THE Government has decided to pay businessman Peter Yama K15 million, a damages claim which had been referred to the Commission of Inquiry into the Finance Department for investigations for possible fraud.
When the claim surfaced last year, the Government moved quickly to block it. A cheque raised by the Finance Department to pay Mr Yama half of that amount based on a court decision was frozen.
The National Executive Council met and directed the Department of Finance and Attorney-General to challenge this claim and others.
The NEC directed that claims against the State be challenged in court, and only paid if ordered by the court on merit.
The Yama claim was also referred to the Sheehan inquiry to look into, and adverse findings and recommendations were made regarding the claim.
But lawyers and sources in Waigani familiar with the case said the Attorney-General’s De-partment consented with Mr Yama to settle the claim for K15 million.
A settlement agreement was presented before a National Court judge last Thursday.
Attorney-General Dr Allan Marat and Solicitor-General Neville Devete did not return calls made to their offices and mobile phones yesterday.
A staff at Dr Marat’s office said he was in a meeting and would return the call.
Two Cabinet ministers contacted last night said they were not aware of any decision by the NEC to reverse their earlier stand on such claims against the State.
Finance secretary Gabriel Yer said he had no idea about the settlement, when contacted.
“There is a standing NEC decision on this and they are going against this. I’m very surprised,” Mr Yer said.
A lawyer familiar with the case said it had to be queried whether all defendants in the case consented to this settlement. The defendants in the proceedings against Mr Yama are (then) acting chief of staff of the Prime Minister’s office Leonard Louma, Mr Yer and the State.
“The Attorney-General has the power to settle all State matters, but the other defendants still need to be consulted.”
The lawyer also said he understood lawyers representing Bank South Pacific were making enquiries about the settlement.
BSP claimed Mr Yama and his companies owed the bank money, and had instituted proceedings to recover those monies.
Mr Yama and BSP could not be reached for comments yesterday.