There has to be another way

 A CENTURY-old PNG story supposedly came to a sad ending this month when Lutheran Shipping, the flagship of Kambang Holdings Ltd went into voluntary liquidation.

Kambang Holdings is the business arm of the Evangelical Lutheran Church of Papua New Guinea, the second largest Christian denomination in the country boasting a membership of about 1.5 million.

The implications of any dissolution of Kambang Holdings are many and far-reaching and we hope the church council in its wisdom has carefully weighed up all before making its watershed decision.

In law, liquidation is the process by which a company (or part of a company) is brought to an end, and the assets and property of the company are redistributed. Liquidation is also sometimes referred to as winding-up or dissolution, although dissolution technically refers to the last stage of liquidation. 

It appears from media reports that the church council (as shareholder) opted to voluntarily liquidate Kambang Holdings as opposed to compulsory liquidation which happens when an interested party or creditor lodges a petition calling for such.

Voluntary liquidation occurs when the members of a company resolve to wind up its affairs and dissolve. The decision to liquidate Kambang Holdings arose from the church council resolution alluded to in the media reports.  

Not surprisingly, the decision was met with stiff opposition from church members and politicians including current Morobe Governor Kelly Naru and his predecessor Luther Wenge.  

The former governor’s elder brother Giegere is the current head bishop of the church and therefore chairman of the council that resolved to do away with the pride of the church.

Wenge has described as unwise the decision to liquidate a company which he says goes back 107 years.  

The church council certainly risks opposition and rebuke from the church membership for the decision.  Luship has served the church and especially the northern part of country for a good part of a century until very recently when it began ‘sailing into turbulent waters’.

It is no secret though that the church’s business arm has been struggling financially and administratively for the past few years.

Whether it was due to truly difficult economic conditions under which to profitably run a business such as Luship or plain inept management, Lutheran Shipping’s troubles began surfacing when one by one its vessels became grounded or spent extended periods at the dry dock.

What is also apparent from the reported reaction by executives of at least 10 church parishes in the city of Lae is that the church council had failed to adequately explain the rationale for its decision.

Yes, it is makes commercial sense to dispose of assets of a struggling company to repay what it owes to creditors and pay shareholders and employees before it accumulates further debt.

Accusations were hurled at the management for running down the company.

However, this is not the time to apportion blame when hundreds of coastal and islands villagers are longing for a return of the Lutheran Shipping vessel to grace their shores once more and dozens of families’ stand to lose their source of income through working for Luship or the parent company.

Coastal and island villagers of Morobe are taking risks travelling on small dinghies to and from Lae when previously Luship was there to provide such a more safer service.

If Lutheran leaders such as Governor Naru and others are strongly opposed to the church council’s decision, obviously they must have those other options to offer the church to consider before a drastic decision such as one to liquidate Kambang Holdings is arrived at.

The Lutheran Church can pride itself as a truly nationalised institution having taken over from expatriate missionaries and technical experts including business managers.  

It has enjoyed its independence, shunning total reliance on foreign donations.  Kambang Holdings has over the church’s history supported its core evangalisation work.

Today, however, it is truly tragic that Kambang Holdings has turned into a bane the Luthern Church wants to rid itself of.  

Surely, there must be another option for the church to preserve and sustain its business arm.