PAPUA NEW GUINEA INVESTMENT AGENCY UNDER PROBE

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By Robert Palme

PORT MORESBY, Papua New Guinea (The National, March 30) – The Papua New Guinea government has appointed a Commission of Inquiry to investigate the operations of the Investment Corporation of PNG (now Pacific Balance Fund) and Pacific Property Trust.

[PIR editor’s note: According to another story in The National, former PNG Member of Parliament Alfred Kaiabe, who was appointed chairman of the Securities Commission this year, allegedly directed the payment of PGK856,657 by the trustees to the fund managers of the former Investment Corporation of PNG. The direction was allegedly given to Melanesian Trustee Services Limited (MTSL) by Kaiabe nine days after his appointment as chairman. The money was to be paid to Pacific Equities and Investments Limited. ]

Justice Don Sawong will head the commission, which includes senior counsel Molean Kilepak, accountant Sir Makena Geno and investigator Daniel Kapi.

The Government has directed the Finance Department to set aside PGK2.5 million [US$863,790] for the investigation.

Pacific Balance Fund and Pacific Property Trust are both funds owned by unit holders and managed by Pacific Equities and Investment Limited.

The Government has also ordered the Foreign Affairs Department to remove Mr John Sanday, a director and major shareholder of Melanesian Trustee Services Ltd (MTSL), from the visa warning list to allow him to return to the country to help in the investigation.

MTSL is the trustee of Pacific Balance Fund (PBF).

The Government wants the commission to look into the decision to convert Investment Corporation of PNG (ICPNG) from a statutory unit trust to a commercial unit trust to determine if it was necessary. It also wants the commission to determine whether MTSL, as the trustee, could write off a significant portion - PGK37 million [US$12.7 million] - of the unit-holders’ funds or investment.

In addition, the commission is to establish:

March 31, 2006

The National: www.thenational.com.pg/

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