PNGi INVESTIGATES

Profiting from Sickness: The Dark Economy of Public Health in PNG Part III

by Staff reporters
 10 Oct 2017 13 min read

Contents
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Sang Chung Poh Borneo and its sub-companies Living in Paradise Paradise connected companies Dams, banks and hospitals Census kerfuffle Cragnolini link Arise Sir Poh A flattering portrait Conclusion

Profiting from Sickness is a three-part investigation into Papua New Guinea’s public health sector. It focuses on the abusive commercial transactions that are leading to the circulation of overpriced and sometimes substandard medical goods. These inhibit the standard of care provided in our hospitals, health centres and aid posts, and, ultimately, contribute to the appalling health outcomes and lowered life expectancy that cause needless suffering across the country.

An abiding question is why? Why do public officials continue to award over-priced contracts to a company with a stained record of supplying sometimes substandard medicines and equipment, contracts that ultimately lead to unnecessary deaths and suffering?

While definitive answers are hard to find beyond the allegations of bribes and gift giving aired by some medical professionals, when we look at the wider networks around the company we can get a better understanding of how it is strongly interlinked with several elite circles of medical professionals and business people, some of whom are themselves linked to political figures.

Part I of Profiting from Sickness focused on the numerous allegations relating to pharmaceutical company Borneo Pacific Pharmaceuticals Limited. Central to all those allegations, from a wide range of authorities, are claims that Borneo Pacific has received inflated contracts for medicines and medical supplies, some of which are allegedly substandard or not required.

Part II traced the network of senior physicians and former public officials that are in business with Sir Sang Chung Poh, the owner of Borneo Pacific, and, in two cases, the serious allegations against those individuals, relating to rigged tender processes and misappropriation.

In Part III PNGi puts the focus onto the wider business network of Sang Chung Poh and reveals his interests across many sectors of the economy, which includes some of Port Moresby’s most exclusive residential development projects, and his business associations that reach all the way to the Prime Minister, Peter O’Neill.

Sang Chung Poh

According to Investment Promotion Authority records, Borneo Pacific Pharmaceuticals Limited is 99.99995% owned by a naturalized citizen of Malaysian descent, Sang Chung Poh. The other 0.00005% of the company is owned by Yong Kah Teck.

Sang Chung Poh, his fellow director and business partner, So Jin Poh, and Borneo Pacific Pharmaceuticals are at the centre of an extensive network of companies.

NETWORK MAP: Sang Chung Poh’s network of companies

Sang Chung Poh himself owns or part owns, at least 18 different companies with interests as varied as construction, property development, travel, medical supplies, hardware and even a ‘sky taxi service’.

Borneo Pacific Pharmaceuticals Limited is described on its website as having six sub-companies: Choice Travel Ltd, PLP Hardware Ltd, Jurudaya Construction Ltd, MH Supplies Ltd, MH Supermarket Ltd and Wonox Engineering Ltd.

These six ‘sub-companies’, according to IPA records, are not though all owned by So Jin Poh, three are owned instead by Sang Chung Poh and one is jointly owned by the two of them.

NETWORK MAP: Borneo Pacific Pharmaceuticals and its ‘sub companies’

Given that three companies apparently owned by So Jin Poh are described by Borneo Pacific on its website as ‘sub-companies’ and that Borneo Pacific is 99.9% owned by Sang Chung Poh, its is reasonable to conclude that either So Jin Poh is Sang Chung Poh’s business partner or that So Jin holds shares as a proxy for Sang Chung. So Jin Poh owns, or partly owns, at least a further six companies, as illustrated in the first, larger, network map above.

Only one of the Borneo ‘sub-companies’ is jointly owned by the two Poh’s; Jurudaya Construction Limited.

Juradaya, together with another jointly owned company, PLP Development Limited, is involved in two high-end real estate development in the exclusive residential areas of downtown Port Moresby, Ela Beach Paradise Condominiums and Touguba Hill Paradise Apartments.

Living in Paradise

The downtown area of Port Moresby has seen a lot of construction work over the last few years with new office and accommodation complexes springing up along the waterfront and up the sides of the picturesque hillsides. Two of the major new developments are the Touaguba Hill Paradise Apartments, which is still under construction, and the recently completed, Ela Beach Paradise Condominium.

IMAGE: Part of the Ela Beach Paradise Condominium complex

The Ela Beach Paradise development is described as comprising 32 three and four bedroom apartments with swimming pool, children’s playground, jogging track and 24-hour security, all overlooking the Ela beach parade. Apartments have been advertised for leasing at K3,000 or K3,500 per week.

The two apartment blocks that comprise Ela Beach Paradise were, according to the sales brochure, built by Jurudaya Construction (PNG) Ltd and CRCE (PNG) Limited in a development managed by PLP Development Limited. PLP and Juradaya as we have seen, are both jointly owned by Sang Chung Poh and So Jin Poh.

The company Ela Beach Paradise Limited is owned by 15 different entities, including PLP Development Limited, which holds 16% of the shares. The two directors of Ela Beach Paradise Limited are Sang Chung Poh and So Jin Poh. The largest single shareholder is a company called Western Resources Development Limited. It holds 39% of the shares. We shall look in more detail at Western Resources below.

NETWORK MAP: People and companies connected to the ‘Paradise’ developments

Just across the hill from the Ela Beach ‘paradise’ development, the Touaguba Hill Paradise Apartments is being developed by NPL Development Limited. NPL is the sole owner of Touaguba Hill Paradise Limited and is 75% owned by So Jin Poh.

IMAGE: Touaguba Hill Paradise – an artists impression

The Touaguba Hill Paradise development is a block of 113 apartments being built at a reported cost of K90 million. Completion is scheduled for June 2018; when finished the development will reportedly comprise three buildings with 9 levels and a gym, swimming pool and children playground. National Capital District governor, Powes Parkop, presided over the ground breaking ceremony for the development in June 2016.

According to the sales agents Touaguba Hill Paradise is set to be ‘Port Moresby’s most prestigious apartment block… where luxury is a way of life and extraordinary is a part of everyday’.

Dams, banks and hospitals

NETWORK MAP: Some of the government contracts awarded to Sang Chung Poh’s companies

It is not only private residential developments that Sir Sang Chung Poh is involved in.

Sang Chung Poh and So Jin Poh’s company Jurudaya Construction Limited, has also undertaken a number of major projects for the PNG government.

In July 2016, it was announced the government had signed a K16 million contract with Jurudaya Construction for the Menyamya Hydro Project which was to begin immediately and be completed within 12 months. Details about what is actually involved in the project are scarce, except that it is expected to benefit 80,000 living in the Menyamya region.

The hydro project followed the announcement eighteen months earlier, in January 2015, of a contract to build a new operating theatre at Popondetta General Hospital at a cost of K12 million.[1] The details of this contract were revealed in a National Department of Health Capital Works Quarterly report:

IMAGE: A page from the NDOH Quarterly Report

Interestingly, the same Department of Health report revealed details of the medical equipment and static plant supply contracts awarded to Borneo Pacific Pharmaceuticals, the ‘parent’ company of Jurudaya Construction, during 2012/13.

In total there were sixteen such contracts with a total value of almost K1.5 million. These contracts preceded the K71 million, three year supply contract awarded to Borneo Pacific in 2013 that we featured in Part 1 of Profiting from Sickness.

TABLE: Borneo Pacific Pharmaceuticals NDOH contracts 2012/13

The National Development Bank (NDB) is wholly owned by the Independent Public Business Corporation as Trustee for the State. The NDB is the successor to the old Rural Development Bank.

In June 2011 it was announced[2] the bank had signed a K4.9 million contract with Jurudaya Construction for the construction of a new, two-storey office complex in Wewak. Around the same time, Jurudaya was also awarded a similar contract by the NDB for a new office complex in Madang. This time the contract was valued at K5.8 million according to media reports[3] and the Prime Minister, Peter O’Neill was scheduled to officiate at the opening.

There is no suggestion there was any malfeasance in the issuing of these contracts, indeed, one media report assures us ‘Jurudaya Construction won the tender through the proper tendering’. However, these contracts illustrate the depth of the relationship between Sir Sang Chung Poh’s group of companies and the PNG government, which may have some bearing on the issues relating to the apparent repeated overpriced supply of sometimes inferior medicines and other medical supplies by the group to health facilities.

On a much smaller scale, in 2013, the Small Business Development Corporation, another government owned agency, opened their new office extension, constructed by Jurudaya Construction at a reported cost of K400,000.

FOOTNOTES
[1] ‘Govt seals K88m deals for roads First contracts for 2015’, Post-Courier, January 19, 2015
[2] ‘NDB signs K4.9m’, Post Courier, June 10, 2011
[3] ‘NDB to open in Madang’, Post Courier, April 5, 2012

Census kerfuffle

It is not only Health Department supply contracts awarded to Borneo Pacific Pharmaceuticals that have created controversy.

In 2011, the Post Courier newspaper raised questions[4] about a contract awarded to ‘BPP Logistics’ a subsidiary business of Borneo Pacific Pharmaceuticals. The contract, worth K1.68 million, ‘for packaging and storage of the 2011 national census forms’ was awarded by the Central Supply and Tenders Board on behalf of the National Statistical Office in February 2011.

The issue raised by the Post Courier was the fact that at the time of the bidding and contract award, BPP Logistics was unregistered. In response to questions form the newspaper Sang Chung ‘Jimmy’ Poh said the business was registered and CSTB Chairman, Bryan Kimmins ‘went as far as giving a copy of the certificate of registration to the Post-Courier to peruse as proof that it was duly registered’.

The Post Courier was not fooled though. They pointed out the certificate stated the registration had expired on 24 April 2010. To this Poh reportedly responded that the registration had been renewed. The Post Courier doggedly checked with the Investment Promotion Authority. There, they found the registration had NOT been renewed. Instead a new registration had been applied for and granted. The new registration was dated 10 March 2011, after the date of the contract.

The Post Courier also revealed BPP Logistics was bidding for a larger K6.8 million contract for distribution of census materials. The closing date for tenders was 1 March 2011, when BPP Logistics was not registered. It was not known if the bid from BPP for the larger contract was successful.

PNGi has obtained copies of the registration certificates for BPP Logistic and these confirm the findings as reported. The original registration expired in April 2010 and was not renewed, as Poh reportedly claimed. The new registration was effective from March 10, 2011. Therefore, at the material times BPP was not a registered entity.

PNGi has also managed to go one step further into the documentation, and has obtained a copy of the application submitted on behalf of Borneo Pacific Pharmaceuticals for the registration of the BPP Logistic business name in 2011. The application is clearly dated 7 March and was stamped as received by the Registrar of Companies on 9 March 2011. This further evidences the fact BPP Logistic was unregistered when bidding and awarded the contract and that Poh was incorrect if it is true he claimed the registration had been ‘renewed’.

All of this leaves us with the questions, why did the CSTB award a K1.68 million contract to an unregistered entity and was BPP Logistic successful in its bid, also submitted when it was unregistered, for the larger K6.8 million contract?

Also, why was the CSTB Chairman apparently so quick to try and absolve Borneo Pacific and why did he do so using an obviously outdated document?

FOOTNOTE
[4] ‘K1.68m census contract queried’, Post Courier, March 24, 2011

Arise Sir Poh

In June 2017, Sang Chung Poh was among four new Knights announced in the Queen’s Birthday Honours Awards. The award was listed as being ‘for services to commerce and to the community through supporting charities and healthcare, particularly the PNG Kidney Foundation’.

Poh was publicly criticized by former Prime Minister Sir Mekere Morauta for his ‘premature celebration’ which ‘shocked’ Morauta and ‘was a breach of protocol which underlines how knighthoods in PNG have become cheap commodities’

While Sir Mekere welcomed Mr Poh’s work on affordable dialysis treatment with the Kidney Foundation, he is reported to have raised the ‘problematic’ award of the ‘suspect’ drug supply contract to Borneo Pacific in 2013:

“I have been told by honest and concerned public servants that the prices of drugs being bought by the O’Neill Government are far higher than international prices, after allowing for freight.”

“Government is choosing to be ripped off,” said Sir Mekere. It is clear that Borneo Pacific has been profiting to the tune of tens of millions of kina during the last four years, while people are dying from lack of medicine and medical care.”

A flattering portrait

IMAGE: Sir Sang Chung Poh

Following the knighthood, in July 2017, the National newspaper published this rather flattering portrait of Sang Chung Poh in which reporter Gynnie Kero, failed to mention any of the controversies around Borneo Pacific Pharmaceutical’s drug supply and other contracts:

BORN in the small village of Kuching in Sarawak, Malaysia, Sang Chung Poh (or Martin as many call him) dropped out of high school because of financial difficulties.
He was ambitious and wanted to land a sales job but with limited English, delivery boy was the best he could do at a pharmaceutical wholesale company. He was 18.
With self-determination and encouragement from his superior, he learnt English and became a fulltime salesman, however, along the way, he realised that he actually wanted to be businessman.
Poh realised that to achieve his goal he had to be many things:
l Work hard
l Honest and create healthy relationships that are built on trust
l Be humble and friendly; and
l Help those in need
After three years of working as a salesman, he and four others started a company which focused on pharmaceutical wholesale in Sabah and Sarawak.
It was small business but the drive was big and the five partners and the medical team formed a tight bond.
In 1996 a colleague suggested that Poh should look at Papua New Guinea and explore opportunities here. Poh followed his colleague here to look at the market – and stayed.
In 1997, he started Borneo Pacific Pharmaceutical Ltd.
The company did well and grew. It also diversified into construction and property development, engineering and wholesale distribution, hardware, tours and travel, trading, mobile clinic operations, pathology, IT and hydropower engineering.
Today, the Borneo Pacific Pharmaceuticals Group of companies, which Poh chairs, is one of the country’s major suppliers of medicines and medical consumables. It also supplies medicines to Fiji, Samoa, Vanuatu, Tonga and the Solomon Islands.
Being successful in business hasn’t stopped Poh from looking at the people around him in his adopted country – the weak, the vulnerable, the poor. The suffering of people with kidney problems and their state of hopelessness touched his heart and he wanted to do something about it.
In 2009 he did and founded the PNG Kidney Foundation.
In 2013 the foundation set up a dialysis clinic in the Port Moresby General Hospital.
Poh is a true philanthropist, a businessman who once was poor. With the Kidney Foundation up and running he turned his mind to other things and today runs a charity programme that donates to churches and other groups.
Poh became a PNG citizen in 2007. Last month as part of the Queen’s Birthday honours, he was made a Knight Bachelor for his services to PNG commerce and the community.

Conclusion

Businessman Sir Sang Chung Poh owns a network of companies that have profited handsomely from construction, drug supply and other contracts from the PNG government. Some of those contracts have courted controversy, including allegations of inflated prices and sub-standard services.

But in PNG, it seems mud rarely sticks, and while controversies come and go, those at the centre seem to be able to sail on, unaffected and indeed, only attaining higher glories.

Anyone who has lived in Port Moresby or other urban centres in Papua New Guinea cannot fail to be affected by the glaring disparities between the ‘haves’ and the ‘have nots’; the small elite of businessmen, politicians and their attendant lawyers and accountants who are reaping enormous profits from government finances, and the rest of the population who struggle to survive without access to decent housing or basic services like health care, education, running water, electricity or sewerage.

Papua New Guinea’s basic health indicators are an embarrassment in a country that exports vast quantities of gold, oil, natural gas, other minerals and metals, tropical logs and tuna every year.

Unfortunately, nobody at the top it seems has any interest in disturbing the status quo.