PNG Police Chief Manning refutes claims by Namah on Western Province peoples’ money case

 The Papua New Guinea  Commissioner of Police David Manning has refuted claims by Opposition Leader Belden Namah that the investigation into the alleged theft of K268 million belonging to the 148,000 people of OK Tedi mine affected areas is politically motivated.

Mr Manning said there are allegations that significant funds have been expended by “trustees” with no evidence of benefits to the beneficiaries. The Trust Funds rightfully belong to the 148,000-plus people from 158 villages located in the communities along the Fly River corridor in the Western Province.

PNG Police Chief Manning refutes claims by Namah on Western Province peoples’ money case

“That is what the police through the Special Police Forensic Criminal Investigation team is investigating. That is all I can for now as the matter is now before the court and we will address the allegations raised by Mr Nama in court,” Mr Manning said.

Investigation continues

Meanwhile Mr Manning said the Special Police Forensic Criminal Investigation Team’s (SPFCIT) combined forensic and criminal investigation into the alleged misappropriation and stealing of K268 million perpetrated by management, directors, and lawyers of a purported entity called Ok Tedi Fly River Development Foundation Limited (OTFRDF) is on-going.

SPFCIT, which is headed by the Commissioner, began the high-profile investigation more than ten (10) months ago.

The alleged financial crime is the single biggest fraud that has ever been investigated by Police in the history of Royal Papua New Guinea Constabulary (RPNGC). SPFCIT aims to expose the alleged fraudsters, bring them to justice, recoup the monies that have been misappropriated and stolen, and implement measures to prevent reoccurrence of such white-collar crimes in future.

The K268 million alleged to be misappropriated and stolen by the management, directors and lawyers of OTFRDF are part of Western Province People’s Dividends Community Mine Continuation Agreement (WPPD CMCA) Trust Funds held with Australia and New Zealand Banking Group (PNG) Limited.

The Trust Funds belong to the 148,000-plus people from 158 villages located in the CMCA Communities along the Fly River Corridor in Western Province.

The WPPD CMCA Trust Funds were received as dividends paid by Ok Tedi Mining Limited between the financial years 2007 and 2014 based on a five per cent equity held in the Ok Tedi Mining Project. The monies were captured in the WPPD CMCA Trust Account held with the ANZ Bank.

The five per cent stake in the Ok Tedi Mining Project was allocated to the people of CMCA Communities in Western Province following the outcome of 2006/2007 CMCA Review. The equity funds were specifically set aside to deliver ‘authorised projects’ to the people of the CMCA Communities.

Pursuant to Section 15 of the Public Finances Management Act 1995, Minister for Finance then the Hon. John Hickey, MP, drew up a Trust Instrument and established a Trust Account called WPPD CMCA Trust Account with ANZ Bank to receive and save the dividends paid based on a five per cent stake held in the Ok Tedi Mining Project.

The various legislative obligations surrounding the use of WPPD CMCA Trust Funds were enshrined in the original Trust Instrument approved by the then Finance Minister.

Prior to the withdrawals the WPPD CMCA Trust Account had a balance of K278,278,958.40. After the withdrawals, only K10,620,735.42 remained as of November 30, 2020.

Police alleges withdrawals not authorised

In summary, SPFCIT established that withdrawals of K268 million made from WPPD CMCA Trust Account held with ANZ Bank were:

• Not consistent with the original purpose of the WPPD CMCA Trust Funds to implement development projects and programs to benefit the people from the Western Province, and the CMCA Region more particularly, as specified in the Mining (Ok Tedi Restated Eight Supplemental Agreement) Act 1995 (8th Supplemental Agreement Act);

• Not authorized by the Minister for Mining as specified in the 8th Supplemental Agreement Act;

• Not endorsed or the subject of consultation with the Western Province Provincial Government as specified in the 8th Supplemental Agreement Act; and

• Not paid to Ok Tedi Development Foundation which is the exclusive service delivery vehicle contemplated by the Ok Tedi Mine Continuation (9th Supplemental Agreement) Act 2001 (9th Supplemental Agreement Act).

Police ascertained with compelling evidence that management, directors, and lawyers of OTFRDF knowingly accessed the WPPD CMCA Trust Funds which have been set aside specifically to fund and implement development projects and programs in the CMCA Communities and misappropriated and stole them.

Arrests

In connection with the progress of the investigation, SPFCIT arrested and charged Gregory James Sheppard of Young & Williams Lawyers, and three directors of OTFRDF namely Eda Oai, Annie Smerewai and Boston Kassiman. Sheppard has been charged with two counts of money laundering, two counts of misappropriation, two counts of conspiracy and two other charges of false pretense.

Sheppard has been slapped with a total of eight charges. Oai, Smerewai and Kassiman have been charged with five counts of misappropriation, five counts of false pretense and other five counts of conspiracy. Each of the three directors were charged with a total of 15 counts.

Sheppard, Oai, Smerewai and Kassiman were arraigned and they are currently facing their charges in the Committal Court.

Police have not been able to arrest and charge the Chief Executive Officer of OTFRDF Samson Jubi and other directors of OTFRDF as they have evaded police and gone into hiding.

SPFCIT also noted that Sheppard transferred K30 million from the proceeds of K52 million into Young & Williams Lawyers’ other Trust Account held with Westpac Bank PNG Limited (Westpac Bank).

Singapore connection

Police obtained a Court Order to search the law firm’s trust account held with Westpac Bank but Sheppard successfully obtained an interim court order, and Police has not been able to establish how the defendant exhausted the K30 million which is a significant portion of the K52 million. Police strongly believe that the monies contained in the Westpac Bank trust account have been unlawfully depleted for unrelated, unauthorised purposes.

Based on an independent Intelligence product received through the Office of Commissioner of Police, SPFCIT confidently established that Gregory James Sheppard transferred total of K21 million from its Trust Account held with Westpac Bank through International Electronic Funds Transfer (IETF) in various amounts between 25 February 2020 and 5 May 2020, to another law firm named as TSMP Law Corporation based in Singapore. All payments made to TSM Law Corporation were identified as legal fees.

Police have already made contact with the Government of Singapore and its relevant authorities to ascertain how K21 million of the WPPD CMCA Trusts paid to TSN Law Corporation were expended and who benefited from it.

Police are also in the process of calling in Sheppard and Jubi to explain why part of WPPD CMCA Trust Funds that have been set aside to specifically fund and implement development projects and programs in the CMCA Communities were used to pay unrelated expenditures such as legal fees.

Police hand-up briefs

SPFCIT has completed the Police Hand-Up Briefs in relation to the charges for Sheppard, Oai, Smerewai, Kassiman. These were submitted to the Committal Court. A copy of the Police Hand-Up Brief was given to each of the four defendants. The Police Prosecutor taking carriage of the four cases was also served with copies.

Whilst submitting the Police Hand-Up Briefs, SPFCIT requested the District Court to expedite the hearing for the four defendants within a reasonable period of time and commit them to stand trial in the National Court on the basis that strong overwhelming evidence exist against the offences that were committed by each of the four defendants.

Statement

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