MP in K1 million DSIP fraud: The State -v- Phillip Kikala

The four charges

Count 1: Phillip Kikala of Aiaka Village, Lagaip, Enga Province was charged that he between the 1st day of March 2012 and the 31st day of March 2012 at Port Moresby and Enga Province in Papua New Guinea dishonestly applied to his own use and to the use of others the sum of Seven Hundred and Ninety Thousand Kina (K790,000), the property of the Independent State of Papua New Guinea.

Count 2:  The said Phillip Kikala of Aiaka Village, Lagaip, Enga Province was charged that he between the 1st day of March 2012 and the 31st day of March 2012 at Port Moresby and Enga Province in Papua New Guinea dishonestly applied to his own use and to the use of others the sum of Eighty Thousand Kina (K80,000) the property of the Independent State of Papua New Guinea

Count 3:  The said Phillip Kikala of Aiaka Village, Lagaip, Enga Province was charged that he between the 1st day of April 2012 and the 30th day of April 2012 at Port Moresby and Enga Province in Papua New Guinea dishonestly applied to his own use and to the use of others the sum of One Hundred and Twenty Eight Thousand Kina (K128,000), the property of the Independent State of Papua New Guinea

Count 4:  The said Phillip Kikala of Aiaka Village, Lagaip, Enga Province was charged that he between the 1st day of May 2012 and the 30th day of May 2012 at Port Moresby and Enga Province in Papua New Guinea dishonestly applied to his own use and to the use of others the sum of One Hundred and Nine Thousand Kina (K109,000), the property of the Independent State of Papua New Guinea

The allegations

It was alleged between 2007 and 2012 the accused was the sitting Member of Parliament for the Lagaip-Porgera Open Seat, in Enga Province. As the MP for the District he was also the Chairman of the Joint District Planning and Budget Priorities Committee (JDP&BPC).

On 19 January 2011, the accused registered a company with the Investment Promotion Authority under the name West Rural Industries Limited. On 6 May 2011 he opened the company account with the Bank South Pacific (BSP) under account name West Rural Industries Limited Account Number 103380431 for which he was the sole signatory.

On 18 July 2011 there was a purported JDP& BPC meeting. The Chairman informed the committee members that there was a K1,000,000 DSG (District Support Improvement Grant) for the District for the year 2010 and 2011 which had not been used. The JDP and BPC resolved to spend the grants and resolved that West Rural Industries Limited be a recipient of some of the funding.

On 25 February 2012 Lagaip-Porgera JDP & BPC purportedly convened a special meeting No 2 of 2012 and it was at this meeting that the JDP & BPC members agreed that West Rural Industries Limited would take over the contract of Building Pyrethrum and Potato processing staff houses for an allocated amount of K500, 000. This purported meeting was never convened as members of the JDP & BPC committee did not attend.

In late February 2012, various documents were submitted by the accused to the Department of Rural Development and Implementation to justify the release of funding. These documents included:

1. Lagaip-Porgera JDP& BPC meeting minutes and resolutions;
2. Tender Documents;
3. Letters drafted by Philip Kikala.

It was upon the written instructions of the accused that the funds should be paid to the West Rural Industries Limited and not the District Treasury Account as was the normal process.

On 2 March 2012, cheque number 14553 was raised by the Department of Implementation and Rural Development (DI&RD) and paid to West Rural Industries Ltd for the sum of K790,000 being for payment for staff houses for the food processing plant. The cheque was deposited into the account of West Rural Industries on 6 March 2012. No acquittals were received for this fund and no projects done. The monies were paid from the Districts DSIP funds.

On 21 March 2012 cheque number 14734 was paid to West Rural Industries Ltd for the sum of K80,000 for construction work on a chicken house project. This cheque was deposited on 22 March 2012 into West Rural Industries bank account. This payment was also from the District DSIP funds.

On 19 April 2012, another cheque in the sum of K128,000 was paid again to West Rural Industries Ltd by cheque number 14886. This payment was for project management fees. This payment was paid from the Districts Discretionary Grants.

On 8 May 2012, a cheque for the sum of K109,100 for technical and consultation services was paid to West Rural Industries Ltd. This payment was deposited into the bank account of West Rural Industries on 24 May 2012. The payments were made from the Districts Discretionary Grants. None of these funds were ever acquitted and no projects done.

It was alleged that when the cheques were paid to the accused’s company account on those four different occasions; that is a sum of K790,000; K80,000; K128,000 and K109,100 for housing projects; chicken house project and for consultation and project management fees; the accused did not use the monies for the intended purpose rather diverted and dishonestly applied the monies to his own use and the use of others thus contravening section 383A (1) (2) of the Criminal Code Act.

The findings

The accused did not dispute that West Rural Industries was his company and that it had received the payments as alleged but claimed the monies had been used for their intended purposes.

He claimed the funds were paid direct to his company by the Department of Rural Development and through the District Treasury as would be the normal practice, because if they had gone to the District Treasury they would have been misused by the district and provincial public servants.

He also claimed that he was not responsible for acquitting for the funds as that was the responsibility of the District Administrator; a claim the court dismissed as the District Administrator was not aware of the payments and was only responsible for acquitting for funds which were paid through his office.

The court found that the works done and buildings completed had all been done before the monies were received by Mr Kikala’s company and this was in fact a case of ‘double-dipping’ and it was done on the eve of the 2012 elections.

The court found Mr Kikala’s conduct in requesting the funds be paid directly to his own company and not through the district treasury, was ‘glaringly dishonest’.

The court was satisfied beyond reasonable doubt that the defendants actions were dishonest and, all the other elements of the charges having been admitted or not disputed, found Mr Kikala guilty on all four counts.