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MELBOURNE, Australia (Radio Australia, Sept. 6) – The Nauru Government says it has been ordered by the Australian Federal Court to attend a mediation hearing on Wednesday.

The move is in relation to legal action between it and the Australian company, Business Australia Corporate Finance, BACF, which claims Nauru owes it A$23 million.

The new Government in Nauru, meanwhile, has fired former President Kinza Clodumar as chairman of Air Nauru, saying he has sided with BACF in the litigation:

BACF was commissioned by the former Government in Nauru to try to put together a rescue package that would have saved Nauru from having all its Australian properties repossessed by America's GE Capital Corporation.

The Nauru Government admits BACF lent Nauru $2.7 million but it claims BACF failed to raise any money to refinance the GE loan.

In a statement to the Nauru Parliament at the weekend, the Minister responsible for Nauru's Trust Funds, Fabian Ribuaw, described BACF's $23 million claim against Nauru as outrageous.

He said the Australian Federal Court had ordered mediation on Wednesday before Sir Lawrence Street as mediator.

Mr Ribuaw told the Parliament BACF had put forward Kinza Clodumar's name as the person who would appear for the company in the mediation.

He accused Mr Clodumar of making Nauru an object of international derision and ridicule.

Meanwhile the Nauru Government has sacked Clodumar, a former Nauru president, from chairing Air Nauru, accusing him of siding with an Australian company in litigation against Nauru.

The Minister responsible for Nauru's troubled Trust Funds has told the Nauru Parliament that Kinza Clodumar as aligned himself with the company, BACF, which claims Nauru owes it A$23million.

In a Ministerial Statement to a special weekend session of the Nauru Parliament, the Minister for Trusts, Fabian Ribuaw, said the former Nauru Government had engaged BACF to refinance the debt that has led to the repossession of Nauru's Australian property assets.

Mr Ribuaw said BACF had failed to raise a single dollar towards the required repayment of GE Capital but it had taken out caveats against the properties which had prevented any other refinancing deal.

He said Nauru did not deny BACF had lent it money but he described the $23 million claim as outrageous.

Mr Ribuaw said the Australian Federal Court had ordered mediation this coming week and BACF had put forward Kinza Clodumar's name as the one who would be negotiating for them.

Mr Ribuaw accused Mr Clodumar of wanting to feather his own nest while Nauru's nest was left empty.

September 6, 2004

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