Fiji Pine scam exposed

  • 30th November 2005
  • 2005
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Finance Minister Ratu Jone Kubuabola was axed as chairman of Fiji Pine Ltd in 1998 by the SVT government for failure to perform his duty.

This was revealed in a front page story in the Fiji Sun 30 November by SVT’s Minister for Agriculture at the time Militoni Leweniqila. He said he had also sacked board members Navitalia Naisoro and Konisi Yabaki.

He said he gave a directive to Kubuabola to resign as chairman, if he did not he would be sacked. He refuted a claim in Parliament yesterday by the Government side that Ratu Jone had resigned over the Anglo Pacific deal.

This followed a petition by landowner directors of Fiji Pine asking that Ratu Jone be removed and board member Navitalia Naisoro’s contract not be renewed when it expired at the end of December.

Under Ratu Jone, the pine plantation had been neglected – vast areas were not replanted and what was replanted was not pruned, weeded and thinned with the result that timber produced was not suitable for marketing.

Part of the scam involved the fact that Navi Naisoro was a board member as well as consultant to Fiji Pine. He received a little over $68,000 in consultancy fee from Fiji Pine between October 1997 and December 1998.

Payments were authorised by Ratu Jone and Yabaki and made without the approval of the board. The board reacted angrily when it discovered in December 1998 that an advance payment of $22,000 had been made to Naisoro.

In another scam, Naisoro drew up a service contract for Konisi Yabaki which would allow him to continue as managing director. The contract was severely condemned by Fiji Pine’s lawyers Young and Associates, as a fraudulent document.

The contract put Yabaki as managing director on a performance based package of $60,000 per $1 million consolidated group after tax profit or a proportion thereof.

As part of the contract he was to get a $90,000 advance every year, paid monthly in advance. The ‘loan’ was to be repaid at the end of each financial year.

A letter by Young and Associates stated that “both Mr. Yabaki and the chairman were in collusion with each other in the execution of the contract”.

It went on to warn that the advances were unsecured and there was nothing to prevent him asking for a second year advance.

“The fact that there is to be an advance of $90,000 alone is questionable in view of the fact that it is really a loan” and in breach of the Companies Act, the lawyers said.

Youngs & Associates said the deal would allow Yabaki to be paid through profits generated by Tropik Woods even though Fiji Pine itself was reporting a loss each year.

The scam was referred to in Parliament by Deputy Leader of the Opposition Poseci Bune during debate on a government guarantee to the financially strafed Fiji Pine.

Bune accused Yabaki and Naisoro of creaming profits off Fiji Pine Ltd.