NDB CHAIRMAN'S K40-K50 MILLION CONFLICT OF INTEREST

 

by M.J.PASSINGAN

The Prime Minister and Minister responsible Hon Duma as trustees of our State Enterprises must come out clean on what is happening at the National Development Bank.

Sources reveal that the NDB Board Chairman, Mr. Seeto is a beneficiary of a large contract from KCH involving one of NDB's subsidiaries, People's Micro Bank Limited (PMBL).

The Marape Government through its Minister responsible, Hon. Duma recently announced the approval of a new banking entity which will be created from the commercialization of PMBL. What was not announced was Mr. Seeto will be featuring heavily in implementing this with a contract of 40-50 million kina.

Mr. Darrell Seeto has been perfectly set up in a dream job. 

He will oversee the commercialization of PMBL as Chairman of the NDB Board and a service provider in what is a clear example of blatant abuse of power and fiducial responsibility.

Sources also indicate that the NDB Board is highly comprised, and its Chairman is "running everything". The governing legislation of the National Development Bank does not allow for Directors to be involved in the daily operations of the Bank and its subsidiaries.

By what or whose authority has Mr. Darrell Seeto positioned himself as a self-styled Board Chairman with Managing Director powers and also now a service provider?

The wisdom and intent behind the creation of our SOE were exactly for this. Preventing such cronies from exerting too much power over the operations of our SOEs.

By definition, Directors must be independent and must have no interest in a company or it's subsidiaries. 

The NDB Act does not allow for Mr. Seeto to be a member of the NDB Board when he has such a conflict of interest, or whilst he provides services (other than being a director) to a subsidiary of the NDB Group, in People's Micro Bank Limited? 

Section 10(b), (c) & (d) of the NDB Act unequivocally disqualifies a person from being eligible to be appointed as a member of the NDB Board if that person:

- is a supplier of the Bank or a subsidiary (e.g PMBL);

- has a contract with the Bank or a subsidiary, other than being a director; 

- is not free from interests that could, or could reasonably be perceived to, materially interfere with the director’s ability to act in the best interests of the Bank. 

Hence, it is not only improper but against the NDB Act for Mr. Seeto to be a director of the NDB Board, while he is a contractor of PMBL or has an interest in PMBL that could hinder him from acting only in the best interest of NDB and it's subsidiary, People's Micro Bank.

When the Government is talking about anti-corruption and performance, why has Marape Government allowed the Chairman of NDB to get this contract? The PM and his Minister Duma must come out clear.

Is commercialization another milking cow used to siphon money with the use of proxies?

This is nothing against the credentials of Mr. Seeto. He simply cannot remain as Chairman of the NDB Board when he is also contracted to commercialize it's subsidiary PMBL. There is too much room for compromise.

Important life-touching and changing SME policy of the government is run by NDB. Why is this being destroyed by cronies?

Fiduciary duties owed to any SOE by its Directors include; Duty to act within his or her powers. Duty not to improperly use insider information or position. Duty to avoid a conflict of interest; and Duty not to abuse a corporate opportunity.

The Prime Minister must act now and practice what is being preached.

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