$15M LOAN, A FAIL DEAL: NPF bosses back under spotlight - Solomon Star News


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$15M LOAN, A FAIL DEAL: NPF bosses back under spotlight

25 June 2014

THE controversial $15 million loan obtained from the National Provident Fund (NPF) by the Tavanipupu Resort owners is reportedly in tatters.

A well placed source told the Solomon Star the undertaking yielded no positive returns, which resulted in the accumulation of loan arrears.

“Yes, the loan is now in default with huge arrears owed to NPF,” the source said.

He said the arrears now rake into the $20 million mark.

The Solomon Star picked this tip from Forum Solomon Islands International (FSII), an organisation that with the Malaita Ma’asina Forum (MMF), were very vocal about the decision by the NPF board and Management to risk by lending money to a foreigner to re-develop Tavanipupu.

FSII chief Executive Officer Benjamin Afuga also told the Solomon Star a reliable source informed him that the loan is in default.

Mr Afuga then posted on the FSII facebook page that the resort will be put out for sale by the end of this month.

“And already, a few international businessmen have shown interest to buy the island resort, which hosts the royal couple in 2012 (Prince William and Princess Williams) when they visited the Solomon Islands,” he said.

This post on FSII attracted overwhelming outrage from members who are worried about how SINPF has been lending out NPF members’ monies to foreign business people.

This $15million loan when uncovered by MMF and subsequently attracted condemnation and calls for the removal of the NPF board management, was staunchly defended by the NPF board chairman Baoro Laxton Koraua.

Mr Koraua insisted then that the decision to approve the $15 million loan for Tavanipupu Island Resort in Marau, East Guadalcanal, was purely a commercial decision, adding the interest rates charged would be very competitive in favour of SINPF.

Amidst continuous calls for the sacking of the entire NPF Board, he continued to maintain that a thorough prudential study was carried out [by NPF’s Investment team] on whether or not to lend the money to Tavanipupu Island Resort and have agreed that the terms were good and the return was good for SINPF and its members.

He said then that it was certainly far more competitive than what SINPF will get if the money stays in the banks, but also added that it was an investment that was riskier, but the returns warrant the risks, and the cover will double the value of the loan.

He then assured NPF members that their money was well protected.

But now that the whole deal is a failure, the source revealed to the Solomon Star that the NPF bosses met to discuss the issue on Monday this week.

Asked what exactly was on the table, the source said he will investigate further.

When contacted to comment on the issue, an executive NPF officer who spoke on anonymity said it is highly likely NPF will take ownership of Tavanipupu Island Resort.

“...but if there is a default by Tavanipupu Island Resort, which is the case now, SINPF can take over ownership of the business and impose management changes, and possibly impose provisions to assume ownership of the Island.

FSII earlier accused the NPF Board of controlling and manipulating the National Provident Fund for the benefit of a few foreigners and nationals to the detriment of Solomon Islands and members of the SINPF.

FSII initially insisted that the awarding of the Loan to Tavanipupu Resort was in total breach of the NPF Act.

SINPF now has membership of over 160,000 and the total membership contributions grew to $1,763 million in 2013 compared to $1,402 million in 2012.

The growth was primarily fuelled by the increase in membership during the year to 162,351 members, up by 55% from 2012 and at the same time members’ contribution accounts have also significantly expanded as a result of the 20% crediting rate awarded to members in 2013.

The Central Bank of Solomon Islands in its 2013 annual report said while NPF showed positive performance in 2013, it must be noted, it still has a lot of work to do around its investment and operational risk management.

“On a broader issue there is an urgent need to review and modernize the existing legislation and policies that governs the Funds operations,” the CBSI report which was launched this month stated.

Tavanipupu Resort is owned by Island Holdings Pty. Limited and Lindley Investments Pty Limited.

These companies were reportedly not existed in the Solomon Islands and as such not subject to the laws of Solomon Islands including tax laws.

Island Holdings Pty. Limited in accordance to Australian Securities and Investments Commission was owned by DOUBLE ISLAND REEF CLUB RESORT and has been deregistered.

Lindley Investments Pty Limited is owned by Barraclough and Macbridge and is also a shareholder in the Honiara Resort (Solomons) Ltd, which is being used to allow Honiara Casino to operate with following the Gaming and Lotteries Act of Solomon Islands.

FSII said there are no human beings owning the Tavanipupu Resort but paper companies that have no operation anywhere in the world.

FSII considers the loan as going into thin air and members undoubtedly risk losing the $15 million from their sweat and toil.

The directors of Tavanipupu Resort are John Sullivan and Pamela Kimberley who is facing a high court case for non-payment of dues whilst John Sullivan has held the NBSI Health Trust for the last 12 years.