Horizon Oil and William Duma Bribery Scandal: PNGi Verifies Crucial Link

Yesterday a scandal broke in the Australian Financial Review (AFR).

It is alleged that the Australian listed firm, Horizon Oil, paid US$10.3 million to a Papua New Guinea shell company, with ties to the then Petroleum Minister, William Duma, a claim Duma denies.

The scandal begins in 2010. Horizon Oil faced losing valuable gas licenses in PNG, after then Petroleum Minister William Duma claimed it had acted unlawfully. Horizon’s Chief Executive sensed a shakedown: ‘I hesitate to put this in an email but it smells like someone is setting the scene for a handout for a problem that doesn’t exist’.

Lawyers working on the settlement observed, ‘The bad guys want 30%!!!’.

A settlement was reached.

A new license was issued.

The AFR reports: ‘By March 2011 the parties had settled their legal case and Horizon’s stake had indeed been reduced to 70 per cent in the new licence, PRL 21. A local oil and gas company, Dabajodi International Energy (now Kina Petroleum), received 20 per cent, while a hastily restructured shell company, Elevala Energy, received the other 10 per cent’.

Particularly suspicions were aroused by Elevala Energy, a shell company.

The AFR reports: ‘PNG lawyer Simon Ketan became the sole director and shareholder of Elevala just four days before the licence was granted.’.

When questioned, Duma stated he worked with Ketan at a law firm 15 years ago. He opined: ‘I still do not understand the basis for the assertion that Mr Ketan and I are close and that we are politically connected’.

PNGi has evidence which raises question’s over Mr Duma’s statement. In particular Simon Ketan has acted as the personal lawyer for William Duma.

Image: Simon Ketan acts for William Duma in litigation against the estate of Peter Goodenough

It is also worth noting the origins of Simon Ketan’s interest in Elevala Energy.

Ketan purchased the shell company from two individuals.

Image: Elevala Energy Limited Share Transfer

Unaba Daera is the same individual who sold a 50% stake in another shell company, which has been alleged to have been used by Duma to facilitate a major fraud, a claim he again denies.

In this case the share went to Christopher Polos, a man said to be Duma’s brother in law. The company was Kurkuramb Estates, and the scandal was the Manu Manu land fraud.

Image: Kurkuramb Estates Limited Share Transfer

In the instance of Kurkuramb Estates, once the shares were transferred to Polos he acquired a fairly worthless piece of rural land. Then overnight it was valued at K46.6 million, and reacquired by the state to become a central spoke in a plan to move the Lancron naval base.

In echoes of the same good fortune, according to the AFR, once Elevala acquired its 10% stake in this lucrative gas license with Horizon Oil, it flipped the interest. Horizon bought them out for an undisclosed sum. The AFR observe ‘Horizon’s 2011 accounts show acquisition costs of $US12.073 million for the year ended June 30’.

The Manu Manu land scandal was swept under the carpet through a declawed administrative inquiry. If the Horizon scandal arouses the interest of the Australian or US authorities, Duma may be in for some rough sailing.

A note on Simon Ketan

This is not the first occasion lawyer, Simon Ketan, has been embroiled in controversy.

Ketan is linked to another alleged beneficiary of the Manu Manu land fraud, Philip Eludeme. Eludeme is former Chairman of the Central Supply and Tender Board.

Simon Ketan acted for Philip Eludeme and his business associate Jimmy Maladina, in an earlier land deal that would become known as the Waigani land fraud during the famous National Provident Fund Commission of Inquiry.

The Commission of Inquiry alleged that Ketan had removed and falsified evidence before submitting it to the commission, in a bid to protect Maladina.

Ketan would later go on to represent Jimmy Maladina in another land deal found by the courts to be stained by fraud.

That land deal centred on a company PNG Deep Sea Fishing Limited, which Maladina and his wife acquired (Philip Eludeme was a Director of the company from 1996-2010). PNG Deep Sea Fishing had acquired a 99 year state lease over Allotment 5, Section 59, in Alotau. It later turned out the Land Board meeting that granted this lease under the Chairmanship of Sir Ralph Guise, never actually took place.

According to the NPF Commission of Inquiry, Guise, and the then Lands Minister, Fabian Pok ‘were involved in fabricating and gazetting false documents, preparing and signing false Land Board minutes and signing false and fictitious approvals’ (note: Fabian Pok is the third and final high profile individual alleged to have benefited from the Manu Manu land fraud).

Once the fraud became apparent in the state lease award to PNG Deep Sea Fishing, the Milne Bay Provincial Government attempted to regain this illegally acquired property. Maladina launched litigation to frustrate the Provincial Government’s efforts. As a result of Maladina’s actions the Milne Bay Provincial Government was dragged through the courts for 7 years.

The Maladinas were represented by Simon Ketan.

Dismissing the case, Deputy Chief Justice Salika was damning of the plaintiffs:

In this case the plaintiff was aware or ought to have been aware that the purported grant of lease over Allotment 5, Section 59, Alotau was not proper or legal in that there was never a Land Board meeting that recommended the grant of the lease. In my view therefore the matter might have been settled between but instead this protracted litigation was commenced and the defendants were put to unnecessary litigation by the plaintiff and made to incur unnecessary costs. Seven (7) years on the plaintiff has now only come to its senses that it could not succeed and now this application to discontinue the proceedings. The proceedings had no merit right at the outset and yet it took some 7 years to put to bed. In the circumstances, I am minded to award costs to the defendants on a Solicitor/Client basis and I so order.

So in addition to acting as the personal lawyer for William Duma, Simon Ketan it appears has also acted for Philip Eludeme, the other key principal alleged to have benefited from the Manu Manu land fraud. In addition Ketan worked for Eludeme associate Jimmy Maladina, an individual implicated in frauds by the court and NPF Commission of Inquiry, and who was said to be the chief adviser to Peter O’Neill, when the latter served as Prime Minister.