7 Feb 2017

PNG ministers stood down over land deal

7:56 am on 7 February 2017

Papua New Guinea's prime minister has announced that two of his cabinet ministers are standing aside pending a probe into their involvement in alleged fraud.

Papua New Guinea Prime Minister Peter O'Neill gives a talk at the Lowy Institute in Sydney on May 14, 2015

The Papua New Guinea Prime Minister Peter O'Neill. Photo: AFP / Peter Parks

The Minister for Defence Fabian Pok and Minister for State Enterprises William Duma are alleged to have committed the fraud in relation to a land deal for a purported PNG naval base relocation.

It has emerged that the state-owned asset holding company Kumul Consolidated Holdings paid a company closely linked with Mr Duma US$14million to purchase land at Manumanu in Central Province.

Mr Duma is alleged to have conspired with Mr Pok over the acquisition of the land prior to the sale.

In parliament, the government has faced a barrage of questions about Mr Duma's involvement in the deal, and the suitability of the relocation plan itself.

Last week, Prime Minister Peter O'Neill ordered the Police Commissioner to look into the allegation.

In a statement on Monday, he said that now he has had the chance to examine briefings on the issue, he has decided it is in the public interest to establish a Commission of Inquiry to examine the allegations against the ministers and senior members of departments.

He said while the cabinet had approved of a naval base relocation, no approval was given for the Manumanu deal.

"It appears that individual Government agencies have taken it upon themselves, without proper checks and balances, to undertake land acquisition arrangements," Mr O'Neill said.

"That is why the Commission of Inquiry must deal with these issues, and the manner in which these decisions were carried out."

As well as police, the prime minister has referred the issue to the Ombudsman Commission for alleged leadership code breaches.

Mr Duma told parliament last week that there was nothing illegal about the deal, and that it had been approved by appropriate authorities.

However, Mr O'Neill's statement refuted this.

He said that in addition to the main land deal under question was a series of related Defence Department land acquisitions that combine as a large transaction, as raised in parliament by concerned opposition MP Ben Micah.

"The acquisition of this land has been done in clear violation of the Governments decision, and resulted in 78.4 million Kina (US$24 million) being paid," Mr O'Neill said.

While the ministers have stood aside, the Ministry for State Enterprises is being handled by Minister for National Planning Charles Abel while Fisheries Minister, Mao Zeming, will act as the Defence Minister.

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