Micah gets SOEs on track

 MOTOR Vehicle Insurance Ltd (MVIL) has been embroiled in a lot of controversy and attracted a lot of publicity too.  

As an entity its mission has remained the same though its structure and name have changed a few times. 

Out of the man low points in the company’s existence, it now appears that the purported investment of K96 million in an Australian financial institution several years ago stands out as one of the worst decisions made by the MVIL management then.

It was an investment that should not have been allowed to happen.

Thankfully, the State-owned motor vehicle insurance fund is on its way to fully recovering that money; already part of it is in the country after a successful court battle. 

This is a victory for the company and the country.

State Enterprise and Public Investments Minister Ben Micah says when he took office he came across so many corrupt dealings in PNG Power, PNG Ports, IPBC, Telikom PNG and other state owned enterprises (SOEs).

Prompted by such a poor state of affairs and growing public discontent over the performance of these SOEs the minister has commenced a crusade to clean out SOEs and recoup money that had been lost to bad investments, withheld in unpaid debt or stolen outright.

The state of emergency declared for the state owned electricity provider is thus far the most eloquent statement by the minister and government to revive these ailing public businesses.  The move is not only to bring them to profitability but also raise their standard and quality of services to the public.  It is a huge call.

What boggles the mind of the man on the street is how and why these public entities, virtual monopolies in their line of business, could ever slide to near bankruptcy.  

The minister was encouraged that one of these public businesses under his ministry and the Independent Public Business Corporation (IPBC) has succeeded in recouping some of its money invested in an Australian financial institution by a previous management. The Motor Vehicle Insurance Ltd has recovered about K42 million from the Australian company it had invested in six years ago following a long court battle. About K53 million of the total investment, held in bank accounts frozen by the court, is subject to continued court battles.

The Australian Supreme Court had ordered Woodlawn Capital Pty Ltd to repay the money invested in Woodlawn by the previous management of MVIL.

MVIL had transferred K96 million to Woodlawn to invest and manage the fund “with the aim of growing the fund over time.”

The money, it later appeared and from fact proven in court, should never have been invested in the said company by the MVIL management.  Again this raises questions about MVIL’s previous management. Did it have the benefit of sound investment advice and analysis necessary to commit the motor vehicle owners and operators’ insurance money in the manner it did?

Whether it was a genuine investment that has gone wrong or a ploy to embezzle would be best answered by those behind the decision at that time.  

However, the IPBC board has determined that it would make all involved accountable for that decision.

Was someone so gullible to sink money in some “penny stock” just because it is Australian? 

Micah’s bold stance to clean out and revamp the state public businesses has apparently gained some success thanks to the caliber of people in control today. The minister said the SOEs were now in a healthy state. 

“This is a reflection of the quality of people appointed in the IPBC board and SOE boards,” he said.

However reassuring Minister Micah’s statement might be, there is still bound to be public cynicism.  Because of the past of these SOEs and how they have been managed collectively or individually, questions remain hanging over the heads of the SOEs, the boards and politicians like Micah himself.  

However, Micah has surrounded himself with leaders who he believes are the right kind of people to break the cycle of bad management in the SOEs and make a difference for the country.  

This is the moment to make that difference.