GULF provincial administrator Miai Larelake has been slapped with 20 charges of misappropriation by Governor Havila Kavo and given three days to respond.
Sources said the amount reportedly totalled a few million kina.
Among the entities involved was the Gulf Investment Trust (formerly Gulf Oil Trust) which Mr Larelake took over as acting chairman after Chris Haiveta was sidelined as governor following a Leadership Tribunal inquiry.
Mr Larelake allegedly refused to vacate the post for the new governor and went to the court instead, the sources said.
They said some trustees indicated they might resign as they feared a long battle between the business arm and the provincial government.
Mr Larelake has denied the allegations and accused Mr Kavo of trying to appoint his own man as provincial administrator.
He also said that Mr Kavo had failed to follow the proper procedures in instituting the charges.
“Under the laws, the governor should submit the allegations to the Auditor-General who will check the books and make recommendations for further action,” Mr Larelake told The National.
“I have a clear conscience and these are mere allegations without substance. This is just one way that he is trying to remove me.
“I am officer of the independent state of Papua New Guinea and not Gulf province.”