National Provident Fund Final Report [Part 66]
Below is the sixty-sixth 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 66th 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
(j) Cheque #36707 – K25,000 – January 13, 2000;
(k) Credit – K25,000 – January 14, 2000;
(l) Credit – K2,794,342 – January 15, 2000;
(m) Cheque #36710 – K29,675.77 – January 18, 2000;
(n) Credit – K413.73 – January 18, 2000;
(o) Cheque #36727 – K2000 – January 27, 2000;
(p) Credit – K31,262.04 – February 2, 2000;
(q) Credit – K3,216.92 – January 21, 2000;
(r) Reversal – K3,216.91 – January 26, 2000;
(s) Cheque #55411 – K10,000 – February 1, 2000;
(t) Cheque #55515 – K10,597.47 – February 2, 2000;
(u) Credit – K10,597.47 – February 3, 2000;
(v) Cheque #55530 – K5000 – February 3, 2000;
Credit – K5000 – February 4, 2000;
(x) Credit – K90,000 – February 11, 2000
(y) Cheque #55444 – K63,793.19 – February 16, 2000; and
(z) Credit – K63,793.19 – February 16, 2000
At paragraph 18.104.22.168, the commission has made the following findings regarding these items:
When the 26 “off-book” or “Adjustment” transactions during the period January 1 to February 16, 2000 and related earlier transactions are examined it is clear that:
(i) two transactions (being (d) and (e) above) concern PMFNRE investing rent moneys on IBD with PNGBC and obtaining interest thereon from PNGBC;
(ii) three transactions (being (g) (h) and (i) above) concern PMFNRE investing moneys on deposit with RIFL and we have yet to see who obtained the interest on those moneys;
(iii) one transaction involving the purchase of RIFL (see (b) above) was entered to eliminate an “Adjustment” item which had been transferred to Ledger 24;
(iv) THE remaining 20 transactions concerned Peter O’Neill personally or companies associated with Mr O’Neill including two debits each of K10,000 which were unreimbursed at May 31, 2000, (see (f) and (s) above), a cash payment of K25,000 which was reimbursed by Ilimo Poultry Products Limited in strange circumstances and a credit of K90,000 from Hunter Real Estate Limited which was unallocated as at May 31, 2000.
“Off-Book” adjustments February-May 2000
At paragraph 22.214.171.124, the commission then considered 35 “off book adjustments” during the period between February 16 to May 31, 2000 numbered (a) to (ii) as follows:
(a) Cheque #55446 – K500,000 – February 16, 2000;
(b) Credit – K500,000 – April 12, 2000;
(c) Cheque 36613 – K5000 – February 18, 2000;
(d) Credit – K5000 – February 18, 2000;
(e) Cheque #55459 – K5000 – February 23, 2000;
(f) Cheque #55460 – K2000 – February 23, 2000;
(g) Cheque #55567 – K3000 – March 2, 2000;
(h) Credit – K10,000 – March 7, 2000;
(i) Credit – K18,200 – February 24, 2000
(j) Dish cheque – K18,200 – February 28, 2000;
(k) Cheque #55461 – K674.93 – February 24, 2000;
(l) Cheque #55465 – K50,000 – March 1, 2000;
(m) Credit – K50,000 – March 16, 2000;
(n) Cheque #55584 – K7100 – March 10, 2000;
(o) Credit – K7100 – March 14, 2000;
(p) Cheque #55598 – K9570.43 – March 16, 2000;
(q) Cheque #67015 – K5640.40 – March 30, 2000;
(r) Credit – K15,210.83 – April 6, 2000;
(s) Cheque #67010 – K10,000 – March 29, 2000;
(t) Credit – K5000 – March 31, 2000;
(u) Cheque #67103 K1,000,000 – April 3, 2000;
(v) Credit – K1,000,000 – May 1, 2000;
Cheque #67124 – K29,102.40 – April 12, 2000;
(x) Cheque #67152 – K10,669.60 – April 20, 2000;
(y) Cheque #67164 – K100,025 – May 1, 2000;
(z) Cheque #89467 – K57,000 – May 2, 2000;
(aa) Credit – K25 – May 2, 2000;
(bb) Credit – K122,900 – May 2, 2000;
(cc) Credit – K4100 – May 15, 2000;
(dd) Credit – K12,646.45 – May 19, 2000;
(ee) Debit – K50,000 – May 17, 2000;
(ff) Credit – K50,000 – May 19, 2000;
(gg) Cheque # 9488 – K14,398.69 – May `9, 2000;
(hh) Unidentified credit – K1668.34 – May 24, 2000; and
(ii) Cheque #89500 – K70,497.16 – May 31, 2000.
At paragraph 126.96.36.199, the commission has found that: Of the 35 “off-book” or “Adjustment” transactions during the period February 16, to May 31, 2000 (including four related earlier transactions) the commission finds that:
(a) FOUR transactions (being (a), (b), (u) and (v) above) concern PMFNRE investing rent moneys on deposit with PNGBC and Bank of Hawaii and obtaining interest thereon from PNGBC and Bank of Hawaii;
(b) two transactions (being (c) and (d) above) appear only to correct an error;
(c) two transactions (being (i) and (j) above) concern an unrelated third party’s dishonoured cheque;
(d) one transaction ((w) above) involves payment of legal fees for a property management contract dispute between PMFNRE and Finance Pacific Investments Limited;
(e) one transaction (being (hh) related to a deposit which could not be identified;
(f) the remaining 25 transactions concerned Mr O’Neill personally or companies or persons associated with Mr O’Neill including a number of transactions for South Super Stores and a number of transactions that were unreimbursed as at May 31, 2000, and the commission so finds.
During the public hearing concerning the source of funds for the purchase of the Manamatana flats, the commission considers that Mr O’Neill gave deliberately false evidence. At paragraph 188.8.131.52, the commission found:
(a) Cheque #55465 for K50,000 was sourced from funds of K690,000 held in Ledger 32, over which Mr O’Neill had dominion and was for Mr O’Neill’s benefit;
(b) Mr O’Neill gave false testimony to the commission on June 28, 2001 (Transcript pp. 8632-8633);
(c) After hearing Mr O’Neill’s counsel on the subject on October 28, 2002, the commission directed counsel assisting to refer Mr O’Neill and copies of all relevant documents to the Commissioner for Police to consider whether Mr O’Neill should be charged with perjury; and
(d) THE commission also recommends that Mr O’Neill be referred to the Ombudsman Commission to investigate whether there has been a breach of the Leadership Code because of his concealed interest in Bluehaven No.67, the company which purchased the shares in RIFL while Mr O’Neill was executive director of the vendor of the shares, Finance Pacific.
Ledger 18 to February 2000
The commission also considered further transactions in ledger 18 between January and February 2000 as follows:
AT subparagraphs 184.108.40.206, the commission made the following findings:
Receipt #707129 related to the payment by RIFL cheque #12117 (BoH) for K1,781,824 being part refund of the K2,671,824 previously paid out for the purchase of RIFL shares by Bluehaven No.67 Ltd.
AT subparagraphs 220.127.116.11, the commission made the following findings:
The payments of cheque #36723 for K250,000 (and #67164 for K100,000 and #89500 for K70,496.16) were clearly made for the direct benefit of South Super Stores Limited and both Mr O’Neill and Nathaniel Poiya received a clear direct benefit from the making of these payments in that the payments reduced their personal liability under their respective personal guarantees given to Imak International Pty Limited.
AT subparagraphs 18.104.22.168, the xommission made the following findings:
The payments of PMFNRE cheques #55413 for K29,262.04 and #55414 for K2000 were made for Mr O’Neil’s benefit to reimburse payments earlier made on his behalf which had been treated “off-book” as “Aadjustments” and to bring those payments “on-book”.
AT subparagraphs 22.214.171.124, the commission made the following findings:
The receipt 707199 for a payment of K49,218.74 from RIFL recorded the money as interest on an IBD held for PMFNRE. It has not been possible to determine which IBD funds produced this interest.
AT subparagraphs 126.96.36.199, the commission made the following findings:
Cheque #55443 for K2000 was paid to LBJ Investments for the benefit of Mr O’Neill;
AT subparagraphs 188.8.131.52, the commission made the following findings:
The receipt 707369 for of K60,000 recorded the payment of K60,000 by Carter Newell cheque #800449 of K60,000 obtained from the Waigani land fraud. The money was subsequently expended from Ledger 18 for Mr O’Neill’s benefit (see paragraph 184.108.40.206 below);
AT subparagraphs 220.127.116.11, the commission made the following findings:
The K80,000 funds were used to pay Baradeen Holdings regarding the purchase of Remington Ltd by Mr O’Neill’s children’s company LBJ Investments (see paragraph 12.4.20);
AT subparagraphs 18.104.22.168, the commission made the following findings:
This payment of cheque #55454 for K200,003.70 was made for the benefit of LBJ Investments Limited as part of the process of buying Remington Ltd.
Conclusions regarding Ledger 18 – transactions January and February 2000
The commission presents conclusions and review on Ledger 18 to February 2000 at paragraph 22.214.171.124.
At paragraph 126.96.36.199, it makes the following broad findings:
(a) Apart from the K250,000 which went to Bank of Hawaii and the K1.5 million in face value in Treasury Bills all the other expenditure from Ledger 18 in this period was for Mr O’Neill’s personal benefit or for the benefit of his children’s company LBJ Investments Limited;
(b) The K250,000 paid to Bank of Hawaii was for the benefit of South Super Stores Limited and both Mr O’Neil and Mr Poiya received a direct benefit as this payment reduced their direct personal liability under their respective guarantees given to Imak International Limited. It is recommended that Mr Poiya be referred to the Ombudsman Commission for breach of the Leadership Code in that as a trustee of the NPF he received a direct benefit from the trust funds which had been obtained from by fraud;
(c) THE K60,000 came from Carter Newell and was credited to this Ledger 18. The evidence of Mr Barker regarding that money was false and knowingly false. It is recommended that if Mr Barker ever returns to PNG he should be referred to the Commissioner for Police with a view to his being charged with perjury under the Commissions of Inquiry Act; and
(d) Mr O’Neill benefitted from the K1,781,824 paid by RIFL to PMFNRE as a return of money for Bluehaven No.67 to purchase RIFL.
Ledger 31 was the new “sales ledger” which replaced ledger 18 in February 2000 and was then used as Mr O’Neill’s ledger (see paragraphs 188.8.131.52 and 184.108.40.206).
There were 60 transactions between March 6 and May 31, 2000, as follows:
TO BE CONTINUED