John Pundari: Twenty-five years as an MP and businessman

The Politician

John Pundari has served as the MP for Kompiam-Ambum for twenty of the past twenty-five years. His only election defeat came in 2002, when he abandoned his local constituency and contested the Enga Provincial seat, where he lost out to Peter Ipitas. Five years later, 2007, Pundari was re-elected MP for Kompiam-Ambum, a seat he still holds.

It was in his second term as an MP, following his re-election in 1997, that Pundari first achieved higher office. He was elected Speaker of the Parliament in 1997, a position he held for two—years under the controversial Prime Minister, William [Bill] Skate. Pundari resigned as Speaker in July 1999 and then assisted Mekere Morauta to oust Skate and become Prime Minister.

Pundari was richly rewarded for his switch of allegiance; from July until December 1999 he was Deputy Prime Minister and Minister for Women and Youth, before being sacked by Morauta.

Just months later though, Pundari was back in cabinet, serving as Minister for Lands from April to May 2001 and then Minister for Foreign Affairs from May until October 2001. He and Morauta then fell out again and Pundari resigned.

From 2002 until 2007, as we have already noted, Pundari was out of Parliament following an unsuccessful bid for the Engan governorship.

Following his re-election as an MP in 2007, Pundari became Minister for Mining in 2010, in the government of Prime Minister Michael Somare.

Somare was ousted by Peter O’Neill in 2011, but after the 2012 election, Pundari sided with O’Neill and was rewarded with the Environment Ministry. A position he retained for the full term of the last Parliament and which he returned to after successfully contesting the 2017 election.

Corporate network

PNGi has identified 25 companies which John Pundari has either owned or jointly owned since 1994, and a further 5 where he has had a minority interest.

Pundari currently owns at least 10 companies outright; sold an eleventh company in February 2017; and owns 50 or 51% of a further 7 companies.

In addition, there are a further 12 companies, all now unregistered, which Pundari either owned, controlled or had a minority stake in between 1994 and 2009.

 These now unregistered companies include Foxhaven No.17, which is notable for the involvement of the current Minister for Forests, Douglas Tomuriesa. Pundari owned 51% of the shares in Foxhaven between January and October 2000; a period which coincided with the appointment of Tomuriesa as one of only two directors. Although Pundari sold his shares in October 2000, Tomuriesa continued as a director until the company ceased trading in 2006.

PNGi has only found one company in which Pundari seems to have served as a director without also owning a share; Salapkai Limited. However, Pundari’s ownership cannot be ruled out as the IPA records are very deficient and do not reveal who the company’s owners were. The company was deregistered in October 2009. Until that time Pundari’s fellow directors included Doris Pundari and the infamous accountant, Rex Paki.

John Pundari has also registered at least three business names – Millenium Guards, Millenium Transport and Electronic Security Systems.

Assets

It is impossible to give an accurate assessment of the value of Pundari’s business interests as the information on the public record is woefully incomplete.

Of the seventeen companies Pundari owns or jointly owns, only three, according to Investment Promotion Authority records, have ever filed their annual returns, as the table below illustrates.

Even where Annual Returns [ARs] have been filed, there are reasonable grounds to question their accuracy. For example, the ARs for Millennium Guards show some highly unusual repetition that defies any logical explanation other than the possible filing of inaccurate data. To illustrate, as the table below shows, the ARs for 2003, 2004 and 2005 all have identical numbers for employees (200), assets (K235,023) and liabilities (K250,326). The ARs for 2012, 2013 and 2014 have identical assets (K29,941,652) and employee numbers (1,780).

The three companies that have filed annual returns have substantial net assets – more than K28 million. It is likely this figure is just a fraction of Pundari’s net wealth, given there are a further fourteen companies unaccounted for.

The graph below shows how the net assets of one of Pundari’s companies, Millennium Guards, have more than doubled since 2011, from K10 million to more than K22 million.

International flavour

Pundari’s company ownerships include three with an international flavour. Yangoe Investments Limited, Halcyon Limited and Jo-Ans Limited are all co-owned with foreign nationals – from China/Korea, Australia, Malaysia and the Philippines.

John Pundari owns 51% of the shares in Yangoe Investments, a company registered in 2010. Pundari’s partner in the business is the Chinese national Gao Guanghao. Guanghao owns 49% of the shares and he and Pundari are the only directors. The company has never filed an annual return.

There seems to be some question though over Gao Guanghao’s real nationality. Gao Guanghao also owns the PNG registered company, Hytera PNG Limited, where he also declares his nationality as Chinese. A Guang Hao Gao (same date of birth) also owns 20% of PNG Foods Corporation Limited, where he is listed as a Korean national, and 50% of P.A.C.K Trading Limited, where he is also listed as Korean. As Gao Tom Guanghao (same date of birth, Chinese national) he owns 5% of K&P Yoolim Logging Master Ltd.

Pundari also owns 50% of the shares in Halcyon Limited, through his wholly owned company, Millennium Guards Limited. The other 50% of the shares in Halcyon are owned by the Australian registered company, W.E. Johns and Sons Pty. Ltd. W.E. Johns has recently [October 25, 2017] been deregistered in Australia. It was previously variously owned by the Cruwys, Molyneux and Boucousis families.

Jo-Ans Limited is majority owned by Anicia Santiago and Yung Lee Man. John Pundari owns just 2% of the shares. However, when the company was registered in 2005, Pundari was the majority owner with 51% of the shares and Santiago, a Filipino, held the other 49%. In 2009, Pundari sold the majority of his shares [49 of 51] to Man, who is Malaysian.

Recent registrations

Pundari has been Minister for Conservation, Environment and Climate Change since 2012. He has not allowed high office and his duties as Minister to interfere too much with the expansion of his business empire.

Since February 2014, Pundari has registered seven new companies.

These new companies cover a broad range of industries; they include a travel business, two security companies, a medical centre, a real-estate company, a taxi firm [which Pundari sold in February 2017] and a security training college.

Security industry

The security industry is booming in PNG; a sad consequence of the crime and violence fuelled by inequitable growth and widespread corruption.

It is claimed* the industry is now worth as much as K1 billion a year and the number of security companies has almost tripled in the last decade with 474 operating in the country in 2016.

Mr Pundari has captured some of this growth. Mr Pundari owns or jointly owns at least six security companies, three of which he has registered in the last four years.

Security is a large and profitable part of Pundari’s business empire. Millennium Guards was employing 1,780 people in 2015 and had net assets of over K22 million.

Among Millennium’s clients are Malaysian logging giant, Rimbunan Hijau. Millennium Guards provides security services at both the RH Hypermarket / Grand Palace Restaurant complex in Waigani and at RH’s corporate headquarters on Kennedy Road.

Pro-Secure Limited was only registered as a company by Mr Pundari in January 2016, but it has already picked up the prestigious contract to provide security at RH’s Vision City shopping mall and cinema complex.

Dixie's Bungalows

Dixie’s Bungalow resort ‘offers a restful ambiance, welcoming and peaceful friendly environment’ on the outskirts of Port Moresby. The resort is ‘located in a lush tropical gardens on the banks of the Laloki river below Mt. Hombrum at the foot of the Sogeri plateau’. It offers ’16 executive suits, premier rooms and Bungalows with swimming pools, river and pool side barbecue areas’ together with conference rooms, restaurant, canteen/coffee shop and a shuttle bus to and from the city and airport.

Little wonder this tropical oasis has become a favoured location for the seminars, workshops, conferences and trainings so beloved of the international aid community. Australian Aid, the United Nations Development Program, World Bank and International Labour Organisation all run or fund multi-day events at the venue.

It is also utilised by government departments.

But there is a little bit of mystery about the ownership of Dixies as the name Dixie’s Bungalows or Dixie’s Resort, appear nowhere in the PNG registry of companies or the registry of business names. The resort is in fact owned and operated by Kaipal Investment Limited, as anyone who has had to pay a bill at Dixies will know and the invoice below illustrates.

Kaipal Investment Limited is, of course, owned by John Pundari. Which helps explain why his daughter Jemimah, is the current General Manager at Dixie’s [as well as the Millennium Group and Millennium Guards]; and that position was previously filled by her older sister, Abigail.

Conflicts of interest

There is of course nothing illegal about an MP or government Minister owning shares in a private business, but such ownerships do raise important legal and moral questions.

In Papua New Guinea, Section 27 of The Constitution, Responsibilities of Office, requires:

(1) A person to whom this Division applies has a duty to conduct himself in such a way, both in his public or official life and his private life, and in his associations with other persons, as not–

1. to place himself in a position in which he has or could have a conflict of interests or might be compromised when discharging his public or official duties; or
2. to demean his office or position; or
3. to allow his public or official integrity, or his personal integrity, to be called into question; or
4. to endanger or diminish respect for and confidence in the integrity of government in Papua New Guinea.

(2) In particular, a person to whom this Division applies shall not use his office for personal gain or enter into any transaction or engage in any enterprise or activity that might be expected to give rise to doubt in the public mind as to whether he is carrying out or has carried out the duty imposed by Subsection (1).

In addition the Leadership Code makes very clear in Section 8 – Shareholdings:

A leader, his spouse or any children under voting age who hold shares or investment in any company and by holding shares the leader could reasonably be expected to be placed in a conflict of interest situation or might be compromised in the discharging of his duties, is Guilty of Misconduct in Office. Prior to obtaining shares or investment the leader must seek approval from the Ombudsman Commission.

In this context is also worth reflecting on the words of the Constitutional Planning Committee:

‘A leader’s loyalty to his office must spring from his genuine concern for his country.  It is always expected of a patriot that he will put his country’s interests before his own.  In the event of any conflict of interests, the interests of the people he serves must prevail over his own personal interest.  The higher the office held in the state, the more serious the office-holder’s responsibility.  The greater the power, the greater the obligations of the person holding the powerful position.  The power he holds is not meant to be for his own honour and fame; much less is it for his own material aggrandisement.  The power he holds is for the betterment of the citizens of Papua New Guinea.’

‘We wish to avoid misunderstanding.  We are not proposing a code of conduct to divorce our leaders from every field of business activity or professional interest.  In fact, no leader is worth his name if he is not in tune and in touch with the social and economic concerns of his people.  But a leader should not place himself in a position where he may well have a conflict of interest due to his shareholdings or business activities, nor should he use his position to gain rewards or benefits which he would be unlikely to obtain if he were not in a position of leadership.’ [emphasis added]

Whether or not John Pundari has broken the letter of the law or the spirit in which the laws were written is for others to judge and determine. We can merely point out that surely there are legitimate questions to be asked when an Environment Minister owns companies that work for largest logging company and and newest oil palm plantation operator; equally legitimate are questions about how a Minister, who owns multiple security companies, recuses himself from any cabinet decision making on issues relating to law and order and the funding of the whole criminal justice system when those decisions could impact his own businesses; and how does a government Minister handle his relationship with other government departments, important aid donors and multilateral organisations like the United Nations when all use his privately owned resort for official business?

Allegations

Twenty-five years a politician and almost as long in business, it is not surprising John Pundari has attracted some pretty vehement allegations of corruption and other wrongdoing.

These stories from PNG Blogs give a flavour of those accusations:

• WHITE SNAKE JOHN PUNDARI’S MANIPULATIONS OF 2017 ELECTORAL PROCESS REVEALED
• PUNDARI’S BROAD DAY-LIGHT ROBBERIES OF KOMPIAM AMBUM FUNDS REVEALED.
• WHITE SNAKE PUNDARI SLEDGING PUBLIC FUNDS INTO KAIPAL KINGDOM INVESTMENT LIMITED
• JOHN “BOTTOM FEEDER” PUNDARI HAS EMERGED FROM THE SEWERS OF WAIGANI

PNGi has no information to corroborate any of these stories or allegations, and would remind readers that until they are properly investigated and tested they remain unproven and unsubstantiated accusations.

Pundari has also faced at least two court petitions challenging his election victories.

In 1997, his opponent Kelly Kalit alleged various illegal acts, errors and omissions and corrupt practices by the Electoral Commission on its own or in collusion with Pundari and bribery and undue influence by Pundari or by his agents. The challenge was ruled ineligible by the Supreme Court as it was filed one day out of time.

In 2012, Pundari’s election victory was challenged by Lucas Neah. The challenge was unsuccessful but the case appears to be unreported.

Conclusion

John Pundari is one of Papua New Guinea’s longest serving Members of Parliament and has held multiple senior positions in different governments across a 25-year career. He is also, obviously, a successful businessman.

In 2017, PNGi exposed the extensive business network owned by the Prime Minister, Peter O’Neill and how that empire has grown throughout his long political career.  John Pundari would appear to be another politician whose career epitomises the blurring of the lines between politics and business and the fluid way in which, in Papua New Guinea, the two seem to go hand in hand.

When private commercial interests and powerful public office sit side by side in one set of hands the opportunities for abuse and the temptations to bend the rules are obvious.

What is very much less clear is whether Papua New Guinea has all the necessary laws in place and enforcement mechanisms that are sufficiently independent and robust to ensure that abuses do not occur or are quickly identified and dealt with.

Much more openness and transparency around the private and beneficial interests of MPs and senior public servants and public procurement decisions, together with whistleblower protection and freedom of information laws could go a long way to addressing these concerns.