Fincorp practices under spotlight following illegal and ‘unscrupulous’ foreclosure

Fincorp is one of the nation’s largest providers of consumer and business loans. It is owned by Malaysian nationals Kien Joo Kuek (aka Andy Kuek), and Kien Hok Kuek through the holding company Grand Columbia Limited.

Its principal Andy Kuek is open about his ostentatious lifestyle, which stands in notable contrast to many of Fincorp’s customers in Papua New Guinea.

Image: Andy Kuek at a Bentley Owners Club New Years event (source: Facebook)

Image: Andy Kuek at a Ferrari Owners Club event (source: Facebook)

Fincorp hit national headlines last year after criminal proceedings were initiated against one of the company’s Australian executives.

The police charge sheet, The National asserts, states that Fincorp executive Adam Hughes is accused of illegally selling a property owned by Port Moresby businessperson Susan Sei 60% below market value to Solomon Kantha, who at the time was PNG’s Chief Migration Officer. According to PNG Bulletin this occurred during the same period when a deported foreign national was permitted to reenter the country. The deported foreigner is reported to be one of Grand Columbia Limited’s Malaysian shareholders.

Image: Fincorp executive Adam Hughes was held by police last year (Source: Sunday Bulletin)

While the criminal charges remain before the courts, the serious allegations made by Susan Sei places the case of Kae v Mondo & Fincorp [2020] in a much more concerning light.

According to Deputy Chief Justice Kandakasi, Fincorp illegally sold a property owned by local businessperson Edward Kae at Section 2, Allotment 42, Hohola, well below market value.

The commercial relationship between Kae and Fincorp began in November 2012 through the provision of a mortgage to Kae by Fincorp, secured against his Hohola property. Three years later Kae fell into arrears due to his business hitting upon hard times.

According to Justice Kandakasi the plaintiff had repaid the sum of K25,906.36, with K32,940 outstanding. The National Court decision reports that Fincorp then issued a statutory notice for default in the amount of K96,210. It was not served on Kae in breach of section 67 of the Land Registration Act. Justice Kandakasi notes ‘that was not an oversight but deliberate’.  The property was then advertised for sale by tender, and purchased by Kimana Mondo for K250,000.

In echoes of Susan Sei’s allegations, Kae claims this was at a 60% discount, with the market price for the property being K600,000. Once Edward Kae learnt of the sale he initiated legal action.

According Justice Kandakasi: ‘The undisputed fact clearly is that the property was valued at K600,000.00 but was sold under that value at K250,000.00. For the purposes of assessing Kae’s damages, I find that the property was valued at K600,000.00. Fincorp had the duty to ascertain and sell at that or a higher price, a duty it also admittedly failed to discharge’.

Kae’s total damages was assessed by the Court at K503,789.63.

Because in the Judges words ‘Fincorp’s conduct was deliberate or intentional and unscrupulous’, he concluded ‘this calls for a clear pronouncement against such conduct by the imposition of an appropriate level of exemplary damages both as a penalty and as a deterrent to Fincorp itself and others that this kind of conduct or behaviour is unacceptable in our society and must cease forth with’. In total K50,000 in exemplary damages was awarded to Kae.

Were this case an isolated instance it would be a matter of concern. The facts outlined in the case of Edward Kae, however, is given additional importance in light of the State’s criminal suit claiming a senior Fincorp executive conducted an illegal property sale, not simply to recoup outstanding loans but to gain additional benefits.

Nor are these the only red flags.

It has been reported recently in the national media that former MP, Alois Kingsley, is currently fighting fraud charges. According to prosecutors Kingsley conspired with Fincorp owner Andy Keuk to steal shares owned by Andrew Anis valued at over K100 million. The case is ongoing before the courts.

Image: Statutory declarations filed with the IPA by Andrew Anis outline the allegations against Andy Keuk and Alois Kingsley

In an unrelated court case it was noted Fincorp repossessed a Mazda BT50 Single Cab 4×4 from Kombiu Guards and Securities Limited, with K13,107 owing. The vehicle was then sold off to pay the outstanding balance. The purchaser was Alois Kingsley according to an affidavit deposed by Adam Hughes, the man accused of conspiring with Andy Keuk to steal shares belonging to Andrew Anis.

Fincorp did not respond to PNGi’s request for comment.

While it is not clear who inside Fincorp is responsible for the illegal conduct condemned by the National Court, or to what extent Andy Keuk is aware of these actions as a major shareholder and Director, the nature of the allegations against Fincorp create a concerning pattern that ought to interest in theory the Central Bank which is responsible for oversight of licensed financial institutions.