Taking from the poor to feed the rich: NHC and John Dege (Part I)

Inside the NHC Housing Racket

In a three part series, PNGi exposes the numerous abuses attributed to the former NHC chief, John Dege, and the courageous people who fought back to protect their family home from an outlaw organisation – the National Housing Corporation.  

#3daysofDege

#thepeoplefightback

Jophiel Iravela was part of that great generation who shepherded the nation into independence. He served honourably in the Health Department. Jophiel specialised in mosquito entomology.

An honest man who never utilised his public position for personal profit, Jophiel was only able to acquire a humble property for his wife and four children, under a special home ownership scheme. For decades he paid K46 a fortnight in the hope of realising the family dream.

When Jophiel retired, his son Dennis paid K50 a fortnight to the National Housing Corporation in order to settle the outstanding amount owing.

In 1992 the property situated on Geda Place, Boroko was finally paid off. Jophiel and his family asked the NHC to conclude the agreement struck in 1971 and sign over the house.

They failed to honour this request. Jophiel’s daughter Marie, as a result, spent years petitioning the NHC to follow the law and fulfil their end of the bargain.

In 2015, two generations of the Iravela family who scrimped and saved to buy the family home, had their dream torn apart by John Dege and the NHC.

According to the National Court Dege and the NHC used deceit and fraud to sign over the Iravela family property to Remdy Investment Limited for K512,050. This fraud was facilitated through a dubious Outright Cash Sales Scheme. It has been serially abused by the NHC to dispossess legitimate owners and tenants.

This illegal act involved multiple abuses of power, and a series of false reports, that were designed to deny the Iravela family their lawful property. Marie Iravela did not let her father and brother’s lifework die. She litigated and won her case last month.

While it appears the Iravela family home is safe, those who attempted to burst this hard fought dream must now be investigated by the anti-fraud squad. The reasons why will become apparent over coming days.

_{Video: John Dege unsuccessfully contested the 2017 elections on a People’s National Congress Party ticket}

While Dege has been described as ‘a success star’ by his replacement – who suggested Dege reversed the NHC’s fortunes – Courts and Auditors have seriously questioned this label.

Dege claims ‘I am always the victim’. Others claim he is the persecutor.

Lets dig deeper.

Deceit and Fraud

In 1992 Jophiel Iravela, with the help of his son Denis, finally paid off the family home after working for decades as a public servant.

The NHC had a fiduciary duty to transfer title to the Iravelas. Justice Gavara-Nanu, however, concluded that the NHC in a ‘deliberate, calculated and callous’ manner breached its position of trust.

Undeterred by the NHC’s obstinance, Jophiel attempted to secure  title over his home, during his remaining years on earth. When he died in 2010, Jophiel’s daughter Marie continued the Sisyphean task.

While the Iravelas struggled for two decades,  in the space of two months prominent Port Moresby lawyer, Turai Elemi – through his company Remdy Investment Limited – managed to acquire the property from under the feet of the Iravela family.

While the Courts and police have not yet found any wrongdoing on Elemi’s part, the NHC and its senior management have been slammed for fraud and deceit.

This saga began on 9 February 2015. Remdy Investment Limited wrote to the NHC, offering to purchase the Boroko property for K380,000.

A week later on 16 February 2015, the NHC’s Managing Director John Dege, offered the property to Remdy Investment for K512,050.

This offer was made under the NHC’s ‘Outright Cash Sales Scheme’, a programme that appears to have been abused in order to offload public housing to well off ‘big men’.

When the Courts invited Dege to explain the workings of this scheme he refused:

It should also be noted that Mr. Dege , was ordered a number of times by the Court to attend trial and produce the Corporation’s file on the property, and among other things to give evidence on how the Corporation’s Outright Cash Sales Scheme worked and the laws that governed and regulated it. He failed to attend trial let alone produce to the Court the Corporation’s file on the property. Mr. Dege was informed of the trial date.

On the same day which Remdy Investment was offered the Boroko property under this scheme, Marie Iravela trekked down to the NHC office in what became a regular vigil for the family, to again claim title over her father’s home.

Marie was informed the property file was locked away in the “‘boss’” (i.e. Dege) cabinet.

Marie returned the next day. NHC’s acting Creditor Controller, Samuel Vele, confirmed her father had paid off the property.

Written advice was then sent to John Dege and senior  management in March by NHC officers. They were informed  that the Iravela family was indeed the rightful owner. This advice, Justice Gavara-Nanu, argues was ignored.

In a bid to shield her family from the tide of fraud emerging around her, during this  period Marie Iravela attempted to lodge a caveat with the Registrar of Titles, Benjamin Samson. The caveat would legally alert any potential buyer of her family’s prior interest in the property.

Samson informed the court he used his discretion to refuse the caveat. This meant Remdy Investment Limited may well have been genuinely unaware of the Iravela family’s claim over the Boroko property. However, no such innocence can be claimed by the NHC who used deceit and dishonesty to sell off the property.

According to Justice Gavara-Nanu, the NHC authored a deeply flawed site inspection report which suggested that the Iravela family were in the property illegally. Strangely the site inspection report was dated 6 February, three days before Remdy Investment actually approached the NHC.

With this flawed report to hand John Dege personally oversaw the transfer of title to Remdy Investment, despite the fact such a duty ought to have been handled by NHC’s conveyancing officers and lawyers (according to the National Court). This occurred after Dege had reportedly been alerted by his own staff to the Iravela family’s lawful claim over the property.

On the 23 March, Romily Kila-Pat as the Ministerial delegate, signed off on the contract of sale and the transfer instrument. Strangely the formal request from Dege to sign off on the deal actually arrived a day later.

Less than two months after Remdy Investment had approached the NHC, title was handed over. It was 1 April 2015, yet this  was no April Fools joke.

Justice Gavara-Nanu slammed Dege and the NHC for their unlawful actions:

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 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.

Justice Gavara-Nanu continues:

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.

The judge therefore 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’.

This conclusion echoes concerns raised by the Auditor General’s Office (AGO). The AGO has asserted most recently that the financial environment within the NHC was primed for ‘fraud, abuse and corruption’.

For example:

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.

PNGi will be writing to the anti-fraud squad to ensure the direction from Justice Gavara-Nanu was followed up on, and to petition that a full scale investigation be conducted into the NHC’s Outright Cash Sales Scheme. We will relay the response to readers.

But this is not the only case involving Dege and the NHC that has found its way into the national court system. Stay tuned for the second instalment of ‘Taking from the poor to feed the rich’, which will be published on Wednesday.

Appendix: A Timeline of Events