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Posts Tagged ‘National Provident Fund’

Current corruption scandal has its roots in the NPF saga

June 30, 2015 1 comment

Have a look at some of the Findings of the NPF Commission of Inquiry, you might just a have a better appreciation about the people now being talked about as a result of the SBS Dateline Video.

Look at how much money was lost then and since and this country continues to loose millions (by now it must be Billions) to a few filthy rich Papua New Guineans with their expatriate friends.

Corruption is derailing this country and the rights of the future generations to benefit from their equal share. We all have to act to stem this at the bud.

NPF Final Report

Post Courier, 2003

This is the 60th 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 20by Prime Minister Sir Michael Somare.

Executive Summary Schedule 6
Of major concern to the commission were large payments to Mecca No.36 Pty Ltd (now South Supa Store) owned by Peter O’Neill and NPF trustee Nathaniel Poiya.
Findings
The commission finds the deposit of K10,833.33 was in respect of Mr O’Neill’s rental allowance for April 1999 and in consequence that K10,833.33 of Mr O’Neill’s funds were held in this account.
* In paragraph 12.3.2.2, the commission made the following findings:
(a) PMFNRE cheque # 266923 for K45,000 was sourced from the NPF Tower fraud money;
(b) As a consequence, K5,000 of the Tower fraud funds remained in this account;
(c) As we have said earlier, we will come back to the payments to Williams Graham & Carman shortly. Mr O’Neill’s evidence was that none of these earlier payments had been made for his benefit so his K10,833.33 should still have been held plus the K5,000 of NPF Tower fraud moneys aggregating K15,833.33;
(d) The cashbook balance according to PMFNRE (Exhibit T1017) was only K10,854.68. Again it is clear either PMFNRE was “using” this money or Mr O’Neill’s or the NPF Tower fraud funds had been used to pay other cheques;
* In paragraph 12.3.2.3, the commission made the following findings:
The two cheques each for K50,000 presented on May 4, 1999, were funded from the NPF Tower fraud money;
* In paragraph 12.3.2.4, the commission made the following findings:
(a) After considering the whole of the available evidence, the commission finds that the sum of K102,300 paid by the Carter Newell cheque # 788441 which was derived from the NPF Tower fraud money was placed under the control of Maurice Sullivan and Ken Barker of PMFNRE upon its deposit on May 4. 1999, and that in exercise of the control so placed in him Mr Barker on the same day directed payment out of such funds of the two cheques # 266924 and 266925 each for K50,000 to PNGBC the first to make an International Money Transfer of the equivalent of K50,000 to Williams Graham & Carman, Solicitors of Cairns Australia and the second to make an International Money Transfer of the equivalent of K50,000 to Mr O’Neill’s former wife Cheryl Caley;
(b) The commission further finds that the bank fees of K36 were also paid from this deposit and that all of these payments were from funds derived from the NPF Tower fraud.
(c) It follows from these findings that of the funds remaining in this PMFNRE No.1 Trust Account after such payments and the debit of bank charges the residue of this K102,300 deposit amounting to K2264 plus the earlier residue of K5000, aggregating K7264 were held out of the NPF Tower fraud moneys and that K10,833.33 was held on behalf of Mr O’Neill;
* In paragraph 12.3.2.5, the commission made the following findings:
The commission finds that this deposit of K10,833.33 was in respect of Mr O’Neill’s rental allowance for May 1999 and in consequence of its other findings that the funds of Mr O’Neill held in this account increased to K21,666.66;
* In paragraph 12.3.2.6, the commission made the following findings:
There is insufficient evidence for the commission to make any definite finding in relation to these two payments of K6000 and K5000.
* In paragraph 12.3.2.7, the commission made the following findings:
The only source from which this cheque for K100,000 could have been fully funded was the deposit of K300,000 on the same day (see (m) above), which was derived from the NPF Tower fraud;
* In paragraph 12.3.2.8, the commission made the following findings:
(a) Cheques # 266930 and # 266931 aggregating K17,379.11 were paid from Mr O’Neill’s own funds;
(b) The dilemma, as we have said earlier, is that if the K10,833.33 of Mr O’Neill was applied in the earlier payment of K50,000 to his former wife, then there would not have been sufficient of his funds to cover this second payment to his former wife;
(c) Again the situation is confused by the use of the MJS/KB code on deposits of both NPF Tower fraud moneys and Mr O’Neill’s moneys and the payment out of moneys for the benefit of Mr O’Neill as well as others;
(d) Later investigations support the possibility that the various credits formed one common fund;
* In paragraph 12.3.2.9, the commission made the following findings:
(a) It is totally clear that the deposit of K300,000 on Friday, May 14, 1999, derived from the NPF Tower fraud was banked with the “MJS/KB” code; that the K100,000 transfer to PMFNRE No.2 Trust Account on the same day was sourced from this deposit; that the K100,000 transfer to Mecca (No.36) Pty Limited the following Monday also with the “KB/MJS” code was also sourced from this deposit and finally that the cash withdrawal of K100,000 on the following Friday yet again with the “KB/ MJS” code was also sourced from that deposit;
(b) As will be seen later in this report, the K100,000 transferred to PMFNRE No.2 Trust Account was also converted to cash on May 14, 1999, and could not be traced further;
(c) On the evidence before the commission, it is clear that the second K100,000 was received by Mecca (No.36) Pty Ltd and that such money was not earned;
* In paragraph 12.3.2.10, the commission made the following findings:
(a) The payment of K100,000 to PMFNRE No.2 Trust Account on May 14, 1999, derived from the NPF Tower fraud and could not be traced further;
(b) The cash withdrawal of K100,000 on May 21, 1999, was derived from the NPF Tower fraud and was received by Ken Barker and later paid to Jimmy Maladina;
(c) The payment of K100,000 to Mecca No.36 on May 17, 1999, was derived from the NPF Tower fraud and it was unearned by Mecca No. 36;
(d) Mr Poiya was a substantial shareholder in and director of Mecca No.36 Pty Ltd (now South Super Stores Ltd). At the time of the K100,000 payment to Mecca No.36 Mr Poiya was a trustee of the NPF;
(e) MR Poiya and Mr O’Neill benefited from the payment to Mecca;
(f) THE benefit received by trustee Poiya was improper and the commission recommends that he be referred to the Ombudsman to consider whether there had been a breach of the Leadership Code by Mr Poiya; and
(g) The benefit received by Mr O’Neill was improper and at the time he was subject to the Leadership Code, being executive director of Finance Pacific.
The commission recommends that Mr O’Neill be referred to the Ombudsman Commission to consider whether there has been a breach of the Leadership Code.
The payments made to Williams Graham & Carman were: See table 1.
The commission finds that all these payments were from NPF Tower fraud money and all were paid to the lawyers in relation to the purchase by Bethgold of the Kanimlba property. The K50,000.00 to Cheryl Caley on May 4, 1999 was from the same source and for the same purpose.
Although Mr Barker and Mr Sullivan are shown as the directors and shareholders of Bethgold Mr Maladina and/or Mr O’Neill had beneficial interests in that company held for him/them by Mr Barker and Mr Sullivan.
The commission’s investigations clearly showed the criminal activities of Mr Barker and Mr Sullivan, former PMFNRE managers who had fled to Australia. At paragraph 12.3.4.1, the commission has found:
(a) Both Mr Sullivan and Mr Barker were involved in the laundering and disposal of the proceeds of the NPF Tower fraud through the PMFNRE No.1 Trust Account and the use of a code in that process strongly suggests “guilty” knowledge which may render both men accessories after the fact to that fraud;
(b) The commission recommended that Mr Sullivan and Mr Barker both be referred to the Commissioner for Police to consider charges for aiding the offence of fraud and any other offences;
(c) The commission also considered that Mr Barker:
(i) LIED on oath regarding the refund of K99,000 to Mr Maladina;
(ii) falsely denied knowledge of payments of K102,300 and K300,000 made by Mr Maladina to PMFNRE No.1 Trust Account; and
(iii) falsely stated that K60,000 and K690,000 were used to purchase Treasury Bills (see paragraph 12.3.4).
As Mr Barker is now permanently residing in Australia it would be a waste of resources to refer him to the Commissioner for Police to consider charging him with perjury under the Commissions of Inquiry Act. If he ever returns to PNG, he should be so referred.
As the commission’s inquiries continued it became clear that many payments were made to or at the direction of Mr O’Neill, that these payments far exceeded the total funds legitimately held by PMFNRE and that a significant portion of these additional payments were sourced from funds which demonstrably were the proceeds of the NPF Tower fraud.
In trying to explain these matters, some of Mr O’Neill’s explanations were unacceptable, internally inconsistent and contrary to clearly documented factual evidence. As inquiries progressed further and the successive ledgers were examined in more detail it became clear that Ledgers 18 and 31 were Mr O’Neill’s own ledgers.
At the end of the day the commission was forced to conclude that Mr O’Neill actually owned PMFNRE.
To test Mr O’Neill’s unsatisfactory evidence, the commission constructed an extension of the cashbook as at paragraph 12.3.6 as follows:
The reconstructed extension of cashbook from May 30, 1999 to September 29, 1999. See table 2.
It was then able to make the following further findings.
Findings
This deposit of K10,833.33 was in respect of Mr O’Neill’s rental allowance for June 1999;
* At paragraph 12.3.7.2, the commission found that:
(a) The two cheques for K55,120 and K920 account exactly for the proceeds of the Nambawan Finance cheque for K56,040 banked the previous day and the commission so finds;
(b) The receipt of K55,120 into the No.2 Trust Account was kept “off book”;
* At paragraph 12.3.7.4, the commission found that:
The cheque #028585 for K275,000.00 obtained by Hunter Real Estate Limited was proceeds of funds paid out of IBD held by the Registrar of the National Court, which was the subject of litigation between Mr O’Neill and Mr and Mrs Donald.
* At paragraph 12.3.7.5, the commission found that:
The deposit was in respect of Mr O’Neill’s rental allowance for July 1999;
* At paragraph 12.3.7.6, the commission found that:
The deposit of K275,000 into PMFNRE No.1 Trust Account on July 16, 1999, was paid into the No.2 Trust Account in three separate cheques and receipted as a deposit on PMFNRE sale of property by Hunter Real Estate.
The evidence of Mr O’Neill’s involvement with regard to the No.1 Trust Account is discussed at paragraph 12.3.8 and it is clear that the only funds paid into or held in the No.1 Trust Account for Mr O’Neill aggregated K32,449.99 or on the view most favourable to Mr O’Neill the total would be K57,499.99. Yet quite clearly the sum of at least K167,397.11 was paid out for his benefit or at his direction.
At paragraph 12.3.8.1, the commission has found that:
(a) Given the above explanation, the commission is compelled to conclude that the source of the differentials was Mr Maladina’s funds from the NPF Tower fraud and the explanation given by Mr O’Neill does not withstand testing and cannot be accepted.
(Mr O’Neill’s explanation is further reported below at paragraph 12.3.8.2).
(b) The PMFNRE No.1 Trust Account appears to have been treated as a common account containing the funds of Mr Maladina and Mr O’Neill and some other transactions.
Mr O’Neill’s explanations included claims that some of the payments were sourced from or paid as rental on his properties but his claim did not withstand scrutiny as other arrangements for rent were actually in place as recorded in detail in paragraph 12.3.8.3 of the Schedule.

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Paki’s departure from PNGDP/OTML is a good thing Mekere!

October 4, 2013 2 comments

Is the government’s grab for PNGSDP/OTML a good thing? Its hard to say. What about the departure of Rex Paki from its Board of Directors? To this we can issue a much more definitive yes. While Sir Mekere Morauta may have slammed his replacement by Isaac Lupari, Papua New Guineans should breathe a sigh of relief.

In October 2012 PNGexposed raised serious concerns about Paki’s position on the board following the release of a report on the Paga Hill demolition by the International State Crime Initiative. For our efforts, we were slammed by Transparency International PNG Chairman, Lawrence Stephens, who is also a senior manager at PNGSDP.

He claimed:

“Come on oh nameless ones! Take some deep breaths and ask yourselves if you are really prepared to publicly defend the rights of Papua New Guineans and if it is really necessary for you to throw stones from the shelter of annoninimity. Much as you might like to claim the oppositie there is nothing astonishing in any loyal Papua New Guinean seeing the difference between accusations and convictions. Shame on you, whoever you are”.

The irony is we have men like Stephens and Morautu being held up in the international media as anti-corruption warriors, but what did they do about Rex Paki for all these years?

For those unfamiliar with Paki’s past, here is our original post from 2012:

Over the past 20 years Paki has appeared before two Commission of Inquiries (Finance Department and National Provident Fund), two Public Account Committee Inquiries, and a Supreme Court case where he was slammed by the full court.

Paki was intimately involved in the Paga Hill development in Port Moresby between 1997-2000, a development which has recently been making headlines for forced evictions and corrupt property deals – link.

In January 2004 the Public Accounts Committee reprimanded Paki’s company Ram Business Consultants (RAM) for issuing an “empty cheque” to the Accountants Registration Board, and then “practicing without … formal registration”.

Two years later in a separate investigation – which Paki attempted to block – the PAC found that over an 18 month period (1998-2000) the Public Curator’s Office had paid RAM K1,561,062 (approx US$640,000), without the existence of a contract, proper invoices, or evidence that any work had been done.

Two Commission of Inquiries (COI) also found reason to censure RAM. Following its first appearance, RAM was accused by the COI of receiving “improper benefits” and charging clients “excessive” fees; in the firm’s second appearance, the COI found that RAM had substantially inflated a cash-flow projection, so a prominent client could amplify his damages claim against the state.

In light of these PAC/COI findings, it is perhaps not surprising that most recently in an appearance before the Supreme Court, Salika DCJ, Gabi J and Hartshorn J, described Rex Paki as “evasive and dishonest”, following Paki’s extraordinary efforts to frustrate the process of discovery (Paki was being sued for allegedly overpaying himself as liquidator of Motor Vehicle Insurance Ltd).

Those interested can access the original story in full here:

A second article by Dr Kristian Lasslett:

The debate with Transparency International PNG can be viewed here:

PM O’Neill and his new Ports boss have a sordid past

May 20, 2013 8 comments

Corruption is a word writ large over the relationship between PNG Prime Minister Peter O’Neill and his newly appointed Chairman of PNG Ports, Nathaniel Poya ( or Polya).

Poya took up his new role in February this year despite a history of corruption, failed businesses, debts and conflicts of interest.

O’Neill and Poya’s role in the NPF scandal

O’Neill and Poya first came to attention in the investigation into the huge National Provident Fund corruption scandal.

The Commission of Inquiry, headed by retired Justice Tos Barnett,  revealed O’Neill and Poya jointly owned a company named Mecca (No.36) which received large illegal payments from the National Provident Fund.

At that time Poya was both a trustee of NPF and a director and shareholder of Mecca.

The Commission found that on 17 May 1999, K100,000 derived from the NPF Tower fraud was deposited into the account of Mecca (no.36) and “that such money was not earned”.

The Commission of Inquiry recommended both O’Neill and Poya be referred to the Ombudsman Commission for potential breach of the Leadership Code:

(e) MR Poiya and Mr O’Neill benefited from the payment to Mecca;
(f) THE benefit received by trustee Poiya was improper and the commission recommends that he be referred to the Ombudsman to consider whether there had been a breach of the Leadership Code by Mr Poiya; and
(g) The benefit received by Mr O’Neill was improper and at the time he was subject to the Leadership Code, being executive director of Finance Pacific.

In addition the Commission of Inquiry found O’Neill also benefited from and ordered many other corrupt payments involving NPF Tower fraud proceeds. A further K50,000 from the NPF fraud was paid to O’Neill’s former wife, Cheryl Caley

The Commission also stated:

Mr O’Neill’s explanations were unacceptable, internally inconsistent and contrary to clearly documented factual evidence

Poya not a fit and proper person to head PNG Ports

Nathaniel Poya is also not a fit and proper person to head any public corporation or government department because of some of his other business dealings.

Poya was a shareholder and director in Voco Point Trading Ltd when it went into liquidation in 2004 owing K3.9 million to 89 creditors including Bank of South Pacific.

In a subsequent legal case, National Court judge Justice Gabi was highly critical of the company’s failure to pay taxes or file tax returns for a number of years, conduct the judge described as “contrary to corporate morality or public interest”. [OS 291 of 2007, Poya -v- Paki at para 15]

Conflicts of Interest

O’Neill is also wrong to appoint Poya to Chair PNG Ports, as Poya is alleged to have a clear conflict of interest.

Mr Poya it is claimed has his own stevedoring business, PNG National Stevedoring. In this role Poya previously took the Minister for Transport to court for not awarding his company lucrative ports contracts; a court case that Poya subsequently lost.

O’Neill himself is also in a conflict of interest situation in this matter as Mr Poya, according to MP Sam Basil, is also a relative of the Prime Minister. [Post Courier 10 May 2013]

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