Response to SINPF board - Solomon Star News

Response to SINPF board
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01 March 2018
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Dear Editor – The press release by SINPF in the Solomon Star newspaper, No. 6829 on Thursday 15th February 2018, including the statement issued by the CEO of NASFUND of Papua New Guinea, in response to the issues raised by George Kosui and myself does not answered the questions raised in relation to the loans, investments, and how the Fund has been managed and administered generally by the management and board.

First, the statement by the CEO of NASFUND was irrelevant and in no way relate to the issues in question. 

The SINPF do not invest in NASFUND, therefore making statements on NASFUND and its financial standing and position is of no use to members of SINPF. 

The SINPF investment is in Heritage Park Hotel, a minority shareholder (10%), and a company incorporated in Solomon Islands. 

What he needs to clarify is the payment of $4.7 million to CGA limited, a shareholder to ensure SINPF’s 20% shares to secure the 10% after a restructure and after SINPF already acquired the 10% shares. 

Don’t know if this s a buyback as a result of undervaluation of shares or dilution of shares as a means to attract additional capital, the latter contradicting CEO of NASFUNDS statement.

Also he should respond to the question as to why there was no dividend payment to SINPF for the shares held in the Heritage Park Hotel in 2016 financial year. 

The Heritage Park Hotel was granted an interest free and tax for 3 years which expired in 2015, but why didn’t they pay their loans for 2015 and 2016?

What the members expect from the management and board are answers to issues summarized below.

 

Investment and Administration issues

  • It has become a common practice that all companies that SINPF is a shareholder turned to SINPF for a loan (see 3 investments).  SINPF is not a commercial bank.
  • The Sasape International Shipyard Limited loan is at the risk of not performance.
  • Payment of $3 million as investment in King Solomon needs clarification.
  • Money lent to Malaita Shipping, Western Queen, SIEA Housing and SIWA Housing need to be clarified.  Have these funds being recovered?
  • The out of court settlement of $156.4 million payment to GRP needs clarification.
  • Key management personnel (11mgmt. staff) employment related expenses was recorded at $14.5 million in 2016, an increase of 209% from only $4.7 million in 2015.  This is far too low compared to only $2.6 per annum million remuneration paid to CBSI key management (21 mgmt. staff) personnel in 2016.  This increase is different from the recent salary increase in 2017.
  • The recent salary increase in 2017 raised complaints from general staff. Can the board explain the recent salary increase in view also the substantial increase of key management staff related expenses increase of 209% in 2016 from a mere $4.7 million in 2015 to $14.5 million.
  • Controversial loan approved for Tavanipupu in 2012 (John Sullivan & Colleagues) has not been serviced since the day it was paid to Sullivan and his colleagues.  Total cumulative outstanding loan balance as at 22 February 2017 was $24.4 million.  The current market value of $30 million of Tavanipupu Resort is unbelievable and who is actually doing the valuation of the property?
  • The engagement of Bauro Koraua (Bauro & Associates) to do appraisal and revaluation of the Fund’s Investments for 2015 raised questions of conflict of interest.  Bauro Koraua has just completed his term as a Director and Chairman of the Board in May 2015 and to engage him constituted conflict of interest and reflected corrupt practices by the Board and Management of the Fund.

What I gather from the official response from Management of SINPF was the fact that they have not answered the question raised. 

I support the need for the fund to invest, but such investments must have positive and higher returns and not those that benefit non-members.

I am therefore calling on the board of SINPF to respond to these issues and call on members to see these issues as serious to the safety of their investment with the fund.

Charles Dausabea
Auki

 

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