From Business Board.
May 8 2011 at 12:49 PM
No score for this post from Post Courier (no login)
Opposition pushing for answers on the Kokopo loan
THE Government has been urged to come clean on the controversial K125m borrowed from National Superannuation Fund (Nasfund) to finance community projects in Kokopo, East New Britain.
Opposition Deputy leader Bart Philemon said the Government must produce the Cabinet decision that approved the loan and also called on Nasfund management to explain on what basis and on whose request the K125m loan to the government was approved. The Government must justify why the whole nation should carry debts for community projects in one district Kokopo arising from the issuance of this special purpose securities, said Mr Philemon, a former Treasurer and Finance Minister.
Did Prime Minister Sir Michael Somare sign the special purpose securities for this community infrastructure project? Or did Treasurer Peter ONeill sign it? And what role did Department of Treasury play in this deal? His comments follows the return of Kokopo MP and Communications Minister Patrick Tammur from Singapore on Friday where he had gone for medical treatment and the amputation of a leg because of illness. Mr Tammur instigated the proposal for funding by Nasfund as Treasury Bills or short-term loan.
Fundraising initiatives using this process are usually done to help fund the National Budget on projects of national importance. It requires a register of stock for administrative and regulatory purposes usually performed by the Central Bank.
The Opposition wants details on the reasoning behind the selection of Kokopo which, based on the 2000 national census, has a population of 53,000 as opposed to Talasea for example which has a population of 128,000 or others with even higher populations and are less developed.
If Treasury is not involved as the Opposition is led to believe and therefore the Central Bank is not the register of stock which private company is managing this stock and at what cost? What is the basis of selecting this company and who gave the expert advice on it? asked Mr Philemon.
And I repeat again: what justification can the Government give on approving this deal to benefit only one district without Department of Treasurys involvement?
When East New Britain Governor Leo Dion raised this matter, we as Opposition added our voice, but it seems to have fallen on deaf ears.
While extending sympathies to Kokopo MP and Communications Minister Patrick Tammur on the loss of his limb, Mr Philemon added: No national leader can boast about securing that kind of money for his district at the expense of 108 other districts.
That would be adding salt to wound by this unfair gesture.
But the Prime Minister, the Treasurer and Cabinet are responsible for this departure from equality and participation - one of the cornerstones of our sovereign statehood.
Author Kokopo Deal
(no login) Amet advises PM that Nasfund Kokopo deal illegal
No score for this post May 8 2011, 1:01 PM
Kokopos K125m loan null and void
By JONATHAN TANOS
THE controversial K125 million Kokopo Sovereign Community Infrastructure Treasury Bill (SCITB) is null and void and has left members of the NASFUND K70 million short.
Additionally, the State is not obliged to honour the Investment Management Agreement signed with National Capital Limited (NCL) on March 9, 2010, which was appointed issuer, registrar, agent and fund manager for the SCITB.
The K125 million was earmarked to finance Kokopos water and infrastructure development projects. The above were the advice given to the Prime Minister, Sir Michael Somare, by Attorney-General, Sir Arnold Amet, on February 18, 2011.
A copy of Sir Arnolds brief to the Prime Minister included a comprehensive background of how the money was processed plus reference to similar advice against execution of the agreement by Solicitor General, George Minjihau.
Sir Arnold said according to law, raising of finance and expenditure by the State needed approval by Parliament.
This is enforced by a Supreme Court ruling of 1990, and as required under the Public Finance Management Act.
Sir Arnold also said only the Central Bank was to be appointed as manager for such financial arrangements and transactions as required by law.
He advised that NCL was in a conflict of interest situation being Nasfund fund manager from which the K125 million was sourced. My advice is consistent with the State Solicitors rendered to the Department of Treasury on September 14, 2010, which clearly points out the serious lack of compliance with Section 209 and 210 of the Constitution and the Public Finance Management Act, he said. The SCITB transaction is unlawful at the beginning and therefore cannot be enforceable against the State. The implication of this transaction is that there is a loss suffered by members of Nasfund.
Although the State cannot be held liable for such loss because of the illegality of the transaction, it may nonetheless seek to rectify this through measures through appropriations under the national or supplementary budget. On March 29, 2010 Mr Minjihau advised the Department of Treasury not to execute the transaction but to seek Parliaments approval before the Minister could invoke other regulations to effect the sought financing. I am aware that such raising and expenditure of finance was not authorised in the 2010 Appropriation Act, Mr Minjihau said.
(no login) Treasury probes Nasfund Kokopo deal
No score for this post May 8 2011, 1:07 PM
Treasury probes K125m deal
AN official investigation has been ordered into the controversial K125 million Kokopo Sovereign Community Infrastructure Treasury Bill (SCITB).
Although the terms of reference have not been made known, the Department of Treasury has started what is believed to be a high-powered inquiry into how the arrangement had taken place and executed.
In the meantime, however, the private-sector National Superannuation Fund, Nasfund, which will be the focus of the inquiry, said its dealing involving the K125 million SCITB was legal.
Nasfund spokesman told the Post-Courier yesterday it would not relent to suggestions by the Attorney General, Sir Arnold Amets advice to the Prime Minister and Chairman of the National Executive Council (NEC), Sir Michael Somare, that the arrangement was null and void.
Even the State Solicitor George Minjihau had advised such appropriations could only be approved by Parliament.
At this stage, it is a maze of legal advice provided both for the State and Nasfund with both parties countering each other over the lawful execution or otherwise of the project.
A government official said the Treasury Department has launched an investigation which is ongoing and when completed the results will be made public.
It should be completed in a week or so, he said.
A Nasfund press release says former Treasurer Patrick Pruaitch and Planning Minister Paul Tiensten authorised the issue of the Treasury Bills.
It has to be established whether NEC approval was given for this.
Nasfund, however, was adamant that NEC had given approval and did not entertain the argument that Parliament was the sole authoriser for the expenditure or raising of funding for the community projects in Kokopo.
Nasfund maintains that its decision was based on an NEC approval. The Treasury official said of the K125 million, K70 million was already drawn down but there appeared to be no infrastructure development on the ground to show for it thus, prompting calls by East New Britain Governor Leo Dion, early this year for investigations.
It is understood that K55 million of that money was still held in a Westpac Bank account in Port Moresby.
We would caution against any further media and public statements until this independent investigation by the Treasury Department is completed, the official said.
Current Topic - Bart Philemon demands answers about Nasfund Kokopo K125m loan