PNG Air refutes Nasfund’s claim

Business

PNG Air has refuted Nasfund’s claim that the airline has not been performing well.
Nasfund had described PNG Air as a non-performing, illiquid and non-yielding investment for the fund.
It holds 39.29 per cent of the total shares on issue and is the largest institutional investor in the airline.
“This is totally incorrect,” acting chief executive Anthony Pereira told The National.
“They are basing on 2016 information and subsequent erroneous reports sent to the PNGX (PNG National Stock Exchange) markets for 2017 to 2019.
“Our financial reports are being audited for 2017 to 2019 as we speak following our engagement two months ago with an independent chartered accounting firm in Australia.”
Pereira said the accounting firm would “review and submit their views on major erroneous accounting entries that were detected and done between 2017 and 2019”, which showed losses rather than profits.
He said the PNG Air auditors refrained from signing off the accounts.
PNG Air trading was suspended on PNGX.
“These have now been rectified following advice from the independent chartered accounting firm and forwarded to our auditors in PNG to finalise the audit,” he said.
Pereira said between 2017 and 2019, the airline made profits which were now part of the audit conducted.
“We also need to mention that had we not made profits, we would not have been in a position to have a cumulative amount of K88.8 million that we paid via remittances to our aircraft lessors and ATR (aircraft manufacturers and parts) for deposits to be held for such things as aircraft maintenance reserves, rental deposits, pre delivery payments for new aircraft and deposits for aircraft spare parts,” he said.
“If we are a non-performing firm and ill-liquid as claimed, none of this could have happened.
“Since 2016, PNG Air did not borrow extra, nor did we get any further funding from shareholders, nor did we get any grants for us to have achieved what we achieved.
“Further, we have also submitted to our auditors our three-year strategic plans to 2023 including cash flows and savings we are achieving as a consequence of how the new management of PNG Air is going to do business in the future.”
On PNG Air’s suspension of trading on PNGX, he said: “We have informed PNGX that the accounting errors have been fixed and forwarded to our auditors who are now conducting the audit.
“Once this is done and the audited financial reports for 2017, 2018 and 2019 are finalised and signed off, they will be submitted to PNGX.
“PNG Air’s suspension at PNGX will then be immediately lifted.”

9 comments

  • If these information was divulged to the investors it would not have come to that situation.
    Funny though! Why go overseas for auditing when PNG auditors can do it and mind you would be cheaper.
    After all PNGair is in PNG.
    You should be saving money and paying dividends to shareholders.

  • You can be assessed as performing once your share price is over K1. Everyone who has invested has lost big time. We were all conned into buying shares on a misleading prospectus!!

  • I support the previous commentary, why go overseas and engage an Auditing Firm when you have over Qualified PNG companies who can do the same job at an even cheaper cost to the company. These has always been the management’s first choice..give business to Australia and suppress PNG

  • Accounting for corporate companies must at all times comply with GAAP and other International Standards to ensure such errors are minimal. I wonder, who were responsible for the books.

  • PNG Air have to be cautious because what Nasfund insist now would be some kind of influence..

  • To say PNG Air is non-performing business is entirely not true. It has improved its performance in many fronts, however it was not able to deliver on dividend hence the label.
    the airline has increased its revenue over the year, however it failed to deliver profit because of unnecessary costs within the organisation that were never put under the microscope. To give a clue, in Finance dept, there were positions mostly occupied by expats namely, Chief Financial Officer,Financial Controller, Financial Planning Manager,Business Project Manager, Chief Accountant and Finance Manager. Of there positions, only 2 positions were necessary. Now, this is just one dept.

    The company fared well in terms of revenue generation, however cost analysis was never a priority hence no profit. The management team did not have a strategy to turn a percent of every kina of revenue into profit. All they boasted was market share and increased revenue.

  • I want Nasfund to sell off its shares as quickly as possible and the money reinvested somewhere else. Since 2008, no dividends paid so why should hard working members funds be left in there without seen any profits for the last 11 years, Nasfund suppose to be making money on investments for the members. Just sell off the shares and have nothing to do with PNG AIR.

  • PNG should not deny the fact that their operating cost has outweighed revenue hence no profit and dividend to shareholders. Nasfund has the right to raise its grievance in the media. The comment made by the acting CEO of PNG Air Ltd blaming its 2016/2017 financial reports with erroneous accounting entries is just “smoke screen” to hide the real status of the company. The reason why POMSOX had to de-register PNG Ait Ltd was due to its auditors refusing to signed of reports before furnishing to them. There is highly likely that the its financial reports may have been tampered by the PNG Air board which its auditors refusal to sign-off. Why hiring another audit firm from Australia to redo the same financial reports. This is totally misleading hence PNG travelers through PNG Air lines must be extra cautious of their lives given status cash-flow problem with this company.

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