Petition to investigate outlaw organisation and its management

PNGi has just concluded a three part expose on the National Housing Corporation, focusing on a period when the corporation was led by John Dege.

Following a call to the public, PNGi collected 292 signatures calling on the National Fraud and Anti-Corruption Directorate to investigate John Dege and the NHC. Included among the signatories were victims of NHC illegal actions.

The letter was hand delivered to the National Fraud and Anti-Corruption Directorate on 17 May 2018. We will keep readers updated on the results.

You can see the full letter below.

Mr Matthew Damaru

Director, National Fraud & Anti-Corruption Directorate

Royal Papua New Guinea Constabulary

Dear Mr Damaru,

We write to you on behalf of many concerned citizens – the undersigned. PNGi has conducted a series of investigations into the National Housing Corporation (NHC). The evidence surveyed strongly indicates this is an outlaw organisation. One of the principal rackets appears to be operated through the Outright Cash Sales Scheme.

The undersigned respectfully ask that the National Fraud & Anti-Corruption Directorate follow the recommendation of Justice Gavara-Nanu, and investigate the NHC’s former Managing Director, John Dege, for his role in a fraud relating to Section 51 Allotment 41, Boroko. In addition, his role in the fraudulent transfer of Section 6, Lot 25, Hanu Place, Boroko also requires investigation, along with probes into other properties sold through the Outright Cash Sales Scheme.

Name: John Dabele Dege

Date of Birth: 10/10/1964

Known Addresses: Section 23, Allotment 45 Tugava St, Konedobu, National Capital District, Papua New Guinea; Section 23, Allotment 5, Reke Street, Angau Dr, Boroko, National Capital District, Papua New Guinea; Section 46, Allotment 38, Nilkare Street, Waigani, National Capital District, Papua New Guinea.

Allegation 1 – Section 51 Allotment 41, Boroko

• In 1992 Jophiel Iravela and his family lawfully purchased from the NHC,  Section 51 Allotment 41, Boroko under the Morgan Home Ownership Scheme. 
• Despite having a fiduciary duty to transfer the property to Jophiel Iravela,  the NHC failed to execute the sale. It was strongly petitioned to do so by Mr Iravela and his daughter Maria Iravela.
• When Jophiel Iravela died on 10 March 2010, the legal claim over Section 51 Allotment 41, Boroko passed to his estate.
• On 6 February 2015, the NHC conducted a housing inspection of Section 51 Allotment 41. The report falsely states that the Iravela family occupied the property illegally.
• On 9 February 2015, Remdy Investment Limited wrote to the NHC offering to purchase the Boroko property for K380,000. It is unclear why an inspection was conducted three days prior to this request. The National Court described it as suspicious.
• On 16 February 2015, the NHC Managing Director John Dege offered the property to Remdy Investment for K512,050. This offer was made under the Outright Cash Sales Scheme.
• On 16 February 2015, Marie Iravela attended the NHC office in Port Moresby to secure title over her family’s property. She was informed the file was locked in the boss’ cabinet. The boss referred to was NHC Managing Director, John Dege.
• On 17 February 2015, Marie Iravela again attended the NHC Head Office. It was confirmed by Samuel Vele, Acting Credit Controller, that Ms Iravela’s father had successfully paid off the property.
• In March 2015 written advice was given to John Dege by NHC officers informing him that the Iravela family were the rightful owners of Section 51 Allotment 41, Boroko.
• On 4 March 2015, Marie Iavela lodged a caveat with Benjamin Samson, Registrar of Titles, Department of Lands and Physical Planning. For reasons unknown, Mr Samson refused to register the caveat.
• On 23 March 2015, the Lands Secretary signed off on the contract of sale and the transfer instrument for the sale between NHC and Remdy Investment Limited.
• On 24 March 2015, NHC Managing Director John Dege wrote to the Lands Secretary requesting he sign the contract of sale and transfer instrument, for the sale between the NHC and Remdy Investment Limited. It is unclear why this letter post-dates 23 March 2015.
• On 6 March 2018, Justice Gavara-Nanu concluded ‘I … find the actions of the Acting Managing Director [Dege] and his Managers fraudulent and deceitful especially the former [Dege] in withholding the transfer of the property to the plaintiff and in transferring the property to the fifth defendant [Remdy Investment] after they were advised in writing by the senior officers of the Corporation that the deceased had paid off the property and that the property be transferred to the deceased’s next of kin’.
• On 6 March 2018, Justice Gavara-Nanu concluded  ‘This view is supported by the Corporation’s file on the property being locked away in the filing cabinet of a “boss” at one stage, thus preventing the file from being accessed even by the staff of the Corporation. This happened after the plaintiff was told by the Corporation staff that transfer of the title to the deceased’s family or next of kin was pending approval by the boss. This evidence also lends support to the view that the decision by the Acting Managing Director of the Corporation to sell and transfer the property to the fifth defendant was fraudulent’.
• On 6 March 2018, Justice Gavara-Nanu concluded  ‘given that the involvement of the Managing Director of the fifth defendant [Remdy Investment], Mr. Turai Elemi having been the subject of investigation by the members of the fraud squad, the fraud squad members should also investigate the involvement of others, especially those who featured prominently in the transfer of the property to the fifth defendant [Remdy]’.
• It is unknown what happened to the revenues of this sale. When the Auditor General has attempted to scrutinize sales of prperty made by the NHC, he has been denied access to the relevant documentation.

We the undersigned respectfully request that the National Fraud & Anti-Corruption Directorate enact the recommendation of Justice Gavara-Nanu and investigate John Dege, in addition to other senior NHC officers. This investigation needs to determine whether there is evidence available which can prove beyond a reasonable doubt that the aforementioned individuals breached sections 383A, 406, 407, 410, 414, 415, or any other relevant provision of the Criminal Code Act 1974.

Allegation 2 – Section 6, Lot 25, Hanu Place, Boroko

• Vaki Vailala and his family have occupied Section 6, Lot 25, Hanu Place, Boroko since 1994.
• This property was owned by the Government of Papua New Guinea, and leased to the Vailala family.
• In 2006 and 2008, the NHC offered to sell Vaki the family home. On both occasions Vaki accepted. The NHC failed to execute the agreement.
• On 10 May 2013, the Minister for Defense Dr Fabian Pok wrote to the NHC’s Managing Director John Dege using Ministerial letterhead. Pok requested ‘any property that is available for sale by your organisation’.
• On 30 October 2013, Mr Dege wrote a letter of offer to Vaki Vailala under the NHC’s controversial Outright Cash Sales Scheme. Mr Vailala was informed he could purchase the family home for a sum of K529,590.60 (when Vailala initially requested to purchase the property a decade earlier, it was valued at K70,000). He was given 14 days to accept the offer, and pay a 10% deposit i.e. K53,000. Mr Vailala appealed for an extension. John Dege refused.
• On 18 November 2013, the NHC’s Managing Director John Dege informed Vaki Vailala the offer was cancelled.
• In evidence deposed to the National Court of Papua New Guinea, John Dege justified this decision arguing that Vailala was an illegal tenant, a rent defaulter, and had refused previous offers to purchase the property. Justice Canning rejected all three claims on the grounds they were incorrect.
• On 23 November 2013, Mr Dege wrote a letter of offer to the Defence Minister Dr Fabian Pok advising him that Section 6, Allotment 25, Boroko was approved for sale under the NHC Outright Cash Scheme for the price of K525,525.00.
• It does not appear there was an open tender or bidding process.
• Dr Pok accepted this offer on 25 November 2013.
• On 28 January 2014 the contract of sale between NHC and Dr Pok was executed.
• At the time the contract of sale was executed the NHC was not the owner of Section 6, Lot 25, Hanu Place, Boroko. It was the property of the Government of Papua New Guinea.
• On 27 February 2014, the NHC acquired a 99-year State Lease over Section 6, Lot 25, Hanu Place, Boroko. It was backdated to 11 February 2014.
• On 28 February 2014 the State Lease was registered in the name of Fabian Pok.
• This sale was in clear violation of the National Housing Corporation Act. It also likely violated the Public Finance (Management) Act.
• On 27 January 2017, Justice Canning concluded the sale was fraudulent. Canning J noted: ‘[How could] Mr Dege and Mr Gore [NHC Principal Legal Officer] in particular, reasonably form the view that it would proper and lawful to sell this property to someone – let alone a Member of Parliament – a Minister – who was not qualified to purchase the property? Why was the second defendant cherry-picked to be the purchaser? Was this a pure and lucky co-incidence? It is difficult for a reasonable observer of this peculiar state of affairs not to be suspicious that something more sinister than simple naiveté, or the perceived need to sell the Corporation’s assets at market value, was afoot. But was it really market value? That is not known as the property was never put on the market’.
• It is unknown what happened to the revenues of this sale. When the Auditor General has attempted to scrutinize sales of property made by the NHC, he has been denied access to the relevant documentation.

We the undersigned request that the National Fraud & Anti-Corruption Directorate investigate John Dege, other senior NHC officers, and Fabian Pok, to see whether there is evidence available to prove beyond a reasonable doubt that the aforementioned individuals breached sections 383A, 406, 407, 410, 414, 415, or any other relevant provision of the Criminal Code Act 1974.

Allegation 3 – Abuse of the Outright Cash Sales Scheme

• Both properties cited above were sold under the NHC’s Outright Cash Sales Scheme.
• In 2012/2013 Section 276, Allotment 60, Pitpit Street, Waigani North, NCD was sold by the NHC for K11.1 million to a private company. An independent valuation contracted by tenants at North Waigani valued the property at K37 million.
• In or around 2013, Portion 2062 Konedobu was sold by the NHC to a private company for K1.9 million. Tenants had an independent valuation done, the property was said to be worth approximately K25 million.
• The Auditor General was unable to scrutinise the lawfulness of these sales. The Auditor General’s Office observed: ‘The Corporation in 2013 sold some of its properties with a total value of K11,283,770 as disclosed in the income statement. Documents and records in relation to sale of the properties including tender documents, contract of sale, and settlement statements were not provided for my review. Record keeping was very deficient and the management was unable to retrieve and provide all the necessary information and documents on the properties sold’.

We the undersigned believe the above examples offer prima facie evidence of serious illegal activity. There is a significant risk that NHC staff have abused the Outright Cash Sales Schemes. We request that an investigation be conducted to establish whether there is evidence that abuse of this scheme by NHC officials and private sector actors has breached sections 383A, 406, 407, 410, 414, 415, or any other relevant provision of the Criminal Code Act 1974.

Best Wishes,

[The Undersigned]

IN TOTAL 292 PEOPLE SIGNED THIS LETTER!