National Provident Fund Final Report [Part 62]
Below is the sixty-second 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 62nd 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
(d) When Mr. Maladina’s K300,000.00 of NPF Tower fraud money was added on 16th March 1999 both of these deposits became a single IBD – Deposit No. C08541 of K914,616.00.
(What happened on withdrawal of this deposit is reported under the heading of the Port Moresby First National Real estate Number 2 Trust Account paragraph 12.4.1(d)).
THE PMFNRE NO. 2 TRUST ACCOUNT
The PMFNRE No. 2 Trust Account is examined in detail in paragraph 12.4 from sub-paragraph 12.4.1 to sub-paragraph 12.4.26.
The various amount of NPF Tower fraud money known to have been transferred from the No. 1 Trust account to the No. 2 Trust Account are listed as well as amounts of Tower fraud money paid directly into the No. 2 Trust Account and amounts paid in from the Nambawan finance deposit (see 12.4.1). Each payment was traced by the Commission, which determined which amounts were credited as “off-book” and which amounts were credited to a numbered ledger.
The results were as follows:-
(a) K100,000 cheque # 266929 transferred form No. 1 Trust Account to No. 2 Trust Account 14th May 1999 (on the same day cheque # 263729 was drawn to cash which was cashed and collected by one Dick Yanda);
(b) From 30th May to 29th September 1999 money transferred from No. 1 Trust Account to No. 2 Trust Account was as follows (only K55,120 being “suspect”:-
The ledgers to which those funds were credited are also shown.
(c) Tower Fraud money paid direct to No. 2 Trust Account:
The ledgers to which those funds were credited are also shown.
(d) From the Nambawan Finance IBD (which included K300,000 of Tower Fraud money) (see paragraph 7.2) the following was paid via the No. 1 Trust Account to the No. 2 Trust Account.
K55,120 for vehicle and K920 for Mr. O’Neill’s benefit
(See detailed discussions at paragraph 12.4.1).
The Commission then conducted a ledger-by-ledger examination in date order.
The “off-book” or adjustment items were considered in paragraph 12.4.2.
Each item is considered in detail in a separate sub-paragraph. The Commission made the following findings and referrals.
At paragraph 184.108.40.206, the Commission has found:-
The Commission was unable to ascertain who Dick Yanda was and thus could not trace the K100,000.00 further.
At paragraph 220.127.116.11, the Commission has found:-
The payment of K55,120.30 by cheque # 286403 was for the benefit of Mr. P. O’Neill.
At paragraph 18.104.22.168, the Commission has found:-
The Commission finds that this payment of cheque # 263604 K100,000.00 was made by PMFNRE for and on behalf of Mr. Peter O’Neill to secure his 25% shareholding, held in the name of Mr. Jack Awela, in Nama Coffee Exports Limited.
At paragraph 22.214.171.124, the Commission has found:-
Mr. O’Neill was concealing his interest in Nama Coffee Exports Ltd, which had borrowed K4 million from PNGBC while Mr. O’Neill was Executive Director of Finance Pacific which owned / controlled PNGBC.
At paragraph 126.96.36.199, the Commission recommends that Mr. Peter O’Neill be referred to the Ombudsman Commission:-
(a) to consider whether he has breached the Leadership Code by receiving the benefit of money derived from the NPF Tower fraud and by concealing his interest in Nama Coffee Exports Ltd.
(b) consider whether Mr. O’Neill has breached the Leadership Code when executive Director of Finance Pacific when PNGBC extended loan facilities to Nama Coffee Exports Ltd in which Mr. O’Neill had an undisclosed interest .
At paragraph 188.8.131.52, the Commission has found:-
This payment of K29,500 was the refund of deposit less agreed costs and the payment was made for the benefit of Hunter Real Estate Limited.
At paragraph 184.108.40.206.1, the Commission has found:-
That the payment of cheque # 263673 for K30,400 was a payment by Ikub Consultancy Ltd (Dr. Rad) to PMFNRE as rental on Mr. Skate’s property and was on-paid by PMFNRE to Mr. Skate’s loan account.
At paragraph 220.127.116.11, the Commission has found:-
The payment of cheque # 263799 for K22,799.82 was for the benefit of Mr. P. O’Neill.
The Commission’s detailed examination of Tower fraud moneys credited to PMFNRE Ledger 8 is reported in paragraph 12.4.3 to 18.104.22.168.
Using additional documents provided by Mr. Joseph Kup the Commission reconstructed PMFNRE Ledger 8 as follows:-
For the reasons set out in sub- paragraphs 22.214.171.124 to 126.96.36.199, the Commission made the following findings:-
At paragraph 188.8.131.52, the Commission has found:-
The proceeds of cheque # 385454 for K5,000.00 cash.
In view of the transactions which follow and the timing of this payment it is quite likely that the K5,000.00 was used to purchase tickets in the annual Aviat Club Melbourne Cup Calcutta.
At paragraph 184.108.40.206, the Commission has found:-
Cheque # 26630 for K25,500.00 was banked to the credit of the bank account of Norman Kenneth and Remidius Barker with Westpac Bank.
In view of what follows it is almost certain that this K25,500.00 was used to pay the cost of the horses purchased as specified in (d) below in the Aviat Club Melbourne Cup Calcutta auction.
At paragraph 220.127.116.11, the Commission has found:-
This Aviat Club cheque # 352264 for K32, 000.00 was in payment of this Calcutta prize money (Exhibits T1500-1503) won in Mr. Fabila’s name when the horse purchased in the Calcutta (Rogan Josh) won the Melbourne Cup.
At paragraph 18.104.22.168, the Commission has found:-
This cheque for K1,500 was profit on the Calcutta prize money (and arrived at by deducting from the prize money of K32,000.00 the cost of tickets of K5,000 and cost of the horses bought in the Calcutta auction of K25,500.00) and was taken in cash.
At paragraph 22.214.171.124, the Commission has found:-
The cheque itself was made payable to “FARAGAMO LTD” (Exhibit T1509) and banked to the credit of Jimmy Maladina’s company Ferragamo Limited with Bank of Hawaii Port Moresby on 18th November 1999 (Exhibit T1510-1512).
At paragraph 126.96.36.199, the Commission has found:-
The Commission notes that the transfer is said to “TRANSFER REF PON” thus indicating the transfer was made at the request or direction of Peter O’Neill and that Peter O’Neill exercised dominion over these funds and the Commission so finds.
The Commission reports upon Ledger 9 at paragraph 12.4.4. The Ledger was reconstructed as follows:-
This ledger concerns the use of Tower fraud money in the purchase by Bluehaven No 42, of the Manamatana Flats. The Commission has found that Bluehaven 42 was owned by Mr. O’Neill (with shares being held on trust for him) and that on 8th March 2000 it was owned by LBJ Investments a company set up for Mr. O’Neill’s children.
Sums of K150,000, K160,000 and K600,000 were credited to Ledger 9.
The balance of the purchase price for the Manamatana Flats was paid out of PMFNRE in April 2000 at which time Bluehaven No 42 was owned by Mr. O’Neill’s children’s company, LBJ Investments.
After the Commission of Inquiry was established on 11th April 2000, attempts were made to hide the source of the funding by fabricating an agreement between Global Halshaw and Property and Investment Consultants Ltd (Mr. Sullivan) shown as dated 24th June 1999, lending funds to purchase investment properties in Port Moresby. This document is clearly false and ignores the fact that Property and Investment Consultants was not a shareholder in Bluehaven No 42 (see description of the attempted cover up at paragraph 188.8.131.52).
It is clear that Messrs Sullivan, Barker and O’Neill have been involved in this cover up and that Messrs Barker and O’Neill committed perjury. Messrs Barker, Sullivan and Maladina left PNG soon after the establishment of the Commission of Inquiry and have not returned.
At paragraph 184.108.40.206, the Commission has found:-
(a) At the time of the purchase by Bluehaven of the Manamatana flats, Bluehaven was beneficially owned by Mr. P. O’Neill.
(b) K150,000 receipted by receipt no. 70547 used in the purchase was derived from the NPF Tower fraud.
(c) K160,000 of the funds receipted by receipt no. 70546 was derived from Nambawan Finance IBD which included K300,000 derived from the NPF Tower fraud
(d) The K600,000 paid to complete the purchase was derived either from moneys fraudulently obtained by Mr. Maladina from the sale of the Waigani land or from Niugini Aviation in Hong Kong.
(e) Messrs Maladina, O’Neill, Sullivan and Barker are well aware of the true facts concerning these moneys and this transaction. Each of Mr. O’Neill and Mr. Sullivan have not given evidence which can be accepted by the Commission.
(f) The evidence of Mr. Barker in relation to what occurred with this K600,000 is clearly false and knowingly false.
Although Mr. Ken Barker committed the crime of perjury before the Commission in relation to what occurred with this K600,000.00, the Commission believes it would be a waste of resources to refer him to the Commissioner for Police as he has departed PNG permanently. He should be referred if he ever returns.
(g) On the 28th October 2002, the Commission directed Counsel Assisting to refer Mr. O’Neill to the Commissioner for Police to investigate whether he should be charged with perjury concerning his evidence on this issue.
Ledgers 10 and 12
Ledgers 10 and 12 are dealt with together at paragraph 12.4.5 and following sub paragraphs. These ledgers do not contain NPF Tower fraud moneys. They deal with other moneys transferred from PMFNRE No 1 Trust Account to the No 2 Trust Account. The Commission studied them in detail as part of its assessment of Mr. O’Neill’s explanations.
TO BE CONTINUED