Home > Corruption, Papua New Guinea > National Provident Fund Final Report [Part 63]

National Provident Fund Final Report [Part 63]

November 2, 2015 Leave a comment Go to comments

Peter O’Neill continues to feature heavily…

Below is the sixty-third 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 63rd 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

Each item is considered in paragraph 12.4.5 in accordance with the relevant letter (a) to (k) in the left hand column of the ledger.

63 table 1

63 table 2

As earlier reported, the funds credited to the two ledgers were not derived from the NPF Tower fraud.

The K183,600 credited to Ledger 10 was the balance of “commissions” and sales tax paid to PMFNRE on the sale by Investment Corporation of Ilimo Farm.

The balance of K300,000.00 of that “commission” had been paid in cash out of PMFNRE No.1 Trust Account and the balance K183,600.00 was transferred from PMFNRE No.1 Trust Account to PMFNRE No.2 Trust Account and credited to Ledger 10.

The aggregate K275,000.00 credited to Ledger 12 was derived from National Court proceedings between Mr O’Neill and Mr and Mrs Donald in relation to Hunter Real Estate Limited. That money was also deposited to the credit of the PMFNRE No.1 Trust Account and then transferred in three parcels to the PMFNRE No.2 Trust Account where it was credited to Ledger 12.

The first relevance of these ledgers was to trace the transfers of funds from PMFNRE No.1 Trust Account to PMFNRE No.2 Trust Account as part of the exercise of explaining such transfers.

The second relevance was to disclose transactions, which related to Mr O’Neill as part of the accounting for receipts and payments on his behalf.

The third relevance was to show that K295,600.00 was paid to Mr O’Neill’s company, Pangia Enterprises Limited as a “full settlement” on July 26, 1999.

This tended for reasons stated, to undermine the explanation that the K100,000.00 earlier paid to Mecca No.36 was in fact a payment of overdue rent payable by PMFNRE to Pangia Enterprises Ltd on a property in Gordons.

The final relevance was a payment of K50,000.00 said to be made on July 28, 1999 to Mr Sullivan which we consider is linked in a way which we have not been able to discern with the transactions on Ledger 15 (as dealt with in paragraph 10.3.9 below).

Ledger 11

Ledger 11 is reported at paragraph 12.4.6 and the following sub- paragraphs. The ledger consisted of the following entries:

63 table 3

Findings

The commission’s findings on significant items are:

At paragraph 12.4.6.1, the commission has found that:

The K85,949.67 credited to Ledger 11 ref. 705577, was previously withdrawn from Nambawan Finance IBD, which contained NPF Tower fraud money;

At paragraph 12.4.6.2, the commission has found that:

The sum of K10,833.33 credited to Ledger 11 was rent money received on Mr O’Neill’s property

The next three debits total K45,460.11 and all were for Mr O’Neill’s benefit.

The commission’s findings at the following paragraphs are:

At paragraph 12.4.6.3, the commission has found that:

(a) The amount of K20,025.70 was used to pay Mr O’Neill’s Amex Card debt;

(b) The benefit to Mr O’Neill was concealed.

At paragraph 12.4.6.4, the commission has found that:

The cheque #53344 for K9,226.71 paid three amounts on behalf of Toanamo Apartments Ltd a company owned by Mr O’Neill’s family company LBJ Investments through Jack Awela as nominee shareholder. The payment was for the benefit of Mr O’Neill;

At paragraph 12.4.6.5, the commission has found that:

(a) Cheque # 35416 for K16,207.70 paid stamp duty on the purchase of Daugo Drive property by Mr O’Neill and was for his benefit;

(b) The whole K45,460.11 shown on Mr Kup’s adjustments list was expended for Mr O’Neill’s benefit.

On July 22, 1999, PMFNRE cheque #286503 for K12,292 was drawn in favour of the operating account.

It was reimbursed from the operating account in five payments, which has enabled the commission to assess who obtained the benefits of the five debits.

The details are discussed in paragraph 12.4.6(d) and the commission has found:

At paragraph 12.4.6.6 and 12.4.6.7:

(a) The payment by cheque #991590 for K2406 was for land lease rent on Allotment 2 Section 58 Boroko owned by trustees of Christian Brothers;

(b) This payment of K2556.00 was made for the benefit of Mr O’Neill and was used to buy airfares for his wife Cheryl Caley;

At paragraph 12.4.6.8, the commission has found that:

The payment of K1,000 was for the benefit of Mr O’Neill;

At paragraph 12.4.6.9, the commission has found that:

No records were produced to explain this cash reimbursement to Mr O’Neill;

At paragraph 12.4.6.10, the commission has found that:

The sum of K1,300 purchased airfares for the benefit of Mr O’Neill;

At paragraph 12.4.6.10.1, the commission has found that:

The debit of K21,200.00 ref 286508 reimburses two “adjustments” for K16,000 and K5,200 (no records were produced to explain these amounts).

The K16,000 was repaid of deposit to BPNG staff member on a property sale which fell through;

At paragraph 12.4.6.11, the commission has found that:

The transfer of K17,830.89 to Ledger 14 was used to partly repay a loan of K18,600 previously “borrowed” by Mr O’Neill.

Conclusions regarding Ledger 11 

With regard to Ledger 11, the commission has concluded as follows:

The only funds credited to Ledger 11 were Mr O’Neill’s housing allowance of K10,833.33 for July 1999 which had been transferred from PMFNRE No.1 Trust Account to PMFNRE No.2 Trust Account and the precise and odd amount of K85,949.57 which was withdrawn from the Nambawan Finance IBD.

As the function of a Ledger is to define which moneys in a mixed account belong to a given person, it would be very unusual for Mr O’Neill’s funds to be mixed with any other persons funds unless they were part of a “common fund”.

On the expenditure side there were essentially three payments made by cheque #286501 for K45,460.11, cheque #286503 for K12,292 and cheque #286508 for K21,200.

The first cheque for K45,460.11 was all spent for Mr O’Neill’s benefit in reimbursing payments for foreign currency, land rent and stamp duty on the purchase of the Daugo Drive property. It also seems quite clear that the second cheque for K12,292, despite the professed lack of records held by PMFNRE was also spent substantially if not wholly, for Mr O’Neill’s benefit on airfares for his former wife of K2556, cash for Peter K5000 i.e. K7556 and on payments of land rates and airfares of which PMFNRE quite incredibly says it has no records even though the payments were reimbursed to its operating account.

As to the final payment of K21,200, the commission has the explanation of central bank as to K16,000.00 and again PMFNRE tells the commission it has no records which show what the additional K5200 was paid for into its operating account.

There is, because of the source of funds and the pattern of all payments with a known destination being for Mr O’Neill’s benefit, every reason to infer that the incredibly unexplained payments were also for Mr O’Neill’s benefit.

The final journal transfer of K17,830.89 from Ledger 11 to Ledger 14 was clearly “Adj for borrowings P.O.” and again has a clear nexus to Mr O’Neill.

This payment related to the K18,600 sales tax on the Ilimo Farm “commission” which was included in the payment made to Mr O’Neill’s company Pangia Enterprises Limited.

The mixing of funds which were expended for Mr O’Neill’s benefit and those for the benefit of PMFNRE, particularly the refund of the K16,000 deposit to the central bank tend to indicate that Mr O’Neill’s funds and those of PMFNRE were treated as one and to reinforce the reference that PMFNRE was owed by Mr O’Neill.

63 table 4

The commission became interested in Ledger 14 because funds held on behalf of clients for VAT were apparently being borrowed from it. Mr O’Neill’s borrowing was largely repaid by a transfer from Ledger 11 as described above. The commission reports, however, in detail how Mr Barker also helped himself to K30,000 from this ledger.

Findings 

At paragraph 12.4.7.1, the commission has found that:

It is quite plain that Mr Barker made great efforts to conceal the clear fact that he had helped himself to K30,000 which had been in the hands of PMFNRE as VAT and sales tax and in the process left an insufficient sum credited to the ledger to pay the full sales tax payable of K18,600 on the PMFNRE “commission” from the Illimo Farm sale.

Ledger 15

Ledger 15 is dealt with at paragraph 12.4.8. It consists of:

(a) A credit of K50,000.00 commission from a sale by Lamana Developments to POSF;

(b) A debit of K50,000 paid to Cairns solicitors Williams Graham and Carman regarding the purchase of the Kanimbla property in Queensland by Mr O’Neill’s company Bethgold. It suggests a link between the transactions.

Findings

At paragraph 12.4.8.1, the commission has found:

The commission is not able to define the association between this receipt and payment each of K50,000, but in our view they are related. The use of the K50,000 commission paid by Lamana Developments Limited, which is not included in the profit and loss account, to make an unrelated payment to the Cairns solicitors Williams Graham and Carman – which was clearly for the Kanimbla property for Bethgold Pty Limited – strongly suggest a link with at least one of the other K50,000.00 transactions.

TO BE CONTINUED

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  1. November 3, 2015 at 12:00 pm

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