Melanesian Trustee Services keeps licence, retains Balance Fund

The National Main Stories

THE Melanesian Trustee Services Ltd (MTSL) has obtained a court order staying the application of Securities Commission of PNG to revoke its capital market licence and remove it as trustee of Pacific Balance Fund (PBF).
The Waigani National Court however, refused MTSL’s application to restrain Alex Tongayu and Securities Commission (SCPNG) from reviewing or investigating MTSL.
On Sept 12, Tongayu, SCPNG and Oxley Equities Ltd (OEL) filed an application to review the following four decisions made by Tongayu:

  • To remove MTSL as the trustee of PBF;
  • To revoke MTSL’s capital market licence;
  • To appoint OEL as the interim trustee to PBF; and
  • To conduct a regulatory review of MTSL.

Each of the decision was made by Tongayu as the chairman of SCPNG because by law, the chairman had the authority to exercise all the commission’s powers under the Securities Commission Act and Capital Market Act.
MTSL however, sought an application to stay the four decisions pending the determination of the appeal to effectively restrain Tongayu, SCPNG and OEL from implementing the decisions.
Justice Royale Thompson last Friday ordered that:

  • The decisions of Tongayu and SCPNG to revoke MTSL’s capital market licence and remove it as the trustee of PBF and appoint OEL as interim trustee to PBF have been stayed and Tongayu, SCPNG and OEL have been restrained from implementing those decisions pending the determination of the proceedings;
  • The application by MTSL to Tongayu and Securities Commission of PNG (SCPNG) from reviewing or investigating MTSL was refused. On Oct 16, Mineral Resources Development Company Ltd filed another application against MTSL wanting to revoke its capital market licence.

The application was however dismissed by the court on Oct 26 with costs awarded to MTSL.
The court found that in the affidavits or statements of Tongayu, SCPNG and OEL, the decision to remove MTSL as the trustee was stated in a gazettal notice of the capital market Act.
It was stated that the board had the power to appoint an interim trustee after the position had become vacant following removal by its members.
Justice Thompson said the Act however did not give Tongayu, SCPNG and OEL any other power to remove a trustee because there was no vacancy.
Justice Thompson said the decision may have been a breach of the Act.
MTSL’s interim chief executive Lawrence Stephens said it was very annoying that people were making accusations against MTSL.
Stephens said MTSL was an independent body that looked after the assets of its clients.
He said it was also very disappointing that so much time and money were being wasted in the process of going to courts to justify who was right.
Stephens said MTSL had more than 200,000 unit holders and more than K540 million worth of assets to be paid as dividends to unit holders.
According to MTSL’s lawyer Justin Haiara, the case would return to court in February.