Long Running PNG Fraud Case Ends In Supreme Court Acquittal

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Pacific Islands Development Program, East-West Center With Support From Center for Pacific Islands Studies, University of Hawai‘i

Former National Provident Fund Chairman Maladina cleared

By Daisy Pakawa

PORT MORESBY, Papua New Guinea (PNG Post-Courier, April 21, 2016) – The Supreme Court yesterday acquitted Jimmy Maladina of two charges - conspiracy to defraud the National Provident Fund of K2.65 million and the misappropriation of K400,000 [US$128,000]. Justices Les Gavara-Nanu, Don Sawong and Terrence Higgins agreed that the trial judge, Deputy Chief Justice Sir Gibbs Salika made an error in his judgment last May when he found Mr Maladina guilty of the two charges.

Mr Maladina’s lawyer Greg Sheppard sought draft orders from the court, one of those orders asked that the State repay the $A500,000 [US$390,000] that Mr Maladina had repaid National Superannuation Fund after he was found guilty earlier. The bench told him that was grounds for another case.

Mr Maldina in an email told Post-Courier that he had maintained his innocence since day one and had faith in the PNG court process.

"Many people did not want to listen ... but I said in good time the courts will clear my name. I subjected myself totally to the process and it has come out true to my word that I have held since day one when I was charged - that I was innocent of all the charges."

He said he only regrets that his reputation had suffered immensely.

In May last year the National Court, through Sir Gibbs, found Mr Maladina guilty of the two charges. The charges relate to the National Provident Fund which is now National Superannuation Fund, the biggest private sector superannuation fund.

On the first charge, Mr Maladina, who was then NPF board chairman, was found guilty of conspiring with five others to defraud NPF of K 2.65 million [US$845,000].

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.

Mr 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 [US$16 million].

The further accelerated fee was paid to the contractor 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 Mr Maladina and his fellow conspirators.

On the second charge, Mr Maladina was found guilty of using K400,000 of the K2. 65 million. Mr Maladina repaid $A500,000.

When converted to kina the amount exceeds K1 million which is an overpayment as he was initially found guilty of stealing only K400,000.

In August 13, Justice Salika gave Mr Maladina a eight-year jail sentence which he used the court’s discretion to suspend and replace with a two-year good behaviour bond because Mr Maladina had overpaid his due.

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