Feature

Shine A Light: Provincial Council Calls For Change In Namosi

It has surfaced that prior to 2011, $300,000 was misused by a senior member of the management team who was responsible for the operation of the company at the time.
20 Sep 2021 11:20
Shine A Light: Provincial Council Calls For Change In Namosi
The Namosi Provincial Council headquarters at Navua Town. Photo: Leon Lord
  • Shine A Light is a Fiji Sun Investigative Project and is supported by Pacific Anti-Corruption Journalists’ Network (PACJN).

The people of Namosi want change. For 27 years, the province’s commercial company has not produced any tangible benefits for the people.

Questions of misuse of money and corrupt practices have emerged.

Namosi Development Company Limited (NDCL) is the commercial arm of the Namosi Provincial Council (NPC) – established to financially help develop the province. This was part of the Soqosoqo Duavata ni Lewenivanua Government’s legislative actions in the “Blueprint for Protection of Fijian & Rotuman Rights & Interests, and Advancement of their Development”.

The company was registered with the Registrar of Companies on August 4, 1994.

There have been numerous calls made during annual general meetings for a change in the shareholding structure. But to no avail.

“There is no strong link between the people and the company,” Fiji Landowners Nature Keepers Network acting director and Namosi villager Joe Tauleka, said.

Former Namosi district representative to the NDCL, Farasiko Saunivalu, said he was unaware of the activities of the company when he was representing the district in 2013 to 2019.

“There were a lot of things that were not made clear during company meetings,” Mr Saunivalu said.

To question the operation of the company is seen as disrespectful simply because Ratu Suliano Matanitobua is the chief of the province.

Ratu Suliano is the highest chief in Namosi. He is also a member of the main opposition party, the Social Democratic Liberal Party (SODELPA). Those who were once part of the company, who had dared to raise questions about its operations, were removed.

Ratu Suliano and three others were the initial shareholders of the company. They are listed as:

  • Kiniviliame Taukenikoro (now deceased) – He was the former chairman of the Namosi Provincial Council and Member of Parliament. he was from the village of Wainimakutu, tikina Naqarawai;
  • Samisoni Tuilawaki (now deceased) – He was the former Roko for the province and hailed from Nakavu Village, tikina Veivatuloa. None of his children succeeded him; and
  • Leone Tovutokana (now deceased) – He is the former secretary of the Namosi Development Company. He hailed from Nakavika Village, tikina Wainikoroiluva.

“They run the operation and are basically the owners of the company,” Mr Tauleka said.

But past annual reports indicate that the five tikinas are also shareholders in the Namosi Development Company Limited.

While most from Namosi generally understand the purpose of the company, they don’t see the impact of development projects within the province.

The problem of transparency and lack of accountability regarding the use of finances is something that is often discussed – but only in informal settings.

Efforts to get a comment from Ratu Suliano, the only living shareholder since the establishment of the company, were unsuccessful.

However, during the course of gathering information for this story, he called Shine A Light and requested that the story not be published. He did not explain further except to say that they are considering not holding the annual provincial soli in the future.

He also indicated that they were looking to hold a company meeting when COVID-19 restrictions were lifted. Current company secretary Maika Soqonaivi declined to comment. Mr Soqonaivi succeeded his father Mr Taukenikoro as a shareholder of the company.

Efforts to get a comment from Basilio Cakaunivalu were also unsuccessful. Like Mr Soqonaivi, Mr Cakaunivalu succeeded his father, the late Mr Tovutokana.

Questions sent to the Acting Roko for the provincial council, Epi Dokonivalu were referred to Ratu Suliano.

The incident emerged even while the company was making accumulated losses – and very little profit.

At the time, the company had defaulted in loan payment for the construction of the Namosi House in Suva in Amy Street, Toorak, Suva and Ro Matanitobua House in Navua. Namosi House is rented out by the Government. It houses the Ministry of Health’s main headquarters.

The company was on the verge of winding up. To avoid what would be an embarrassing situation, the company used the $100,000 raised by the province in 2000 to help construct the Ro Matanitobua House to clear the debt.

Normally, the province raises money through its annual provincial soli (fundraising). Each village in five tikinas (districts) raise money with a budget provided by the provincial council.

The Namosi House located along Toorak Rd, Suva. Photo: Leon Lord

The Namosi House located along Toorak Rd, Suva. Photo: Leon Lord

The five tikinas are Veivatuloa, Namosi, Wainikoroiluva, Naqarawai and Veinuqa.

Ro Matanitobua House was opened in September 2003 by the late former Prime Minister Laisenia Qarase.

The initial cost of the Ro Matanitobua House was $880,000. However this escalated to $1.4m because of several setbacks and the 2000 coup.

Funding of the complex came from the iTaukei Affairs Board, Fijian Development Bank and the people.

A source, who spoke on the condition of not being identified, said alleged corrupt practices stem back to the early years of the company’s inception.

The source said he was brought in at the time to help streamline the company’s finances for auditing purposes.

“There were a lot of areas where the money was misused – maintaining the buildings and the rest allegedly for their personal investments,” the informed source said.

The mismanagement of the $300,000 first came to light in a University of the South Pacific thesis titled “Accountability in Fiji’s Provincial Councils and companies: The case for Lau and Namosi”.

It was written and compiled by Masilina Tuiloa Rotuivaqali and published in 2012. The late Mr Taukenikoro was quoted as the Managing Director of the company.

“The province contributed about $100,000, not the Namosi Provincial Council. That money was not used for constructing the Ro Matanitobua House. The man who was managing the operations misused about $300,000 so we had to use the $100,000, which we invested, to clear the debts otherwise the bank was going to wind up the company. The $100,000 is the people’s equity,” Mr Taukenikoro had said in an interview in 2011.

ALLEGATIONS

It is alleged that the late Mr Tuilawaki had used company funds to invest in a personal business endeavour. His wife, Mereoni Tuilawaki denied, the allegations. The couple had operated a second-hand clothing shop in Navua in 2011. The rent was $500 per month.

But the business was short-lived as it was not making any profit. It closed down five years later. Ms Tuilawaki said the second-hand clothes were imported from the United States of America.

She said there was no help from the company. She insisted that the start-up capital was from their savings. NAMOSI HOUSE

The ownership of the Namosi House had come under the spotlight in 2009.

Initially, Namosi House was to generate revenue for the Namosi Development Company through rental payments by the Government. This was not so. In 2009, it surfaced that Namosi House was owned by an investment company – Winproject Limited.

Winproject is owned by local businessmen. They had financed the construction of Namosi House at an initial cost of $7.3 million.

However, negotiations carried out between the two parties resulted in a drop in the cost to $4.8 million.

As security for financing the project, rental proceeds from the Government were directed to Winproject. Only $3000 was allocated to the Namosi Development Company.

At the time, Mr Taukenikoro had told local media that it was a business deal that would benefit the province. It was reported that thousands of dollars paid by the Government had ended up in the ANZ bank account of Winproject Limited.

It is understood that at the time, NDCL was negotiating with ANZ to refinance Winproject Limited.

It is understood that NDCL also holds an account with ANZ Bank.

THE ASSETS

To date, Namosi Development Company Limited owns two buildings – Namosi House in Toorak and the Ro Matanitobua House in Navua. The fixed monthly revenue for both the rental properties total $73,672.24.

The Namosi House is currently valued at $7 million and the Ro Matanitobua House, $1 million.

The company’s Wainaea farm in Namosi has a value of $480,000.

As of June 30 2019, the company generated a revenue of $60,415.15 from their yaqona farm.

The company’s yaqona farm took off with a $148,735.39 loan from the iTaukei Affairs Board Small Business Unit in 1996.

An informed source said in the early years of the yaqona investment, the company had lost a lot of money from their yaqona farm.

The company had also defaulted in loan payments around 2010.

NDCL also operates a gravel extraction site out of Nakavu Village. At the end of the 2019 financial year, the company earned about $36,480.

The company pays the Nabukebuke tribe of Nakavu Village in the form of access fee for the extraction of gravel. As of June 30, 2019, the company paid $13,819.45 to the Nabukebuke tribe.

FINANCIAL PERFORMANCE

Between 2001 and 2007, the NDC wasn’t making any profits except for 2008 and 2010, the thesis stated.

This is the same for the 2014, 2015 and 2019 financial years, where the company also recorded losses.

There is no going concern at the moment, the company’s accountants said. However, should the company record significant losses in five consecutive years that would be a concern.

As of June 2020, the company’s total outstanding loan balance is $4,580,153.49.

COMPANY STRUCTURE AND SHAREHOLDERS

For 27 years, the shareholders of the company have been the privilege of four people and their families.The issue of shareholding structure is a sensitive issue within the province. The province had raised $167,000 for the NDCL through a provincial festival in 1993.

From this fund, $100,000 was invested with the Fijian Holdings Limited and $67,000 was given to the provincial office to fund its operation and clear some of its debt.

The five tikinas had contributed more to the start-up capital of the company than the four shareholders.

POWER DISTANCE

Fiji’s collective society allows for the culture of silence and respect to thrive, Ms Rotuivaqali said.

“These cultural aspects affect the running of provincial businesses,” she said in an interview.

Accounting makes it worse. It can also silence people.

“In accounting we have all these numbers that represent the usage of money, and the companies can say OK our accounts have been audited and then they give out these financial reports during the provincial meetings.

“The members of the province might not understand all that is there, so it kind of hides how the money was used – there is no breakdown, and if money was misused, you can’t tell.”

In the end, provinces don’t benefit.

“In Western structure, shareholders are supposed to be getting returns, that’s the whole purpose of investing in a company. It does not make sense to invest in a company that makes accumulated losses.”

PM: COMMERCIAL ARMS MUST BE ACCOUNTABLE

Prime Minister and Minister for iTaukei Affairs Voreqe Bainimarama explained that the establishment of a diversified income stream was to provide financial relief to the iTaukei community.

This, by subsidising the provincial rates levied to each community and/or rate payer.

Prime Minister and Minister for iTaukei Affairs Voreqe Bainimarama. Photo: Leon Lord

Prime Minister and Minister for iTaukei Affairs Voreqe Bainimarama.
Photo: Leon Lord

“As shareholders, the Provincial Councils must ensure that effective oversight is provided to these Companies for accountable operations,” Mr Bainimarama said.

“These include mandatory reporting via structured channels both internally and externally, annual general meetings are carried out, robust planning on strategies for sustainable business growth and management of key strategic risks etc.”

He said efforts were in progress to restore, strengthen and maintain the cordial business relationships between the Provincial Councils and its commercial arms.

He gave the example of the Macuata Provincial Council.

It is now injecting $70,000 into the Council on an annual basis, reducing the provincial rates target from $1,000.00 to $500.00 per village.

“Gradually, the collaborative dialogue approach by iTaukei Affairs Board, Provincial Councils and Provincial Companies is expected to rear the initial set-up intent to fruition in the near future,” Mr Bainimarama said.

Edited by Rosi Doviverata

Feedback: ivamere.nataro@fijisun.com.fj

Screenshot 2021-09-21 at 3.12.04 PM



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