Court freezes MoA funds

THE controversy surrounding the questionable payments of K180 million in project funds to various entities in Southern Highlands province has taken a new twist, with the National Court freezing a bank account holding K25 million in memorandum of agreement (MoA) funds.
The National Court in Waigani issued this order yesterday, and indications are that more court actions will follow to freeze the bank accounts holding millions of kina paid to other entities, if these funds have not already been spent or transferred out.
The K25 million is part of the K180 million that was paid out by the Department of Finance to a number of entities that claim they had projects to implement in resource project areas of Southern Highlands, particularly Kutubu, Moran, Gobe, and Hides gas fields.
According to documents filed in court, a manual cheque (no. 6027) raised last Aug 6 was paid to Koroba-Lake Kopiago MP John Kekeno.Plaintiff Hiwako Constructions said proper procedures were not followed to raise this payment.
The company said under an earlier agreement, it was supposed to be paid this money for the construction of a 66km road from Koroba to Lake Kopiago.
The total cost of this project was K31 million.
Hiwako said it conducted a feasibility study and presented a complete report on Feb 28, 2008, and was paid K100,000.
It was owed another K100,000.
The company is awaiting approval from the Expenditure Implementation Committee (EIC) for the transfer of funds to start the road project, when it became aware that Mr Kekeno had picked up the cheque of K25 million from Finance Department.
The company launched court proceedings on Monday and, yesterday, obtained orders freezing the funds in the account held at Bank South Pacific.
The court directed that secretaries Gabriel Yer (Finance), Simon Tosali (Treasury), Joseph Lelang (Planning), Rendle Rimua (Petroleum), Mr Kekeno and BSP chief executive officer Ian Clyde be restrained from dealing in any way with the funds.
The court directed that the funds be frozen and that details of the account be made available to court.
The plaintiff said it went to court after learning that a sum of K1 million was taken out of the account last Friday.
Lawyers for the plaintiff said they were seeking more information on this transaction, and what the funds withdrawn might be intended for, although they understand Mr Kekeno was planning to buy heavy machinery from Lae.
The Koroba and Lake Kopiago districts are some of the least developed areas in the country, where roads are virtually impassable and Government services including health and education are non-existent.