Home > Corruption, Papua New Guinea > National Provident Fund Final Report [Part 64]

National Provident Fund Final Report [Part 64]

November 3, 2015 Leave a comment Go to comments

Below is the sixty-fourth 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 64th 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 

Chronological overview 

At paragraph 12.4.9 of Schedule 6, the commission has presented a chronological overview of payments in and out of the PMFNRE No.1 and No.2 Trust accounts.

It shows that there were some of Mr O’Neill’s funds in the trust accounts at various stages during 1999 but that at each stage the payments out of the accounts, which are proven to have been for his benefit and/or made at his directions, far exceeded the amount of Mr O’Neill’s funds available to fund these payments out for his benefit.

These other funds, which must have funded these payments out for Mr O’Neill’s benefit, included large amounts which had been derived from the NPF Tower fraud (and at least K600,000 which derived from the sale of the Waigani land, which had previously been invested on IBD with Nambawan Finance for Jimmy Maladina’s benefit).

The commission finds in paragraph 12.4.8, that Mr O’Neill’s explanation that he at all times had ample legitimate funds in PMFNRE accounts to fund the payments made for his benefit is demonstrated to be untrue. It is quite certain that very significant payments, which derived from the NPF Tower fraud, were paid for his benefit.

The chronological overview deals with Mr O’Neill’s benefits from outside funds from various sources, including commission on the sale of Ilimo Farm, but we are confined by the commission’s terms of reference to limit our report to outside funds derived from the NPF Tower and Waigani land frauds. In this regard the commission reports at paragraph 12.4.9.2.6(e) (p318).

(e) The real impact arises from the transactions on Ledger 11 to which Mr O’Neill’s July housing allowance of K10,833.33 and the K85,949.57 withdrawn from the Nambawan Finance Limited IBD were credited and the four payments by which those funds aggregating K96,782.90 were disbursed. It is clear that the following expenditure reimbursed from that money was expended for the benefit of Mr O’Neill:

(i) The K20,025.70 balance for the remittances to Amex and Cheryl Caley;

(ii) The K16,207.70 paid for stamp duty on the purchase of Mr O’Neill’s Daugo Drive property;

(iii) The K2,556.80 paid to Qantas for airfares for Mr O’Neill;

(iv) The K1000 paid to Young & Williams for legal fees for Bluehaven No.42 Limited;

(v) The K5000 provided via the cheque shown as drawn to Geuhena Limited but what was in fact shown by Mr Barker as paid to Mr O’Neill;

(vi) The repayment of K17,830.89 of K18,600 in VAT on the Ilimo Farm commission which was “borrowed” to make the payment of K195,600 to Pangia Enterprises Limited.

Thus a total of K62,621.09 of this expenditure, including fraud money derived from the Nambawan IBD, was quite clearly paid for Mr O’Neill’s benefit and bearing in mind that only Mr O’Neill’s housing allowance and IBD funds withdrawn from Nambawan Finance were credited to this Ledger 11, we believe the other payments of the balance of these funds would almost certainly have been for Mr O’Neill’s benefit.

Findings 

At paragraph 12.4.9.2.7, the commission has found that:

(a) Payments made by or on behalf of Mr O’Neill to PMFNRE up to the end of March 1999 aggregated K189,569.91.

It was not possible to ascertain what amounts of that aggregate were attributable to investment in PMFNRE’s IBD with Nambawan Finance Limited and/or funds transferred to Carter Newell and/or funds taken in cash.

(b) It is plain that all of the K56,040 of the first withdrawal of funds from that IBD and most, if not all, of the K85,949 of the third withdrawal of funds from that IBD aggregating K141,989 were applied for Mr O’Neill’s benefit.

Inferentially, this would indicate up to that amount of Mr O’Neill’s funds was in fact invested in the Nambawan Finance IBD;

(c) Other expenditure made by PMFNRE on behalf of Mr O’Neill between March 1 and July 31, 1999, and which was not reimbursed far more than accounts for the residue of Mr O’Neill’s funds even on the most favourable scenario for Mr O’Neill;

(d) In total accounting for Mr O’Neill’s funds on the most favourable scenario to him, the following payments were not attributed against Mr O’Neill’s funds:

(i) the loan of K25,000 paid by PMFNRE No.2 Trust Account cheque #263663 on April 19, 1999, to PMFNRE No.1 Trust Account;

(ii) the refund of K29,500.00 paid by PMFNRE No.2 Trust Account cheque #263670 to Peter Pena & Associates of deposit moneys paid to Hunter Real Estate Limited;

(iii) the payment of K30,400 paid by PMFNRE No.2 Trust Account cheque #263673 to the credit of the fully drawn loan account of Hon. William Skate;

(iv) the payment of K50,000 to Mr O’Neill’s former wife Cheryl Caley by PMFNRE No.1 Trust Account cheque #266923 on May 4, 1999;

(v) the payment of K100,000 to Mecca No.36 Limited by PMFNRE No.1 Trust Account cheque #266932 on May 17, 1999, this company being owned by Mr O’Neill and Nathaniel Poiya;

(vi) the second withdrawal of K160,000 from the Nambawan Finance IBD on June 25, 1999, which was credited to Ledger 9 and used by Mr O’Neill’s company Bluehaven No.42 Limited to purchase the Manamatana flats;

(e) Clearly, payments (iv) and (v) were paid from moneys derived from the NPF Tower fraud and have never been reimbursed.

Payments (vi) was combined with K150,000 derived from the NPF Tower fraud to pay the deposit stamp duty and building inspection costs on the Manamatana flats and leave a small residue to pay the fees payable to Bank of Hawaii in part.

Payments (i), (ii) and (iii) were still not reimbursed as at May 31, 2000. All were treated as “loan to trust a/c 1” and it remains to be explained whose funds the payments were charged against and who if anyone, has the obligation to repay the money.

(f) Mr O’Neill has failed to explain his involvement in the Coringa Limited purchase the subject of PMFNRE Ledger 8, in terms both of the K25,500 said to have been paid for his “outgoings” by PMFNRE cheque #26630 drawn on November 2, 1999, and the K27,500 which was transferred by PMFNRE journal entry 3437 at his apparent direction to the credit of Ledger 18 on November 17, 1999.

Carry over items 

Items not yet accounted for are listed at paragraph 12.4.9.2.8 as “carry over matters”.

The chronological accounting for transactions in PMFNRE No.2 Trust Account continues in paragraph 12.4.10 for the period August to December 1999. There the commission considers whether payments out for the benefit of Mr O’Neill could have been sourced from Mr O’Neill’s own legitimate funds held on his behalf by PMFNRE.

Incoming funds for Mr O’Neill of: Housing allowance K10,833.33 — Ledger 18;
Finance Pacific payout K390,000 — Ledger 18;
Interest on K1m. Treasury Bills K120,850 — Ledger 18;
Total incoming funds PON — K521,683.33

10.3.10 Adjustment items to December 1999

The commission was able to make the following findings regarding these few adjustment items.

Findings

At paragraph 12.4.10.1.1, the commission has found that:

Cheque #350109 for K1806.40 was paid for the benefit of Mr O’Neill;

At paragraph 12.4.10.1.2, the commission has found that:

The K10,000 was loaned from PMFNRE to Hunter Real Estate Limited, for the benefit of Mr O’Neill. In the course of detailed examination of PMFNRE’s books, it was frequently necessary to summons documents to be produced by PMFNRE employees Rupa Siba and Joseph Kup. The commission encountered a lot of obstruction in this process. At paragraph 12.4.10.3.2, the commission has found that: Mr Kup deliberately obstructed the commission’s inquiries by withholding documents and fabricating adjustment figures.

Some of the payments out are discussed in relation other ledgers but the commission made the following findings on the elimination of adjustment items.

At paragraph 12.4.10.3.3, the commission has found that:

The payment of K3770.20 by cheque #382446 was clearly made for the benefit of Mr O’Neill’s company Hunter Real Estate Limited;

At paragraph 12.4.10.3.4, the commission has found that:

The deposit of K17,631.35 used to purchase a bank cheque for $A10,000 was for the benefit of Mr O’Neill;

At paragraph 12.4.10.3.5, the commission has found that:

The payment of K111.32 by cheque #26783 was for Mr O’Neill’s benefit; and

At paragraph 12.4.10.3.6, the commission has found that:

This cheque #26785 for K5000 was for cash, the recipient of which was Mr O’Neill.

Payment to Mr Skate is not connected with fraud money 

During the course of its investigations, the commission was troubled by discovering an unexplained payment to Hon. Bill Skate, the former Prime Minister. Careful attention was given to this payment because of the prominence of Mr Skate’s position.

The commission is satisfied that the payment was from Mr Skate’s rent allowance, legitimately received from the National Parliament.

It had been incorrectly treated in PMFNRE books to create the suspicious appearance that South Super Stores had subsidised the payment of K30,000 into Mr Skate’s loan account.

Findings

Summing up the items listed as adjusting in the period August to December 1999, the commission has found at paragraph 12.4.10.4:

(a) There are a number of items included as “Adjustments” which were quite clearly not “off-book” items and which may have been included to conceal the source of funds from which cheque #350132 for K30,000 was reimbursed;

(b) The bulk of the “Adjustments” items have a clear association with Mr O’Neill and his company Hunter Real Estate.

Ledger 18 – Additional items August to December 1999. 

At paragraph 12.4.11, the commission examines additional items on Ledger 18.

With additional documentation and further evidence, the commission was able to construct Ledger 18 almost in its entirety as follows:

64 table 2 a

64 table 2 b

TO BE CONTINUED

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  1. November 4, 2015 at 12:00 pm

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