Augustine Mano: MRDC boss and successful businessman

Curriculum Vitae

Augustine Mano has a Bachelor’s Degree of Economics, Arts and Environmental Science from the University of Papua New Guinea. He also has a Master of Science in Petroleum Economics from the University of Dundee in Scotland. _[1]

He has been Managing Director of MRDC since March 2008. MRDC has major investments in property development and hospitality within PNG, Fiji and Solomon Islands.

Previously, Mr. Mano was a consultant with the Department of Petroleum & Energy on major petroleum projects in PNG.

Mr. Mano also serves as Chairman and Director in a number of entities, including MRDC and related companies, Hevilift Group, Insurance Pacific and Pearl Resort. Mr. Mano has been a Non-Executive Director of Bank of South Pacific Limited since August, 2014 and a Non-Executive Director of Airlines of Papua New Guinea Limited since March, 2010.

_{[1] Bank South Pacific website, http://www.bsp.com.pg/About-Us/Board-of-Directors.aspx accessed on 29 May 2017}

Corporate Network

In addition to his full-time position as Managing Director of MRDC and numerous Board positions, Augustine Mano has built a considerable business empire involving more than 20 companies registered in PNG, several businesses in Fiji and at least one company registered in Hong Kong.

_{Network Map: Companies linked to Augustine Mano}

Augustine Mano is the sole director and shareholder of SMA Investment Limited, which was registered in 2003.

Through SMA Investment Limited, Augustine Mano owns a 50% stake in the high profile contracting business Civil Contractors Pacific Limited – more commonly known as CIVPAC.

_{Image: A screen shot from the CIVPAC website}

SMA Investment paid K6.5 million for 50% of the shares in CIVPAC in June 2015.

Through SMA Investment and Civil Contractors Pacific, Mano owns:

• 50% of Papuan Drilling Limited. Although incorporated in 2011, Papuan Drilling has never filed an annual return.
• 50% of Terra Resources Limited, a company incorporated in 2014. Like Papuan Drilling, Terra Resources has never filed an annual return but in July 2015 it did borrow K146,467.83 from First Investment Finance to buy a new Toyota Land Cruiser.

SMA Investment also owns a:

• 50% stake in Leisure Holidays and Travel Limited. The other 50% is owned by a company called Richos Limited.

The Directors of Leisure Holidays are Augustine Mano and Sundaram Srinivasan. Srinivasan is the owner of Richos Limited, which holds the other 50% stake in Leisure Holidays. SMA Investment and Richos bought Leisure Holidays in 2007.

Additionally, Srinivasan owns Bogasi Limited, which holds a 50% stake in Civil Contractors Pacific. Mano paid Bogasi Limited, K6.5 for his stake in that company.

Bogasi Limited is the company that, according to information supplied by MRDC to the Auditor General, provided a loan to SMA to purchase a Toyota Landcruiser for Mr Mano in 2008 when he took up his position as Managing Director of MRDC.

Manu and Srinivasan are also linked through Vixen No.28 Limited. Mano’s company SMA Investment was previously the joint owner, with a company called Sumadest Limited, of Vixen No.28. SMA sold its half share in Vixen to Sumadest in 2015. Sumadest is owned by Sundaram Srinivasan. Previously, it was Sumadest that bought Vixen No.28 in 2007 and sold half to Mano via SMA Investment in 2008.

SMA Investment is also the joint owner of Yawenaik Holdings Limited. Sanamo Group Limited own the other 50%. Sanamo is owned by Joseph and Malcolm Kobol.

Yawenaik Holdings was registered in 2011, but has never filed an annual return.

Mano, through SMA Investment, is the sole owner of Davara Estates Ltd – a company registered in February 2016.

Mano, through SMA Investment is also the majority (51%) owner of Handy Group Limited.

_{IMAGE: A screen shot from the Handy Group website}

The other shareholders in Handy Group are Joyce Mano (24%), Liquid Investments Limited (20%) and Thomas Dara Ola (5%). Liquid Investments is, in turn, owned by Jesse Mano – so the Mano family control 95% of Handy group (and its subsidiary companies).

Handy Group is the sole shareholder in Handy Finance which, according to its latest annual return, has 18 full time and 3 part-time employees. The company provides personal loans. There is also a Handy Finance operating in Fiji, which as well as personal loans offers hire purchase financing and business loans. According to its website, Joyce Mano is the Executive Director and it has been reported the company has more than 6,000 personal clients.

Handy Group is also the sole shareholder in Handy Construction, which has forgotten to file an annual return since 2011.

Handy Group also owns 51% of the shares in Genesi Asset Management. The other shareholders are the Fijian based Genesi Asset Management Limited (44%) and Morning Star Ltd (5%). Fijian’s Josaia Gucake and Atunaisa Koto, own the Genesi name in Fiji.

The Handy Group also owns 60% of the shares in Genesi Shipping. The Fijian company with the same name, Genesi Shipping Ltd, owns the other 40%.

Jesse and Joyce Mano and Josai Gucake and Atunaisa Koto are all Directors of the PNG registered Genesi Shipping.

Handy Group also own 51% of the shares in Genesi Investment. The other shareholders are the Fijian Genesi Asset Management Limited (44%) and Morning Star Ltd (5%). Jesse and Joyce Mano and Josaia Gucake and Atunaisa Kotoare are among the directors.

Handy Group is the sole owner of Handy Properties Limited, which changed its name from Better Homes Limited in December 2016. Handy Group acquired Better Homes in 2009 – from its previous owners, Augustine, Joyce and Jesse Mano!

Augustine Mano was also previously a minority (25%) shareholder in PNG E Trade with Tommy Tomscoll (45%) Joe Karl Ala (14%) and Albert Conrad Mellam (8%) and David Kavanamur (8%). The company was deregistered in 2006.

Augustine Mano is the joint owner with Joe Karl Ala of Sulap Security Services. The Company was registered in 2000 but has failed for 16 years to file an annual return.

Augustine Mano is possibly also the owner of Eminent Services Limited. The sole shareholder in Eminent Services is listed as EMS-Eminent Limited, a company registered in Hong Kong. There appears to be no such company as EMS-Eminent registered in Hong Kong, but there is an Eminent Services Limited registered there, with an Augustine Mano as sole shareholder and sole director.

Augustine Mano is also a director of INSPAC (PNG), together with Madiu Andrew, Sundaram Srinivasan and Dickson Tasi. According to the Handy Group website, INSPAC is part of the Handy Group of companies.

The Handy Group website also lists Black Meridian Watchers in as another member of the Handy Group. Black Meridian Watchers Security Limited is owned by Joyce Mano.

Augustine Mano is also the sole director and owner of SMA Enterprises Limited, registered in October 2016.

Finally, Augustine Mano is also a director, in his role as MRDC MD, of Hevilift, PNG Air, PNG Ground Services and a whole heap more companies MRDC has invested in.

SUMMARY

• Augustine Mano owns SMA Investment Limited (SMA)
• Augustine Mano, through SMA, owns Davara Estates Ltd
• Augustine Mano, through SMA, owns 51% of Handy Group Limited (Joyce and Jesse Mano own another 44%)
• Augustine Mano, through SMA and Handy Group, owns Handy Finance Limited
• Augustine Mano, through SMA and Handy Group, owns Handy Construction Limited
• Augustine Mano, through SMA and Handy Group, owns Handy Properties Limited (formerly known as Better Homes Limited)
• Handy Group, through its website, also claims ownership of the Handy Finance and Handy Homemart businesses in Fiji, INSPAC (PNG) Limited and Black Meridian Watchers Limited.
• Augustine Mano, through SMA, owns 50% of Civil Contractors Pacific Limited (CivPac)
• Augustine Mano, through SMA and CivPac, owns 50% of Papuan Drilling Limited
• Augustine Mano, through SMA and CivPac, owns 50% of Terra Resources Limited
• Augustine Mano, through SMA, owns 50% of Leisure Holidays and Travel Limited
• Augustine Mano, through SMA, owns 50% of Yawenaik Holdings Limited
• Augustine Mano owns 50% of Sulap Security Services Limited
• Augustine Mano, through SMA and Handy Group, owns 60% of Genesi Shipping Limited
• Augustine Mano, through SMA and Handy Group, owns 51% of Genesi Asset Management Limited
• Augustine Mano, through SMA and Handy Group, owns 51% of Genesi Investment Limited
• Augustine Mano, owns SMA Enterprises Limited
• Augustine Mano owns Eminent Services Limited (a company registered in Hong Kong)
• Augustine Mano possibly owns Eminent Services Limited (registered in PNG)
• Augustine Mano owned 25% of PNG E Trade until the company was deregistered.

MRDC boss cited three times for possible tax evasion

The Mineral Resource Development Company (MRDC) is a State owned entity that manages landowner equity interests in mining and petroleum projects on behalf of landowner companies. Augustine Mano has been the Managing Director since March 2008.

In his report for 2009, the Auditor General recorded his concern that Augustine Mano was avoiding paying tax on K600,000 a year, 80% of his total remuneration:

I noted that a “Professional Services Agreement” was signed on the 15th of May, 2008 between MRDC and the Managing Director as the “Incumbent Professional” of SMA Investment Limited “the company.”

SMA Investment Limited [see SMA and Linked Companies above] is a Papua New Guinea registered company owned by Augustine Mano as the sole shareholder.

The Auditor General’s report continues:

Section 4 of the contract states that MRDC will pay the Managing Director and SMA Investments Limited a monthly fee of K62,500 (K750,000 annually, GST excl.) based on an invoice provided by SMA Investment Limited.

However, the Managing Director had written to the payroll division of MRDC advising that his package be structured into two components; where K150,000 was to be paid as salary to him through the MRDC payroll and K600,000 was to be paid to SMA Investments Ltd at K50,000 per month. The K50,000 monthly payment to SMA was divided into Housing (K20,000), Vehicle (K20,000) and other allowances (K10,000).

A managing director or director of a company is always a natural person. The Managing Director of MRDC is an employee of MRDC. All benefits of any employees are classed as salary and wages and must be taxed according to the tax rules applicable. The current arrangement of the Managing Director can be viewed as a measure to reduce or evade tax.

Should MRDC continue to allow this, the IRC can deem the payments as net of tax and demand MRDC to pay the tax. There are penalties for both the employer and employee pursuant to Section 361 of the Income Tax Act, 1959. Such a scenario can lead to undesirable consequences for both parties.

I recommended to the management to seek independent tax advice from reputable accounting firms immediately on the consequence of this arrangement and assessment of the underpayment of tax.

The management should withhold making the monthly payments to SMA until the tax advice has been sought.

Tax packaging of the Managing Director’s salary and wages should then be done following this advice.

_{Network Map: Augustine Mano | MRDC | SMA Investment Limited}

The Auditor General report records that Management responded to his concerns by saying the salary packaging was done “to cater for his current needs… as opposed the view that this was done to evade tax”.

According to the Auditor General, management claimed this “is an acceptable practice. It was applied with previous Managing Director’s and there were no issues raised in either the previous audits or the tax office to-date. Management will, however seek independent tax advice to confirm the above arrangement”.

But in 2011, the Auditor General found the practice was still continuing and no independent advice had not been taken:

In my 2008 management letter to the Board and management of MRDC, I have raised concern that this arrangement may be viewed as tax evasion. I have recommended in that letter, that the management of MRDC should seek independent tax advice from reputable accounting firms immediately on the consequence of this arrangement and assessment of the under payment of tax.

I also recommended that the management should withhold making the monthly payments to SMA until the tax advice had been sought.

The Management of MRDC had responded to my 2008 management letter points, stating that the restructure was not an attempt to evade tax, but was a normal practice applied by MRDC to cater for the Managing Directors‟ current needs.

Management also agreed to seek independent tax advice to confirm the above arrangement.

However, during the course of my audit of the year ended 31 December, 2009, I have not been provided with any reports compiled by the independent tax advisors to confirm the above arrangement.

The Auditor General’s report continues:

Due to the inaction by the MRDC management to seek further advice and clarification from IRC, I was of the view that the management is deliberately allowing this anomaly to continue.

The Auditor General’s report for 2012 again raises the issue of the tax avoidance and states this was reported to the relevant Ministers in June 2013.

At this point the paper trail dries up. In his 2014 report the Auditor General stated MRDC had failed to submit its financial statements for the years ended 31 December 2012 or 2013 for inspection and audit:

The Company had not submitted its financial statements for the years ended 31 December 2012 and 2013 for my inspection and audit.

The subsequent reports of the Auditor General are not publicly available.

MRDC boss in K6.5 million purchase

According to Investment Promotion Authority records, in June 2015, Augustine Manu extended his network of business interests by paying K6.5 million to buy a 50% stake in the company Civil Contractors Pacific Limited. The company is often referred to as CIVPAC.

Mano purchased the shares in CIVPAC through his wholly owned company, SMA Investments Limited, although documents filed with the Investment Promotion Authority suggest Mano originally intended to make the purchase using an off-shore company registered in Hong Kong.

The contract, prepared by Jema Lawyers, for the purchase of the shares in CIVPAC shows the vendor as Bogasi Investments and the original intended purchaser as Eminent Services Limited. The purchase was supposed to be completed in July 2014.

Eminent Services Limited is a Papua New Guinea registered company with one shareholder, EMS-Eminent, a Hong Kong registered company with its registered address at Level 54, Hopewell Center, Queens Road East, Hong Kong. 

However, the sale of CIVPAC shares to Eminent Services was never completed, despite the company seal appearing on the sales contract. Instead, 12 months after the original intended sale, the contract documents were amended with the name Eminent Services being crossed out and SMA Investments written in (as shown in the image below).

The contract was signed by Augustine Mano as the Director of SMA Investments.

But this was not a simple case of one sale falling through and another purchaser being found as Augustine Mano is not only the owner of SMA Investments, he is also heavily connected to Eminent Services Limited, the first intended buyer.  Augustine Mano is the only registered Director of Eminent Services, is listed as the company Secretary and is the person who applied to register the company in May 2014 (as shown in the image below).

The company registration application for Eminent Services was filed in by Jema Lawyers, the same lawyers who handled the purchase of the CIVPAC share by SMA.

Although the owner of Eminent Services is listed as EMS-Eminent Limited of Hong Kong, there does not appear to be an EMS-Eminent registered in Hong Kong. However, investigations in Hong Kong have revealed there is an Eminent Services Limited registered there, with an address at Level 54, Hopewell Center, Queens Road East (the same address as is given for EMS-Eminent in the company records for Eminent Services Limited). An Augustine Mano from Port Moresby is listed as sole shareholder and sole director of the Hong Kong registered Eminent Services Limited.

It is not known why Augustine Mano originally wanted to use an offshore company to buy his stake in CIVPAC or why he later ditched the idea of buying through Eminent Services and instead used SMA Investment.

Allegations of mismanagement

Augustine Mano has been linked in the literature to various allegations of mismanagement, none of which have been substantiated.

April 2011: PNGBlogs – White Collar Fraud at MRDC

September 2011: PNGBlogs – PMs challenge to fight corruption starts at MRDC

October 201 : PNGExposed – MRDC MD terminated

March 2012: PNGExposed – More details on allegations against MRDC boss