MRDC Provided "Fake" or No Due Dilligence on Hevilift - Media propaganda by MRDC - Can PM act on his words and sack (wantok) Mano?

 PM UNDER PRESSURE TO ACT
MRDC published a paid Press Release pertaining to the purchase of HeviLift (formerly Regional Air) in both newspapers on the 04th of October 2011. The same information has been published in the Quarterly News Bulletin published by MRDC. I hereby quote one fundamental statement in the press release which is the subject of this letter “... prior to the investment decision, ‘due diligence’ was conducted in Hevilift Limited to purchase half of the shares of that company...”.

The problem with this statement is that it is ‘not true’ and it is a deception posed on the Government and stakeholders to camouflage and put up smokescreen to derail the impending probe recently been ordered by the Prime Minister Peter O’Neill into the alleged mismanagement of landowners’ funds at MRDC. This is media propaganda and a deliberate attempt by MRDC management to divert the attention of the Government and the Prime Minister to derail swift conduct of investigations which has already been sanctioned through the Department of Justice & Attorney General.

No Due Dilligence on HeviLift
As far as documentation on the purchase of Hevilift shares are concerned, there are no reports to date on due diligence, and therefore due diligence was not done for the rushed purchase of Hevilift by MRDC. The purchase was rushed without appropriately involving landowners. Available information shows clearly that instruments of release of funds in millions from subsidiary companies such as Petroleum Resources Kutubu and Petroleum Resources Moran were signed by the Managing Director Augustine Mano and processed at MRDC by himself again, which in this case, should have been approved or consented to by the chairmen of the various boards of the subsidiaries and then forwarded to MRDC board and management to effect the purchase of shares.

The only documents available are reports from two professional companies, Deloitte and Avfas, which are Valuation reports purposely to register assets and to work out market value of the Hevilift Company. In this valuation reports, both Deloitte and Avfas clearly and separately stated that their report should not be taken as due diligence report, whilst at the same time recommended for ‘due diligence’ to be conducted should a purchase be made. The report further shows that Hevilift relies entirely on commercial bank borrowings and cannot support its operations alone due to problems associated with cash flow and debts. In addition, Avfas Australia only recommended for the purchase of Australian operations which appear viable and not other operations in Asia, etc.

I quote from valuation assessment done by Avfas Australia on p.6 “---Hevilift is currently funded by commercial banks ...on a short term loan profile. Funding long term assets on this basis is likely to lead to “cash strain” .... When major aircraft refurbishment or component costs need to be met, or if aircraft come off of contract and are not quickly placed into new contracts. .. Due diligence procedures need to take into account near term cash requirements.....I would recommend purchase of shares in Australian operations..”.

I further quote from Deloitte’s Valuation report on p.9, ..” Deloitte would strongly recommend that a detailed ‘due diligence’ is performed on Hevilift’s business before making any firm commitments to acquire part of the business. (We further) recommend that a detailed due diligence be carried out due to the size and complexity of the potential investment.”

The point stressed here is that MRDC Management has been misleading the landowners and the Government by making falsified and fabricated information on Hevilift investment and other socalled investments conducted using millions of landowner and state funds.

I would like to call on Deloitte and Avfas as professional companies to confirm if they have provided detailed due diligence work to MRDC Management on the purchase of Hevilift. If they have, cost benefit analysis and risk factors have not been considered.

I can only support the move made by the Prime Minister Peter O’Neill to thoroughly investigate MRDC management and if need be, apply the ‘Proceeds of Crime Act’ to return to the landowners what is rightfully theirs. 

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