New Vice-Minister for State Negotiations Comes with a Foreboding Past

The newly elected first-time MP, Jimmy Maladina, a man once described by Justice Sakora as the ‘manipulative member’ of a ‘conspiratorial criminal cabal’, has been quickly elevated up the parliamentary ranks by the Prime Minister. Prime Minister Marape recently announced Maladina has been appointed Vice Minister for State Negotiations. 

It is a role to which Jimmy Maladina could be well suited given that, as private citizen, Maladina has a  proven track record when it comes to playing the middle-man role in arranging State contracts for large corporations and being richly rewarded for his efforts, even if some have accused him of using duress to line his own pockets.

Equally as worrying is the fact Jimmy Maladina has been placed at the centre of fraudulent and illegal land deals involving state leases, in a range of public inquiries.

Maladina has also previously admitted, and expressed his remorse, for defrauding National Provident Fund contributors in his role as Chair of the NPF Board, although his criminal conviction in relation to those matters was eventually overturned by the Supreme Court.

In this PNGi report we review some of the State contracts that Jimmy Maladina has previously been involved in and the companies he has dealt with and we look again at some of his questionable land deals and the fallout from the NPF Commission of Inquiry.

New Waigani Court Complex

Jimmy Maladina says he is owed K42 million for his role in securing the construction contract for the yet to be completed new Waigani Court Complex in Port Moresby.

In 2020, PNGi revealed Jimmy Maladina’s claim that, through his company Flavalea Limited, he is owed K42 million by the China Railway Construction Engineering Company for his role in securing them the contract to build the new Waigani Court Complex.

That contract is worth just under half a billion Kina, with a price tag of K427 million.

According to Maladina, in 2015, his wholly owned company, Flavalea Limited, signed a referral contract with China Railway Construction under which the Chinese company would pay 10% of the value of any work that Flavalea secured for the company.

China Railway does not deny the existence of the agreement, but claims it was signed under conditions of duress. According to evidence filed in court by China Railway’s in-house legal officer, George Atoa, China Railway’s then Managing Director Mr Sheng Liu,

…Admitted to signing the Referral Agreement with the Plaintiff Company’s Managing Director and sole shareholder, Mr. Jimmy Maladina, but says that at that material time, he was under duress to sign the agreement as he was advised by the Plaintiff company’s director Mr. Jimmy Maladina that if he (Sheng Liu) refuse to agree to and sign the referral agreement then the Plaintiff’s director will use his networks within the tender bid screening committee to remove the Defendant company at the early stage of the bidding process.

It is not known if the court case between Jimmy Maladina and China Railway has been resolved. But the fact as a private citizen Maladina was receiving substantial fees from companies in return for securing them State contracts that were supposed to be awarded through an independent and transparent bidding process, raises serious red flags over his recent appointment to a political position in which he will oversee such arrangements.

Add in the serious allegation that, in effect, Jimmy Maladina ran an extortion racket, using his influence over public procurement to obtain a substantial payoff should surely make his new position untenable, at least until the allegations are investigated and tested in court?

This is especially so, given that the China Railway / Waigani Court Complex case is not the only example on the public record of Jimmy Maladina earning substantial fees for arranging State contracts.

UBS - another handsome payoff

The now infamous UBS loan, taken out by the government of Peter O’Neill to fund the purchase of shares in Oil Search Limited, was an unnecessary disaster according to the recently completed Commission of Inquiry and led to enormous losses of K862 million.

Those losses have all be borne by ordinary taxpayers. But there was a select group of companies and individuals who profited very handsomely from the loan deal. One of them was Jimmy Maladina.

The Commission of Inquiry has revealed that Jimmy Maladina was paid K1 million by the State through the offices of the Pacific Legal Group where Maladina was engaged as a consultant.

According to the Commission findings ‘this payment [to Mr Maladina] has been described as being both a referral fee and a fee for services’. 

Lawyers assisting the inquiry have noted of the the fee paid to Mr Maladina, ‘there is no evidence of work by him that would justify a fee of this amount although he sought to explain it by saying it reflected a longer period of work’.

Readers with longer memories will also remember Jimmy Maladina was at the centre of the National Provident Fund scandals in the late 1990s.

National Provident Funds Scandals

According to the NPF Commission of Inquiry, in the late 1990’s, Jimmy Maladina orchestrated a number of criminal conspiracies which defrauded the National Provident Fund and its members of millions of Kina.

Some of the frauds involved a land valuer, Iori Veraga. Veraga charged excessive fees for work done for the NPF, and overvalued a piece of land owned by Maladina that the latter planned to sell on to the NPF for an exorbitant price. In 2005, Veraga was found guilty on six counts of conspiring with Maladina and misappropriation and he was sentenced to six years jail with hard labour.

Although the court found Veraga personally received K27,455 while Maladina netted K117,500, and Veraga played a ‘secondary’ role while Maladina “called the shots” and “pulled the strings” as the “manipulative member of the conspiratorial criminal cabal”, Veraga was the only one prosecuted. Maladina was never convicted or sentenced for these crimes.

In the words of Justice Sakora:

Jimmy Maladina would appear to have been the manipulative member of the conspiratorial criminal cabal, the one person, in a classic ‘chain conspiracy’ who “called the shots”, as it were. The one person who “pulled the strings” as if a puppeteer. These are conclusions properly drawn from the evidence at the trial

The judge also noted, Maladina “appeared to have had the ears of what may also be colloquially termed ‘the movers and shakers’ in the highest echelons of government”.

This influence may help explain why Jimmy Maladina was not prosecuted for his role, according to the Commission of Inquiry in ‘bribing Land Board chairman Ralph Guise and Lands Minister Viviso Seravo’ to ensure Waim No.92, a company Maladina secretly owned, was granted a lease of a parcel of land in Waigani ‘on very favourable terms’.

Those terms, claims the Commission of Inquiry, included a reduction in the purchase price of K1,142,000 and a drop in the annual rental from K143,000 to just K17,000.

The Commission also concluded Maladina arranged for the new Lands Minister, Dr Fabian Pok to be bribed.

Dr Pok subsequently received the benefit of a motor vehicle and the sums of K10,000 for his part in this fraudulent scheme.

The Commission continues:

Dr Pok also appears to have received the sum of K220,000 to his company, Biga Holdings, which was received from Mr Maladina’s Niugini Aviation Consultants company in Hong Kong (which payment should be referred to the Ombudsman Commission for investigation).

Maladina’s political connections though were not enough to prevent him from being convicted for another conspiracy. The National Court found that as Chair of the NPF Board Maladina defrauded the fund of K2,650,000 by organising overpayments for the NPF tower construction costs.

Maladina was able to delay that conviction for more than a decade, first by relocating to Australia, and then employing various legal challenges. The prosecutors too, seemed to drag their feet, all of which played to Maladina’s advantage when it came to sentencing.

The court placed great weight on the facts that the monies Maladina had stolen had been paid back (although the court seemed unaware not by Maladina personally but by a benefactor, who later claimed the money was outstanding consultancy fees owed to Maladina), others involved in the conspiracy were never charged (although that did not play so well for Veraga in his earlier case), and the long delays between the offence and sentencing.

As a result, Maladina received a suspended jail sentence and was placed on a good behaviour bond for two years.

Despite the fact that according to a pre-sentencing report, Maladina openly admitted the offences and expressed his remorse, his conviction was subsequently overturned on the grounds of a lack of evidence.

Another fraudulent land deal

The NPF scandal is not the only time Jimmy Maladina has been identified in a public inquiry over his alleged involvement in fraudulent land deals.

In 2018, PNGi revealed another long-buried land scandal involving Jimmy Maladina dating back to 1999.

At its centre is a Land Board Meeting, No.2017, which the Public Accounts Committee has described as “the most blatant example of fraud and criminal activity by the Land Board and certain of its Members”.

Evidence before the Public Accounts Committee, the Finance Department Commission of Inquiry and the National Court, suggests the meeting never actually took place. Nevertheless it was this meeting that purportedly awarded a 99-year State Lease to a company, PNG Deep Sea Fishing Limited. The leased land was located on the waterfront in Alotau, Milne Bay Province.

It is alleged the Board Chairman, Sir Ralph Guise, was bribed by Jimmy Maladina and evidence uncovered by PNGi strongly suggests that PNG Deep Sea Fishing was in fact controlled at the time by Maladina and his wife Janet Karl.

When the Milne Bay Provincial Government attempted to claw back the illicitly obtained property from PNG Deep Sea Fishing, Maladina and his wife formally acquired the company’s shareholdings and initiated seven years of litigation against the Provincial Government before finally admitting defeat  in 2014.

The judge with conduct of the case was so unimpressed with Maladina’s pursuit of the claim that he awarded costs against him on a punitive Solicitor/Client basis.

Despite the damning findings of three separate inquiries, the Finance Department Commission of Inquiry, the NPF Commission of Inquiry and the Public Accounts Committee, that the Land Board meeting No.207 was tainted by fraud, corruption and criminality, there is no evidence of any police inquiry ever taking place or any criminal charges being laid.


There were probably plenty of wry smiles at the news Jimmy Maladina has been appointed a Vice Minister in the Marape government.

As well as its meaning of ‘second in charge’, ‘vice’ is a word that can also describe illegal or immoral behaviour.

In the case of Jimmy Maladina, there is a considerable body of evidence on the public record, carefully curated by judicial authorities, pointing to illegal and immoral behaviour.

The former Managing Director of one of PNGs largest companies, a company awarded government contracts worth more than K4 billion, has accused Jimmy Maladina of running an extortion racket – using threats and duress to secure a substantial payoff for using his influence over public procurement to secure the company government contracts.

The National Court has described Jimmy Maladina as the “manipulative member of the conspiratorial criminal cabal” in relation to his role in selling over-valued land to the National Provident Fund.

A Commission of Inquiry has found Jimmy Maladina bribed a Land Board Chairman and two Lands Ministers to secure a State lease “on very favourable terms”.

Jimmy Maladina was also at the centre of another land scandal which the Public Accounts Committee has described as “the most blatant example of fraud and criminal activity by the Land Board and certain of its Members”.

Jimmy Maladina, by his own admission, has received substantial fees in the past as a private citizen for arranging State contracts for private companies.

Set against this troubling backdrop,  it is difficult to appreciate the merit behind Marape’s decision to appoint Maladina Vice Minister for State Negotiations. For those fluent in the real politick of power, this decision sends a signal that does not appear terribly difficult to decode. This will only serve to repel from PNG’s shores, any investor or business, that cannot afford to be caught up in high risk sovereign environments. On the other hand it will be a magnet for those that thrive and profit from such risk.

This balance of forces does not appear to bode well for the public, who ultimately bear the cost of cowboy political-economic cultures.