Notorious PNG Fraudster Receives Eight Year Suspended Sentence

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Maladina misappropriated nearly $1 million from provident fund

By Daisy Pakawa

PORT MORESBY, Papua New Guinea (PNG Post-Courier, Aug. 14, 2015) – Jimmy Maladina is a free man after 11 years of court battle relating to the misappropriation of K2.65 million [US$934,000].

Deputy Chief Justice Sir Gibbs Salika yesterday handed Maladina an eight-year jail sentence which he then used the court’s discretion to suspend and replace with a two-year good behaviour bond.

Three months ago, Sir Gibbs found Maladina, 49, guilty of two charges – conspiracy to defraud and misappropriation of K2.65 million belonging to the National Provident Fund (NPF), the forerunner of private sector superfund, National Superannuation Fund (Nasfund).

On the first charge, Maladina, who was NPF board chairman, was found guilty of conspiring with five others to defraud NPF of K2.65 million.

This was done by fraudulently increasing the construction costs of the NPF Tower at Douglas Street, Port Moresby, between November 1, 1998, and October 10, 2000.

Maladina and the conspirators agreed to charge an extra fee – termed as "further accelerated fees" – on top of the normal cost of building the tower which was contractually agreed at K50 million.

The further accelerated fee of K2.65 million was paid to the contractor that was engaged to build the tower, Kumagai Gumi Limited which paid another conspirator (named) who used his company to launder the money before distributing it to Maladina and his fellow conspirators.

On the second charge, Maladina was found guilty of using K400,000 of that K2.65 million.

He was formally arrested and charged in July 2003.

Sir Gibbs used the court’s discretion to lessen Maladina’s penalty as the K2.65 million was returned to Nasfund in July 24 this year.

The contractor engaged to build the tower, Kumagai, paid Nasfund K3 million in an out of court settlement.

Maladina paid $A500,000. If converted to PNG Kina the amount would exceed K1 million which is an overpayment as he only used K400,000.

Several other people who conspired with him to get the money are yet to be charged.

He appeared before court 95 times and had been on bail in both the District and National Court for more than 12 years.

Mr Maladina was 33 years old at the time of the offences. He was a lawyer admitted to practice law in both PNG and Australia, however, after this fiasco he will not be able to practice law.

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