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Losses at Natadola Bay Resorts project cited

By Elenoa Baselala SUVA, Fiji (Fiji Times, May 6, 2010) - THE Fiji National Provident Fund yesterday declared that it was writing off $327million [US$ 168.4 million] in members' funds.

Trade, Commerce and Tourism ministries' head Aiyaz Sayed-Khaiyum said the move was necessary to show the true value FNPF's assets, something auditors of the Trust had been highlighting from as early as 2005.

Effectively "this means that 9 per cent of the total members' funds has been written off" for the 2009 year, he said.

Mr Sayed-Khaiyum said that forensic accountants from Australia, Deloitte, had been recruited to carry out various investigations and that those responsible would be prosecuted.

Deloitte was expected to highlight where the culpability lay, he said, which could involve criminal, civil or management action.

"It will ensure that any financial decisions that are made now will be made on true value of the assets, which essentially ensures that the members' funds are protected a lot better," Mr Saiyed-Khaiyum. This is a move to correct the past."

Mr Saiyed-Khaiyum said "after the write-off the total value of the members' assets now stands at $3.2billion".

The vast chunk of the write-off - which will form part of FNPF's 2009 accounts - came from its flagship development, the Natadola Bay Resorts Development, where a whopping $301million had to be wiped away. "The write-off of $327m is made up of $301m Natadola, $18m from Momi and the balance being contributed from projects such as the Malthouse Brewery, Savusavu Marina, Bayview Hospital, GPH (Grand Pacific Hotel) and the Fiji Hardwood Corporation," Mr Saiyed-Khaiyum said.

FNPF's investments in Natadola, Momi, Malthouse Brewery, Savusavu Marina, Bayview Hospital, GPH and Fiji Hardwood Corporation were entered into after the Laisenia Qarase government passed an Act through Parliament which allowed the FNPF to invest in projects that might carry more risk than Trust Funds were normally allowed to invest in (See Page 3 for chronology of events).

The country's last big financial debacle was the National Bank of Fiji crisis, which came to light in 1995, where there was $220million in bad or doubtful debts, making up around 8 per cent of Fiji's GDP at the time.

"FNPF and management has already set in place a number of controls and reforms that are necessary and indeed should have been put in place years ago to protect the members funds," Mr Saiyed-Khaiyum said.

"These controls and reforms also include adherence to international accounting standards and working together with various Singaporean authorities and agencies. Government was obviously aware of some of these issues in FNPF and has been very closely working with FNPF in particular for the past few months.

"Government notes that with the proper accounts now in place, it means that FNPF will now be on a good footing to be able to secure and protect all the funds of its members. From government's perspective, you can be rest assured that we're working behind the scenes with FNPF to ensure there is stability in the market and all our members funds are protected in a stable environment."

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