Telikom chief suspended

TELIKOM chief executive officer Peter Loko has been suspended pending investigation into "unauthorised" contracts he entered the company into, Public Enterprises Minister Sir Mekere Morauta said.

He will be replaced in an acting capacity by Charles Litau, a former employee of Telikom. He also formerly served as an executive in Sir Mekere’s PNG Party.

Loko was unavailable to comment on his position yesterday.

Sir Mekere said Telikom "illegally entered into numerous contracts involving the payment or receipt of more than K1 billion", according to an audit by the Independent Public Business Corporation.

The government had received a K200 million bailout request from Telikom.

"Telikom is required by law to seek approval from the treasurer in accordance with section 46B of the IPBC Act. It did not do so," he said.

"It is the CEO’s responsibility to ensure approvals are sought, which is why he is suspended.

"The investigation will seek to establish whether the Telikom board was aware that the requirement for ministerial approvals appeared to have been routinely ignored."

Sir Mekere said the failure by Telikom to seek approvals and to fully inform the treasurer of its financial dealings had placed the public company in financial difficulty.

"It now requires very substantial public funding to save it from insolvency,’’ he said.

"Let us be very clear – the operation of the national telecommunication system and thousands of jobs have been put at risk."

He said the worst example of financial illegality was the unauthorised borrowing of K340 million from two banks, of which K200 million had been drawn down.

Telikom is unable to repay the capital (it is repaying on the basis of interest only) and is asking the government to bail it out.

The banks are asking the government to guarantee the loan.

Even worse, a Telikom document from some time ago states that the K200 million "… has not yielded enhanced revenues because the capex programmes have not been taken to their logical conclusion".

"In other words, K200 million of borrowed money has been spent without the required approval and without yet producing any revenue for Telikom," Sir Mekere said.

"Too many public enterprises are flouting the law, with disastrous consequences for the nation.

"The law is there to protect taxpayers’ funds and the national interest, and I will not hesitate to pursue public officials and others who do not comply with the law."

The revocation of appointment, contained in a gazettal notice of Feb 10, was also issued to Telikom board chairman Gerea Aopi and board members Albert Veratau, Clark Kuliniasi, Anthony Smare and Leon Buskens.

The notice appointed N Sadiq Ali as chairman, with Jacob Lemeki, Dr Samuel Kopamu, Arthur Roberts, Cedric Rondoke and Maxwell Paiya as members of the board
of directors of Telikom PNG Ltd.