PNG DEVELOPMENT BANK PROBE COMPLETED

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By Baeau Tai

PORT MORESBY, Papua New Guinea (The National, July 22) - An investigation into the current financial crisis facing Papua New Guinea’s Rural Development Bank (RDB) was completed and a report was sent to the Independent Public Business Corp.

Price Waterhouse Coopers said yesterday the probe, which started last month, was completed on July 9.

However, the audit group was unable to disclose the investigation findings.

IPBC will submit the report to the National Executive Council for deliberation.

The National Government in a major shakeup of the RDB board and management appointed a new board headed by IPBC managing director Masket Iangalio.

The Agriculture and Livestock Minister Mathew Siune suspended Andrew Nagari as managing director of the RDB and appointed Richard Maru as acting managing director.

Last month the new board engaged Price Waterhouse Coopers to investigate RDB to establish the root cause of RDB’s financial problems.

RDB is currently undergoing a "major aggressive recovery effort" to recoup millions of unpaid loans.

RDB’s current loan book has debts over K140 million (US$43.4 million) and is currently spending up to K10 million (US$3.1 million) a year on operational overheads like salaries and wages.

Maru said they are tendering a lot of plantations and properties now and will be issuing statutory notices to companies who owe them money.

"If they don’t pay up we will take bankruptcy proceedings against them," he said. This is a major aggressive recovery effort and more tenders are coming up later," he added.

RDB has taken out several advertisements; most of them for mortgage sale of huge plantations and other RDB funded properties.

Among the plantations on tender are Vunabukubuk plantation in East New Britain, Sipil Coffee plantation in Western Highlands province, Akwitana coffee plantation in Kainantu and Matukar plantation on Karkar Island, Madang province.

The Vunabukubuk plantation is a 119-hectare agriculture lease in the Gazelle area of which 115 hectares were planted to hybrid coconut and inter-cropped with hybrid cocoa.

The property includes cocoa and copra dryers, office, shed, manager’s residence and furniture, laborer quarters, plant and equipment and motor vehicles.

The Matukar plantation is a 363.28-hectare agriculture lease of which 89.10 hectares were planted to mixed hybrid coconuts, inter-cropped with hybrid cocoa. The property also has a hectare of vanilla trees, 10 box fermentary, a new cocoa dryer, a kiln dryer and two copra dryers.

An RDB officer said this is a normal bank procedure and the head office is putting it on branches where the plantations are located.

Potential bidders are to put their tender applications at their nearest RDB branch, which will then forward the papers to the Legal and Loans Recovery Division at the RDB Waigani headquarters.

It is understood the Government has set a target to recover outstanding loan payments so that the bank can start lending to plantations that are viable.

July 23, 2004

The National: www.thenational.com.pg/

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