Home > Corruption, Papua New Guinea > National Provident Fund Final Report [Part 67]

National Provident Fund Final Report [Part 67]

November 6, 2015 Leave a comment Go to comments

Below is the sixty-seventh 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 67th 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

67 a 1

67 a 2

Ledger 31 is considered at paragraph 12.4.21 – not all items are analysed. There were five main sources of credit to Ledger 31:

(i) Interest of K22,287, K22,580, K21,165 and K19,303 on K1.5 million in Treasury Bills;
(ii) Three sums of K897,741.94, K300,000 and K890,368.74 from Carter Newell Lawyers;
(iii) Interest of K41,148, K9299, K40,087 and K6950 on a sequence of four Treasury Bills financed from the Carter Newell money and other accumulations on the Ledger;
(iv) A transfer of K40,000 from Ledger 32;
(v) Funds said to be provided for or from Mr O’Neill of K109,631.26 and K150,000.


At paragraph, the commission has found:

(a) During the period March to May 2000 the K1.5 million face value in Treasury Bills earlier held to the credit of PMFNRE Ledger 18 was “rolled over” on an approximate monthly basis and at each “roll over” the interest after tax, paid by the Bank of Papua New Guinea, was credited to Ledger 31, such interest aggregating K85,335.00 over the period;

(b) On March 16, 2000, a sum of K40,000 was transferred to this ledger and paid out on the same day by a cheque in favour of Mr O’Neill’s wife, Linda Babao. Both the transfer and payment were made at Mr O’Neill’s request or direction;

(c) On April 5 and 6, 2000, a total of K2,088,110.68 was paid by Carter Newell Lawyers to PMFNRE and credited to this Ledger 31. Out of these funds and Treasury Bill interest and further funds provided by or for Mr O’Neill a further K2,235,000 in face value in Treasury Bills was purchased;

(d) The other major transactions involved the payment to Mr O’Neill of K102,500 in cash on April 10, 2000, and receipts from or for Mr O’Neill of K109,631.26 on April 11, 2000, and of K150,000 on April 18, 2000, which consisted of K85,000 in cash and K65,000 derived from a “round robin” of PMFNRE cheques;

(e) On the expenditure side, there were major payments of K2,235,000 for Treasury Bills; substantial cash payments for Mr O’Neill (and the K40,000 for his wife); the reimbursement of K25,210.83 in “off book” adjustment items paid for Mr O’Neill and a miscellany of other payments which appear to have been for the benefit of Mr O’Neill and companies and persons associated with Mr O’Neill;

(f) Except for the payments for the Treasury Bills, no one but Mr O’Neill can be seen to have benefitted from payments debited to this ledger;

(g) Ledger 31 was Mr O’Neill’s ledger.

Ledger 32 

The four relevant entries on this ledger are:

67 b

After examining these four items at paragraph 12.4.23, the commission has found at paragraph that:

(a) This Ledger 32 was used largely as a suspense account to receive the K690,000 paid by Carter Newell Lawyers and then to transfer K600,000 of that money to Ledger 9 to meet the balance payable for the Manamatana flats; to transfer the K40,000 to Ledger 31 for payment to Mr O’Neill’s wife Linda Babao and finally to re-bank to the PMFNRE bank account the sum of K50,000 which reimbursed an earlier payment of K50,000 to Carter Newell which had earlier been treated “off-book” as an “Adjustment” item;

(b) The K690,000 came into the books of PMFNRE “awaiting further action” as the receipt stated and the two transfers by journal entries were made at the request or direction of Mr O’Neill;

(c) The payment made earlier to Carter Newell which was reimbursed was also made at the request or direction of Mr O’Neill;

(d) Mr O’Neill exercised dominion over these funds in Ledger 32 and their disposal.

Ledger 34

Ledger 34 has been reconstructed for April 2000 as follows:

67 c

The only funds coming into this ledger was interest on Treasury Bills. The major expenditure was the K30,000 transferred to Ledger 31 for Mr O’Neill’s benefit.

Mr O’Neill seems to have been the only beneficiary of payments out of ledger 34;


At paragraph, the commission has found that: Mr O’Neill was the major if not the sole beneficiary of the interest paid into Ledger 34 which derived from the K1.5 million Treasury Bill which had been purchased from the funds returned by RIFL to PMFNRE and credited to Ledger 18.

Return of funds from RIFL

At paragraph 12.4.24 the commission examines the transactions between PMFNRE and RIFL in late 1999 and January 2000 when substantial funds were being deposited and withdrawn from RIFL during and after the purchase of its shares by Bluehaven No.67.

After withdrawing K2,550,000 from its IBD with PNGBC RIFL paid three cheques to PMFNRE totalling K2,581,04.47 as follows:

Cheque 12117 – K1,781,824;
Cheque 12118 – K150,000;
Cheque 12119 – K49,218.47;
Total: K2,581,042.47

The commission established that cheque 12117 for K1,781,824 was the return of RIFL share purchase money and investigated which of the contributors to the purchase money received a return of their funds from this amount.

(a) Apart from the K250,000.00 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.


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