Court rejects BSP’s exclusion appeal

National, Normal

The National- Monday, January 17, 2011


THE National Court last week refused an appeal by Bank South Pacific (BSP) to be omitted as a respondent in a court case relating to an alleged fraud transaction involving LNG-related development grants.

Justice Ambeng Kandakasi announced the refusal in court after finding that a K20,000 from a seed capital of K1.95 million was being allowed to be withdrawn by an individual before the lapse of the clearance date of the cheque.

Though BSP, through its lawyer, explained that the transaction process was done through the course of customer service, the court was adamant that the grounds surrounding the priority given to the client to allow the withdrawal were questionable in court.

 Kandakasi highlighted that a cheque worth a lesser amount was given a week or two to be cleared and BSP would have to appear in court to explain the arrangements for the fast clearance without any payment being made, and for allowing the withdrawal of a portion of  a larger amount of money to take place.

The court was told that the account containing the money was frozen on Jan 6 when a restraining order was successfully sought through an urgent application by Irakorah Investment Ltd, a landowner company from Kutubu in the Southern Highlands that owned Segment 5 of PPL2 project area.

The court also heard that the money was allegedly obtained by another company, Airea Investment Kutubu Ltd, of which an individual (named) was the single director and signatory.

Kandakasi warned other banks to take note of this and to follow proper procedures when processing and transacting monies from such payouts.

Kandakasi ordered the freeze on the account to be extended until the court reached a decision.

The case continues this week.