PNG Court Suspends Jail Term For Former Provident Chairman

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Repayment of fraud gains key in suspension of sentence

By Charles Moi

PORT MORESBY, Papua New Guinea (The National, August 14, 2015) – The National Court has suspended an eight-year jail term it imposed on former National Provident Fund chairman Jimmy Maladina on fraud charges, and placed him on a two-year good behaviour bond.

Deputy Chief Justice Sir Gibbs Salika convicted Maladina in May on one count of conspiracy to defraud the NPF (now Nasfund) of K2.65 [US$929,000] between November 1, 1998, and October 10, 2000, and one count of misappropriation of the superannuation funds between February 26, 1999 and July 30, 1999.

Sir Gibbs imposed a sentence of six years on the first count and eight years on the second count, to be served concurrently.

Sir Gibbs explained in his 28-page ruling that the suspension of the eight-year jail term was because Maladina had repaid more than the K2.65m [US$929,000] taken.

He also took into account the long delay to have the matter tried, which denied Maladina’s "constitutional right to a trial within a reasonable time".

"The State had a primary role to expedite his trial," Sir Gibb said.

He also noted that Maladina "will no longer be able to practice law ever again", and "will suffer in that he will have to find other ways to survive".

Sir Gibbs said a pre-sentence report by current Nasfund chief executive officer Ian Tauritia stated that the organisation had since flourished from K1.24 million [US$434,000] to K3.8 billion [US$1,331,510,000] "making (Maladina’s court) case look stale and of little consequence".

Maladina made full restitution on July 24 and had sold his assets in Australia worth AUD$500,000 [US$368,000] which was paid to National Superannuation Fund (Nasfund).

Sir Gibbs also pointed out that others involved in the fraud were never charged.

"I think the prisoner (Maladina) has learnt a valuable lesson from this case, is not likely to re-offend and is not a danger to society," Sir Gibbs said.

Maladina, 49, from Mena’ala village in Esa’ala, Milne Bay, elected to remain silent during the proceeding.

A lawyer by profession, he is married and has four children now living and studying in Australia.

The State accused Maladina of conspiring with others to defraud the fund of K2.65 million by fraudulently increasing the construction costs of the NPF tower in Port Moresby.

It also accused Maladina of dishonestly applying to his own use and to the use of others K2.65m belonging to the fund.

The court found that Maladina and others agreed that construction company Kumagai Gumi, contracted to build a tower, to falsely charge an extra K2.65 million as "further accelerated fees" on top of the agreed construction cost of the tower of K50 million [US$17,520,000].

Maladina used K400,000 [US$140,000] of the K2.65 million, according to the court’s assessment of the evidence.

Sir Gibbs said: "The court must continue to send out a stern message to deter those in positions of trust from abusing and manipulating the systems to benefit themselves and their cronies.

"This case calls for a stern punitive and deterrent sentence to serve as a clear warning to trustees and board chairmen looking after superannuation funds that high standards of integrity and honesty are expected from and of them."

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