Prime Minister's Impropriety - Direction for Immediate Payment of K50 Million to Israeli Company

I am a senior officer with PNG Power Limited (PPL) and I seek your understanding that I remain anonymous on the above matter

Attached herewith please find documents on the above transaction which appear to be serious. I view PPL was used as a vehicle to facilitate the payment of KSO million paid to an Israeli company in the pretext of acquiring two generators for Port Moresby and Lae power operations.

It is for the first time a Prime Minister (PM0 has Used PPL to transact a substantial amount of money (K50 million ) using PPL· There were no due diligence, cost benefit analysis, compatibility of technology analysis  and budget and financing arrangements as such are important procedural requirements to making decisions to acquire goods and services. PPL has a comprehensive procurement process in place in acquiring goods and services and it has been long administered by highly qualified staff. There was never a consultation between PM and PPL to acquire the power generators for the two cities.

The PPl Board and the senior management were not  made aware of the transaction. It was a transaction concluded outside of the PPL systems and processes which I believed the PM only used PPL name for his personal gain. As I have full knowledge, PPL has not made a request to the government for the purchase of power generators.

I have done further research and ascertained the K50 million was released on 18 December by cheque No# 004621 to the Bank of PNG (BPNG) as per PM’s instruction of 4th December 2013. There  are warrant authority and cash fnd certificate attached herewith which showed that the K50 million was released to BPNG by Acting Secretary for Treasury Dairi Vele.

I am also astonished to learn that a commercial invoice No# AL3001 was issued to the Independent State of Papua New Guinea by LR Group (Israeli company) for US$20,400,000.00 (K50 million). This is appalling because there is no contract of engagement for services to be rendered by the mentioned foreign company nor there was any services rendered to the state which warranted the invoice.

The document showed that Prime Minister instructed for a transaction to occur between BPNG and Federal Reserve Bank of New York on 20 December 2013 for US$20,400,000.00. The money was transferred via JP Morgan Chase Bank, New York, USA to Bank Leumi CE Israel B.M Tel-Avis Main Branch in the account of LR Group Limited.

This is serious breach of the laws pertaining to application of public monies. In particular the Public (Finance) Management Act which stipulates for strict compliance of the procurement process which was violated. There is also breach of the IPBC Act and Constitution pertaining to the use of people’s money.

Mr Chairman the amount of K50 Million of tax payers money was sent to foreigners. The Government’s normal and prescribed procurement process were not complied. This is absolutely corruption and such act must be investigated and the PM and those involved must be fully investigated and they must face the full force of the law.

I am also wondering on the rationale behind the governments purported assistance for PPL as IPBC board has not approved such transaction as PPL is 100% owned by IPBC. Commercially it would appear that the assets (generators) would be later converted to equity in PPL and IPBC has every right to be involved in such transactions from a shareholder’s perspective.

The above case is far more serious than the convicted leader Paul Tiensten’s case. Mr Tiensten only footnoted for the payment of K10 Million when he was Minister for National Planning. In this case the PM had written to Acting Secretary for Treasury with specific instructions with an intended purpose.

Having had said the above, it is urgent the Taskforce Sweep Team arrest the PM and prosecute him under criminal law for his direct involvement in the transaction.

Yours sincerely



Silent Whistleblower

Instructions from Prime Minister Peter O'Steal

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