"BLACK STOCK’ CORRUPTION AT LIVESTOCK COMPANY


UNVEILING ‘BLACK STOCK’ CORRUPTION AT LIVESTOCK DEVELOPMENT CORPORATION LIMITED 

This week the Transparency International (TI) PNG launched its report naming PNG at 30th placing out of 100 countries in the world on the Corruption Perception Index. 

TIPNG country chairman, Mr. Peter Aitsi said while there have been some improvements, PNG still has a lot more to do to change the perception as “one of the most corrupt country in the world”. 

Tackling Corruption

Already PNG has adopted a Whistleblower (protection) Act 2020 and had the newly established ICAC (Independent Commission Against Corruption) body additional to existing crime and corruption fighter bodies such as the police Anti-Corruption and Fraud Investigation Directorate and the Ombudsman Commission however, blowing the whistle against corrupt activities in PNG remain a high-risk task where only the brave could stand up and withstand. 

Below is a presentation by one such brave whose report to the police Assistant Commissioner – Crimes has got him arrested and charged two weeks ago by those he reported.    

Dated Tuesday, 8 November, 2022, his report to police serious crimes division reads (parts edited for anonymity): 

 Allegations of Funds Misappropriation against Mr. Terry Koim, Managing Director and Board Members of Livestock Development Corporation Limited.  

I have decided to lay a formal complaint with your good office after observing that the Department of Finance is yet to take the appropriate actions on serious allegations of financial mismanagement by LDC Board and Management. 

The sidelined acting Secretary for DAL, Mr. Stephen Mombi specifically had requested the Department of Finance to place a temporary freeze on the four LDC bank accounts maintained with BSP to stop the continuous abuse of funds and to allow for investigations. 

To date, no actions have been forthcoming from the Department of Finance hence, my complaint to your office. (Refer to Attachment 12). 

Livestock Development Corporation Limited is an important State-Owned Entity (SOE) which receives millions of kina in annual National Government funding in Public Investment Program Funds through the Department of National Planning to lead the livestock industry in the country. 

Despite the millions of kina received, there has not been much tangible development on the ground in livestock development and production in line with the government’s vision and development aspirations. 

Given the foregoing, the following are serious allegations of funds mismanagement within Livestock Development Corporation Limited involving the Board and Management which require your urgent intervention; 

1. K4.3 million Cash Payment 

A total of K4.3 million was paid out in Cash over a 9 months period from November, 2020 to June, 2021 from the Public Investment Program (PIP) Funds received from the Department of National Planning and Monitoring. This type of expenditure by any State-Owned Enterprise is considered highly unusual and strange with increased risk of abuse and theft of cash, taking in to account the magnitude of the cash withdrawal from the bank within a short time frame. It is suspected that there is widespread abuse of cash without being detected in collusion with certain members of BSP employees. 

An example of this type of payment is a cash payment of K195,743.25 carried out on 21/05/2021. This matter had been reported by Chief Internal Auditor of the Department of Agriculture and Livestock and Acting Secretary DAL, Mr. Stephen Mombi to the Department of Finance and National Fraud and Anti-Corruption Directorate. (Refer to Attachment 1). 

2. Fraudulent Purchase of Excavator Machine for K583,000 

K583,000 was paid to UMW Niugini for the purchase of an excavator in July, 2021. This machine had been transported to DAL or LDC Erap Station in Morobe Province. To date, the machine had not been used and remains idle at the Erap Station. Although LDC claimed to have purchased it as a brand new machine, it is now confirmed that the machine had malfunctioned and thus, cannot be operated for the benefit of LDC. 

The reason for the purchase of the excavator is unknown. It is alleged that the Managing Director had collaborated with officers at UMW to acquire a sub-standard machinery its actual value is far less than the amount of K583,000 that was paid at. (Refer to Attachment 2). 

3. Purchase of Cattle for Urimo Cattle Ranch, East Sepik. 

K80,000 was paid by LDC for the purchase of cattle for Urimo Cattle Ranch in Wewak in year 2021. But there are no cattle at the Urimo ranch. To date, the paddock remains empty with no cattle. (Information with LDC). 

4. Illegal Rental Payment for Managing Director, Mr. Terry Koim 

Mr. Terry Koim, was terminated in March of 2014 as Acting Managing Director. When Mr. Koim got re-appointed as Acting Managing Director in year 2020, he used his position to claim for a rental covering April, 2014 to March, 2015 amounting to K30,176.59. The rental bill was paid to a real estate company known as Jairha Boina Property. Records indicate that he was not an employee of LDC during this one-year period as he was already terminated earlier in March 2014. Accordingly, he fraudulently paid this rental he was not entitled to. (Refer to Attachment 3).

5. Project Payment for Wasu Cattle Farm 

A K100,000 was paid to Wasu Cattle Farm Project at Poroma, Southern Highlands Province in year 2021. The funds have been received but no cattle have been purchased by the project proponent.  (Refer to Attachment 4). 

6. Cash Payment for purchase of Cattle from Smallholders at Erap 

K50,000 cash was paid to purchase cattle from small holder farmers at Erap, Morobe Province to restock LDC cattle ranch at Zukuru, EHP in November 2020. To date, the cattle have not reached Zukuru Cattle Ranch. The cash of K50,000 was personally collected by Mr. Terry Koim, and to date, there is no evidence of cattle being purchased for Zukuru Farm. 

LDC accounts staff have confirmed that Mr. Koim had not submitted the acquittals for the use of the K50,000 and other necessary information to confirm purchase of the cattle. (Refer to Attachment 5). 

7. Purchase of Motor Vehicle for John Simon, Former DAL Minister

LDC paid K194,730 to a company known as Special Vehicle Imports PNG LTD for the import of a vehicle from Australia in year 2021. The vehicle was purchased for Hon. John Simon, the former Minister for Agriculture and Livestock using money parked at LDC for the purposes of Agriculture Price Support Intervention Scheme, an initiative of the Marape Government. 

The purchase of this vehicle for the Minister amounts to double dipping on the part of the former Minister and misapplication of limited financial resources by the LDC Management. 

Government Ministers and Members of Parliament are entitled to motor vehicle allowances. (Refer to Attachment 6). 

8. Abuse of funds for Sialum Cattle Project 

K80,000 cash was withdrawn from LDC accounts for Sialum Project in Morobe Province for purchase of cattle and materials in July, 2021 as Sialum Project Mobilization funds. To date, there is no evidence of cattle and materials being supplied. (Refer to Attachment 7). 

9. Abuse of K4 Million Earmarked for Rice Program 

K5 million was transferred to LDC account from DAL to support rice farmers under the Agriculture Price Support Intervention Program in year 2021. To date, K750,000 was correctly utilized while K4,250,000 or 85% of the money was expended on areas unrelated to the rice industry and diverted to areas only known to Mr. Terry Koim, Managing Director LDC. 

DAL had continuously requested LDC for the remaining K4.25 million however, there has not been any feedback from the LDC. (Information with DAL – Food Security section). 

10. Fraudulent Payment to Motor Vehicle Hire Company 

A total amount of K114,000 was paid to a hire car company known as Jimepos LTD based in Mt Hagen. Four lots of payments were done between February, 2021 and July, 2021. There is no information within LDC to establish as to which LDC officer used the vehicle and for what official LDC business. 

The irony is that significant number of brand - new motor vehicles were purchased and yet, LDC continued to incur huge costs on motor vehicle hires. Thus, this payment is suspicious.  (Refer to Attachment 8). 

11. Illegal Payment of Board Stipends 

Board of Directors of LDC had approved themselves Board stipends which were way above the Salaries Condition and Remuneration Committee (SCMC) approved rates. They were illegally paid in the following manner; 

(a) Chairman K78,000 pa 

(b) Deputy Chairman K72,000 pa 

(c) Directors K60,000 pa  

The correct approved SCMC rates are;  

(a) Chairman K12,000 pa  

(b) Deputy Chairman K10,500 pa 

(c) Members K9,500 pa  

LDC Board and Management should be investigated for illegally in receipt of stipends amounts exceeding the SCMC approved rates. (Refer to Attachment 9). 

12. Illegal Payment for Salaries to Ministerial Staff

A Mr. Jack Mathew Akike who was a Ministerial staff of the former Minister for Agriculture and Livestock, John Simon had been receiving salaries from LDC as Board Administration Officer. It was noted that Mr. Akike was basically drawing salaries from LDC for doing nothing while receiving salaries as Ministerial staff resulting in double dipping. 

Mr. Jack Akike was knowingly appointed by Mr. Terry Koim, Managing Director, LDC on a salary of K22,500 per annum leading to double dipping on the part of Mr. Jack Akike. (Refer to Attachment 10). 

13. Illegal Payment of Salaries to Non - LDC Staff 

A total of ten casual staff of Kwimbu Cattle Ranch in Mapril, East Sepik, a cattle ranch privately owned by former Member for Maprik and Agriculture and Livestock Minister, John Simon, had their fortnightly salaries paid by LDC. They were on a fortnightly salary of K300 per head equating to K3,000 per fortnight. An investigation should be instituted over this matter as it is illegal. Mr. Terry Koim, Managing Director LDC took this decision to please the then Minister for Agriculture and Livestock. (Refer to Attachment 11). 

14. Illegal Appointment of former Ministers First Secretary as LDC’s Company Secretary 

Mr. Terry Koim, Managing Director LDC had appointed a Mr. Otto Wangilan, former First Secretary to the Minister for Agriculture and Livestock, John Simon as Company Secretary to LDC. This appointment is illegal and amounts to abuse of his power as Managing Director as it is only the LDC Board that has the authority/power to appoint the Company Secretary in accordance with the company constitution as LDC is a registered company under IPA. (Appointment Information available with DAL). 

RECOMMENDATIONS

As millions of kina budgeted by National Government for the development of the livestock industry is being mismanaged by the Board and Management of Livestock Development Corporation Limited, an investigation is now urgently needed by the relevant authorities with the following possible actions; 

1. Work in conjunction with the Department of Finance on action taken so far on the formal complaint already laid by the sidelined Acting Secretary DAL, Mr. Stephen Mombi. Mombi’s substantive position in the public service DAL structure is Deputy Secretary Technical Services. 

2. Mr. Terry Koim, Managing Director of Livestock Development Limited be criminally investigated for the theft, abuse and loss of National Government and tax payer funding that now runs in to the millions. 

3. The entire Livestock Development Corporation Board be suspended for failing to diligently discharging its fiduciary role as the overall authority of the organization.  

Copies of this complaint were served on: 

Hon. James Marape, Prime Minister,

Hon. Aiye Tambua, Minister for Agriculture,

Hon. Sekie Agisa, Minister for Livestock,

Hon. Joe Kuli, Minister for Coffee,

Hon. Francis Maneke, Minister for Oil Palm, and 

Special Police Forensic Criminal Investigations Team.

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