PNG Prime Minister Orders Investigation Into Allegations Of Fraudulent Land Deal

Two ministers accused of profiting from 2014 deal to move military forces to new location

MELBOURNE, Australia (Radio Australia, Feb. 2, 2017) – Papua New Guinea's Prime Minister Peter O'Neill has ordered an investigation into allegations two of his senior ministers profited from a fraudulent land deal that will see the relocation of a naval base 10 kilometres inland.

Opposition MP Ben Micah has alleged that state-owned company Kumul Consolidated Holdings paid 46.6 million Kina [US$14.4 million] to a company associated with Public Enterprises Minister William Duma in a deal to acquire the land.

He has alleged Mr Duma and Defence Minister Fabian Pok purchased land they knew would be acquired in the multi-million-dollar deal in 2014.

In 2012 the Papua New Guinean Government passed a resolution to relocate the defence force base out of the city.

"The land is 10 kilometres inland from the sea ... so how do you build a naval base ten kilometres inland in the bush," Mr Micah said on Radio Australia's Pacific Beat program.

Major General Jerry Singirok, a former commander of Papua New Guinea's defence force, said it was inappropriate for the minister of public enterprise to be involved in the relocation of a naval base 10 kilometres inland, and raised serious questions in relation to the decision itself.

"There's nothing wrong with the current naval base, I say this because all the state needed to do was acquire additional land where the existing base is," he said.

Mr O'Neill has frozen an account connected to the deal and ordered Chief Secretary Issac Lupari and Police Commissioner Gari Baki to investigate the matter.

The Prime Minister told Parliament he needed "full information" on the transactions before making any decisions, the Post-Courier newspaper reported.

"So I have to be making sure that I have the right information when I make the right decision. I cannot go around accusing leaders of fraud when I don't have evidence before me," he reportedly said.

[PIR editor’s note: On Feb. 3, 2017 PNG Post-Courier reported that ‘Prime Minister Peter O’Neill has promised to give back portions of the controversial land back to the traditional landowners of Kairuku-Hiri in Central Province. … PM O’Neill said he would give back the land just like he had done to the people of Woodlark Island in Milne Bay Province. … He told Parliament yesterday he has talked with Central Province Governor Kila Haoda and have received the landowners’ petition in relation to the land that was acquired for the relocation of Defence Force military facilities of Taurama Barracks and Lancron-HMPNGS Basilisk naval base.’ The Post-Courier also reported that ‘Duma has maintained that there is no fraud involved in the transaction regarding the payment by Kumul Consolidated Holdings (KCH) and the K46.6 million for Lancron Naval Base. ... Mr Kua said the Minister in his personal explanation to Parliament said he had no direct shareholding in the company, which was confirmed by Registrar of Companies, but can he admit or deny whether he had some indirect association with the company, making him a beneficiary.’ Further reported was that on ‘yesterday afternoon, the Opposition members fronted up at the Ombudsman Commission office at Deloitte Tower, Port Moresby, to refer the matter for investigations under the Leadership Code.’]

But the extent of Mr O'Neill's knowledge of the deal has been brought into question by the publishing of what the website PNGBLOGS claimed was a briefing from the chairman of Kumul Consolidated Holdings that was sent to the Prime Minister weeks ago and exposes the fraud.

Mr Duma was not in Parliament when the allegations were raised.

But he has tabled a dozen supporting documents showing formal processes for the deal he says began in 2012 before he took over the ministerial portfolio.

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