tower fraud was received by Jimmy Maladina in cash on July 27, 1999;
At paragraph 126.96.36.199, the commission has found that:
The payments aggregating K7656.30 for airfares were made from the proceeds of the NPF Tower fraud and that Mr Maladina, his family and Mr P Maladina received the resultant benefits.
At paragraph 188.8.131.52, the commission has found that:
The sum of K4,927.10 spent on air tickets for Mr Maladina and Dr Pok was sourced from NPF Tower fraud and the tickets were used by Mr Maladina and Dr Pok.
At paragraph 184.108.40.206, the commission has found that:
(a) The air tickets for Mr Maladina and Mr Paki on August 13, 1999, for K3773 were financed from the proceeds the NPF Tower fraud;
(b) Mr Paki was referred to the Commissioner for Police to investigate whether he committed perjury by denying his trip to Cairns and Brisbane was paid for by Mr Maladina;
At paragraph 220.127.116.11, the commission has found that:
(a) The withdrawal of K400,000.00 (or $A226,754.22) on July 30, 1999, was sourced from the NPF Tower fraud, that such payment was a benefit received by Mr Maladina and that such benefit was improper.
(b) The description of the purpose of this payment was clearly false and evidences a dishonest intention on the part of Mr Maladina in relation to these moneys; and
(c) Limitations on the territorial jurisdiction of the commission prevented it from further tracing these funds in Australia.
At paragraph 18.104.22.168, the commission has found that:
The payment of K100,000 by cash cheque # 788504 on July 12, 1999, was sourced from Tower fraud money and was drawn for the benefit of Mr Maladina, probably for political purposes.
At paragraph 22.214.171.124, the commission has found that:
The clear inference is that this K700 cash was drawn for use on Mr Maladina’s trip to Cairns on July 30, 1999, and the commission so finds.
At paragraph 126.96.36.199, the commission has found that:
Cheque # 788518 for K17,000 was cashed and the recipient cannot be traced;
At paragraph 188.8.131.52, the commission has found that:
It is likely that cheque # 788523 for K5000 was cashed for the benefit of Mr J Maladina and a Mr P Maladina;
At paragraph 184.108.40.206, the commission has found that:
It is likely that cheque # 788527 for K45,000 was cashed for the benefit of PMFNRE;
At paragraph 220.127.116.11, the commission has found that:
It is likely that cheque # 788529 for K2500 was cashed for the benefit of Mr J Maladina;
At paragraph 18.104.22.168, the commission has found that:
Cheque # 788549 which was cashed for K40,000 could not be traced further, although there is a link to Mr Maladina through the Morea Henry connection;
At paragraph 22.214.171.124, the commission has found that:
Cash cheques totalling K110,200 cashed between July 29 and September 7, 1999, were sourced from the Tower fraud money and the cash was used for Jimmy Maladina’s benefit or at his direction.
Further Tracing Of Money paid Into The Accounts Of PMFNRE
The NPF Tower fraud money paid into PMFNRE came from three sources:
(a) Kumagai payment No.1 indirectly from Ken Yapane and Associates via payments variously through Kuntila Company No.35, Mr Barker and PMFNRE;
(b) Carter Newell’s investment of fraud money in Finance Corporation; and
(c) Carter Newell by cheque or cash.
The trust account books of PMFNRE are described in paragraph 12.1.2, consisting of the earlier manually recorded No.1 Trust Account and the later computer recorded No.2 Trust Account.
“Off-book” transactions are described in paragraph 12.1.3. These often involved fraud moneys which were received and banked but for which no receipt was issued or recorded. Often they were coded “MJS/KB” (referring to Mr Sullivan and Mr Barker who had personal knowledge of these transaction as described in paragraph 12.1.4. At a later date these non-property management transactions were recorded in numbered ledgers – but still some “off-book” transactions occurred for which minimal records were kept. By calling for production of documents from banks on summons and by other means described in the Schedule, the commission has been able to elicit details of most of the “off-book” transactions.
In paragraphs 12.2.1 to 12.2.5, the commission discusses the various amounts of fraud moneys, which were paid into PMFNRE No.1 and No.2 trust accounts and this is summarised at paragraph 12.2.6 where the commission has found that the following fraud moneys were received into the ledgers indicated.
(a) Account No.246204 – the Number 1 Trust Account
(b) Account No.613086 – the Number 2 Trust Account
The amounts received into the PMFNRE No.1 Trust Account were examined in paragraph 12.3. A major problem for the investigation was that PMFNRE personnel claimed that most relevant records had been lost or removed by Mr Barker and Mr Sullivan and by their failure to co-operate with the commission. At one stage, commission staff were unexpectedly invited to visit PMFNRE premises and in one day gained considerable knowledge of how and where the records were kept. This proved most helpful.
The commission was able to reconstruct a cash book from available records which is set out at paragraph 12.3.1, as follows: See table 4.
TO BE CONTINUED