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PORT MORESBY, Papua New Guinea (The National, Sept. 21) – A K20 million (US$6.2 million) claim settled without the knowledge of Attorney General Francis Damem will not be paid out.

Damem has instructed his lawyers to reopen the file and challenge the claim in the National Court.

The claim was made by former members of the Fly River Provincial Assembly when their government was suspended from office in 1992.

Initial investigations show that the former members during then premier Isidore Kaseng’s reign filed a claim for more than K7 million (US$2.1 million) against the State for loss of entitlements during the suspension of the provincial government from October 16, 1992 to October 16, 1994.

They also claimed for compensation following their termination when the new organic law on provincial and local level government came into force a year later, rendering them jobless.

A source close to the investigation said the K7 million claim was beefed up to K20,257,000 and was settled on April 23, 2004 without the knowledge of the Attorney-General, who is the only authority to settle any claims against the State.

It was also discovered that a consent order settling the claim for K20,257,000 was not properly sanctioned, raising questions about the authenticity of the process.

The claim was lodged with the Finance Department to effect the payment, but investigators stepped in on time to stop it.

The source said with instructions from the Attorney General, lawyers are moving quickly to get the courts to stop the payment and to institute proceedings to throw out the claim.

"If there is enough evidence that there was a conspiracy to defraud the State, criminal proceedings will be instituted against those responsible," the source said.

"There are many cases settled through unethical and illegal practices over the years, leaving the State exposed to a lot of liabilities, and we hope to reopen all those files and challenge them. We will seek to recover monies in cases where payments have already been made," the source said.

Attorney General Mr Damem was not available yesterday for comments.

September 22, 2004

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