Telikom CEO suspended

PUBLIC Enterprises Minister Sir Mekere Morauta has suspended Telikom chief executive officer Peter Loko, based on “pending investigations” that the telco entered into illegal, million kina-plus contracts.
Telikom CEO suspended Telikom CEO suspended Telikom CEO suspended Telikom CEO suspended Telikom CEO suspended

The minister plans to reveal the investigation results of Telikom's "large-scale unauthorised contracts and commitments" to parliament.

The state-owned enterprise is required to get treasury approval for contracts involving more than K1 million ($A434,288) of spending.

"It is the CEO's responsibility to ensure approvals are sought, which is why he is suspended," Morauta said.

The worst example he cited was the "unauthorised borrowing" of K340 million from two banks - with $200 million drawn down.

According to Morauta, Telikom was only able to pay off interest on the loan and was asking the government for assistance to "bail it out" - while the banks were seeking a government guarantee.

"Too many public enterprises are flouting the law, with disastrous consequences for the nation," Morauta said.

"The law is there to protect taxpayers' funds and the national interest and I will not hesitate to pursue public officials and others who do not comply with the law."

The O'Neill-Namah coalition government has been suspending or removing various chiefs of state-owned enterprises - starting with Independent Public Business Corporation CEO Glenn Blake in August.

PNG Ports CEO Brian Riches was suspended last month and he had since told maritime newspaper Lloyd's List the move was politically motivated.

Outside of Telikom and PNG Ports, two other SOEs received "conditional approval" for their budgets in late January.

Senior executives at Post PNG and Motor Vehicles Insurance Limited may have good reason to be nervous.

Loko responds

In a statement, the suspended Telikom CEO detailed the achievements of Telikom over the past nine years and thanked Morauta for "teaching me a lot about life".

Loko was charged with not complying with section 46B of the Independent Public Business Corporation Act and in his statement, he directed his criticism towards the law.

"That particular section restricts all state-owned entities from not spending any money beyond K1 million unless approved by the Minister for Finance," he said.

"This clause came into play in 2007.

"The interesting thing about this section is that it does not allow an SOE an advantage in a highly competitive market and Telikom and a number of other SOEs have asked for this section to be changed.

"It also does not allow for quick delivery of services."

He called on the O'Neill-Namah government to amend section 46B.

"I publicly made this call in Bakawari on Friday 3rd February and once again make this call to our leaders so SOEs can deliver timely services," he said.

"All the other SOEs are suffering from this same sickness called section 46B of the IPBC Act."

His complete statement is available as a word document under "related links and downloads" to the right of your screen.

  • Porgera: Barrick-PNG talks go on - Read more
  • Follow the companies investing in the PNG market - Read more