Former PNG Provident Fund Chairman Guilty Of Misappropriation

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17-years after crime, Maladina convicted of stealing $950,000

By Samuel Raitano

PORT MORESBY, Papua New Guinea (PNG Post-Courier, May 22, 2015) – After a 17-year wait, the final curtain is about to fall on the National Provident Fund (NPF) saga when its central player – Jimmy Maladina – was found guilty of misappropriating K2.65 million [US$950,000] by the Waigani National Court yesterday.

In a 24-page ruling, Deputy Chief Justice Sir Gibbs Salika likened Maladina’s crime to "money laundering" and "dishonest".

He was chairman of the private sector superfund NPF in 1999 which had since changed its name to Nasfund.

Maladina, from Mena’ala in Esa’ala, Milne Bay Province, was found guilty of one count of conspiring with other persons to defraud NPF by fraudulently increasing the construction costs of the NPF Tower (Deloitte Tower) in downtown Port Moresby.

He was also found guilty of the second charge of dishonestly applying to his own use and of others the same amount.

The conspiracy offence was committed between November 1, 1998, and October 10, 2000, while the second offence took place between February 26 and July 30, 1999.

The alleged conspiracy was that Maladina and others agreed for Kumagai Gumi Limited, engaged to build the NPF Tower, to charge extra fees, termed as "acceleration fees", on top of the contract price of K50 million for the construction.

It was found that from the K2,650,000 alleged acceleration fees, a total of K400,000 was received by Maladina via transactions, described by Sir Gibbs as "money laundering".

On the pretext of obtaining money from Papua New Guinea Banking Corporation for the contract, Kumagai had paid the money to a Ken Yapane, who then paid some to Carter Newell Lawyers, Finance Corporation (FinCorp), Ram Business Consultants, Ulya Real Estates and others, the court heard.

From Carter Newell Lawyers, Maladina got his K400,000 cut, the court heard even though Kumagai and Carter Newell Lawyers had no client-lawyer relationship.

Oral evidence was given by Sir Brown Bai who said he was chairman of the NPF board of trustees in 1998 until he was replaced by Maladina after January 2, 1999.

The decision to appoint Madadina was made the prime minister Bill Skate (deceased), he said.

The court heard that after Maladina was appointed chairman, the questionable deals and transactions started surfacing. Maladina was the managing partner of Carter Newell Lawyers but what the K400,000 payment was for was never established in court.

"I therefore, consider the accused actions as being dishonest in this case.

"Accordingly I find him guilty to the charge of misappropriation of K2 650 000 as well. I note too that the accused through his lawyer has admitted receiving K400,000," Sir Gibbs said.

The State and Maladina’s lawyers are expected to make submissions on his sentencing on June 4.

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