Fiji National Provident Fund declares six per cent interest rate payout

The Fiji National Provident Fund has confirmed six per cent interest rate pay-out, amounting to F$131.12 million to its members for the financial year ending 30 June 2008. This will be credited to its 261,970 members’ accounts.

Furthermore FNPF Board also approved an increase in the Special Death Benefit (SDB) cover by F$500.00, from F$8,000.00 in 2007 to F$8,500.00 for 2008.

Correspondingly, the premium increases by F$5.00 from the previous F$30.00 to F$35.00.

For advice on investment in Fiji, pls email: info@gilbert.com.fj

Expansion of our services

We have been busy over the last two months completing Strategic Plans for the Fiji National Provident Fund and Amalgamated Telecom Holdings Limited.

Fiji National Provident Fund is the largest player in Fiji's financial system and has total asset of over F$3 billion, making up around 38% of total financial system assets.

Amalgamated Telecom Holdings Limited is the holding company for Telecom Fiji Limited and owns a part of Vodafone Fiji Limited. It has management rights over FINTEL.

Over February 2008, we were working on preparing a capacity development plan for a UNAIDS project in the South Pacific. The work included preparing for and facilitating a regional workshop held at Denarau, Fiji. That work has also been completed with the Report submitted to UNAIDS.

Currently, we are developing a Contingency Planning or Business Resumption Planning Model. Similar to our Strategic Planning Model, we will use our Contingency Planning Model to develop Contingency Planning/Business Resumption Plans for clients.

For more information on our services, pls e-mail info@gilbert.com.fj or call telephones (679) 3396427 or (679) 9921427.

Fiji National Provident Fund : our new client

We have just secured Fiji's largest financial institution, the Fiji National Provident Fund (FNPF), as a new client. FNPF controls around 40% of total financial system assets in Fiji and is currently the only superannuation provider in Fiji.

For FNPF, we are facilitating workshops for staff and managers and later the executive management and the Board of Directors to develop a new Strategic Plan for the Fund covering the financial years ending June 2009, 2010 and 2011.

We are currently using a Strategic Planning model that we designed for this project.

Mr Nacanieli Rika, lecturer in Accounting and Finance, University of the South Pacific, is assisting us with this project.

FNPF Board to release Natadola report

The Chairman of the Fiji National Provident Fund (FNPF) Board of Directors, Peceli Vocea, said that they will be releasing the Ernst & Young special audit report on FNPF gradually for public consumption.

This assurance was made after increasing calls for public accountability to the Fund's members on how their funds had been managed.

A subsidiary of the FNPF said that the decision to invest in the Natadola hotel project was made by the Fund without carrying out proper independent due diligence.

The FNPF Board Chairman said that the release of the Report to the public would facilitate a good debate on its contents and ultimately encourage people to make suggestions on how to deal with the recommendations in the Report.

FNPF Board comments on Audit Report

The Fiji National Provident Fund Board is currently evaluating the Ernst & Young Audit Report on the Fund's operations and investments which was commissioned by the Interim Government early 2007.

The following is an excerpt taken from a notice put out by the Fund in the Fiji Times of Thursday, 30 August 2007.

"The major objectives of the audit were to :

• investigate major investment projects undertaken by the Fund, ascertaining any shortcomings, deficiencies or excessive risks arising from these investments;
• review the purchasing and procurement processes to ensure that they are in accordance with established policies & procedures and benchmarking to best practices; and
• identify discrepancies relating to entitlements and benefits for senior management and past Board members.

In relation the Fund's investments, the report identified a number of governance, control, and structural weaknesses that potentially expose FNPF to unnecessary risks."

For more information, pls contact the Fund's Board Secretary on telephone (679) 3307811.

FNPF investment at Natadola safe

The Fiji National Provident Fund (FNPF) has said that its investment at Natadola is safe. The comment was made after the cancellation of the foreign investment registration certificate of Natadola Land Holdings by the Fiji Islands Trade and Investment Bureau (FTIB).

The FNPF said that the cancellation of the certificate means that Natadola Land Holdings cannot engage in "development and management of integrated resorts".

The Chairman of the FNPF Board, Peceli Vocea, said that the Fund has had informal discussions on the way forward in terms of replacing Natadola Land Holdings and made the assurance that the cancellation will not impede the completion of the project at Natadola.

FNPF Investments Limited, a subsidiary of FNPF, holds 51% shareholding in Natadola Land Holdings with the remaining 49% owned by Hotels Property Pacific Limited (HPPL) of which APRIL (Hong Kong) is a major shareholder.

APRIL was project manager for the Natadola project before being removed recently.

Board Membership at Home Finance Company Limited

This is to announce that I had been offered and have accepted an appointment by the Fiji National Provident Fund (FNPF) as one of its Independent Directors to the Board of Home Finance Company Limited (HFC Finance).

FNPF, the Fiji pension funds provider, owns 75% shares in HFC Finance (while the remaining 25% is owned by the Unit Trust of Fiji). HFC Finance is a deposit taking institution and is licensed and supervised by the Reserve Bank of Fiji.

I have accepted the appointment as Independent Board Director at Home Finance Company Limited in the interests of seeing how our member funds at FNPF are being invested, and to contribute to HFC Finance and FNPF, as its major shareholder, my banking and financial industry experience and skills.

Being a vocal critique of the responsibilities of Board Directors in local institutions, I undertake to carry out my Board Directorship role to the best of my abilities and in an impartial manner.

To our past clients in the finance industry and to those that may wish to use our services through Gilbert & Samuels Company Limited, I vouch that we will continue to maintain very high standards of professionalism and confidentiality with regard to individual client matters and will not, at any time, compromise our ethics and standards, by providing or sharing information about one client to its competitors in the industry.

To contact us about this appointment or any future consultancy, you can e-mail gilbert@connect.com.fj or call telephones (679) 3396427 or (679) 9921427.

Fiji National Provident Fund Chief Executive and Deputy fired

The Chief Executive Officer of the Fiji National Provident Fund (FNPF), Olota Rokovunisei, and his deputy, Foana Nemani, were fired by the FNPF Board yesterday, Thursday, 19 April 2007. Board Chairman, Peceli Vocea, said that the decision was arrived at after the Board considered all options that were available to it.

More on the story here.

New crisis at Home Finance Company Limited?

The Deputy Governor was seen leading an inspection team from the Reserve Bank of Fiji into Home Finance Company Limited early this week. Home Finance (also known as HFC Finance) is a subsidiary of the Fiji National Provident Fund. Given that it is a deposit taking institution under the Banking Act 1995, it is supervised by the Reserve Bank of Fiji.

During my time at the Reserve Bank of Fiji, never once did the Deputy Governor lead an on-site examination/inspection team that had gone into one of the banks or other deposit taking institutions supervised by the Reserve Bank of Fiji. The teams would go with someone designated as "examiner-in-charge" to lead the team. Rarely would the head of the financial system supervision department even go.

So does the appearance of the Deputy Governor leading the team, a signal of a crisis at that institution? The other signal that things are serious is that he was at Home Finance for the better part of the day.

The other question that arises is : "Has complaints about the Reserve Bank's failure in its supervisory role and its monetary policy settings (which were raised earlier in this blog and covered well locally by Fiji Television) now woken them up?"

More on this should definitely come out over the next few days.

Fiji National Provident Fund saga : Who is responsible for checking the background of foreign investors?

The Reserve Bank of Fiji and the Fiji Islands Trade and Investment Bureau have been blamed by the Fiji National Provident Fund (FNPF) for not checking the background of the management company and directors of FNPF's Natadola hotel/resort development project.

Reproduced below are reports contained in today's Fiji Times, Fijilive and One National News.


"Natadola shock Fiji Times, Friday, March 16, 2007


A DIRECTOR of the company developing the $140million Natadola resort project has quit after his criminal past was revealed.


Two project management companies involved in the project, which will ultimately see a world-class integrated tourism resort and golf course built on 638 hectares of beachfront land, have also been replaced.

Louis Gerard Saliot, French-born chief executive officer of Asia Pacific Resort International (APRIL), the Natadola project managers, quit when confronted with details of his previous conviction, said Natadola Bay Resort Limited chairman, Felix Anthony yesterday.


Mr Anthony said the 60-year-old Saliot had been jailed in Monaco in 1992 for two years for breach of trust and had faced the courts again in 1993 when he was given a three-year term for complicity of bankruptcy, breach of trust, forgery and use of forgeries.

Mr Anthony would not reveal yesterday how the details of Mr Saliot's criminal past had come to light, but revealed Interpol had been used to trace Mr Saliot's history.

A copy of an Interpol document, addressed to FNPF manager Viliame Vodonaivalu and countersigned by Senior Superintendent of Police, Ravi Narayan, was made public at a press conference held by Mr Anthony yesterday.


Mr Anthony said Mr Saliot admitted the convictions when confronted by them.

He said the project managers, APRIL, which was hired as project manager in April 2004, and European project management group COTEBA, have been replaced by HLK Jacobs as interim project managers.


The Natadola Resort project is backed by the Fiji National Provident Fund, which has so far invested $60million into it. Natadola Bay Resort Limited is a subsidiary of FNPF.


Mr Anthony said Mr Saliot had not disclosed his criminal background when applying for his foreign investor's licence, a breach of Fiji's investment laws.

"Both the licence and work permit have been obtained by falsifying documents," Mr Anthony said.


"One of the concerns we have is the role of the FTIB (Fiji Trades and Investment Board) and the RBF (Reserve Bank of Fiji), as they are the people who grant licences without a proper scrutiny of people who want to do business."


Mr Anthony said APRIL had been paid $8million in management fees in three years.

APRIL project manager Keni Dakuidreketi said it would be premature to comment as they were still holding talks with the FNPF.


"We will comment at an appropriate time," he said last night.


Mr Anthony said two of the major concerns raised about the project was it was late by 24 weeks
and the lack of accountability.


He said only 10 per cent of the resort construction has been completed so far.

However, Mr Anthony assured FNPF members that their funds were secured.

"The FNFP Board is fully committed to ensuring that members' funds are secured and protected and to see the completion of the project.


"Given this commitment, we will carefully scrutinise all funds that are utilised for investment purposes,'' he said.


Mr Anthony said investigations into the resort project were continuing with Australian chartered accountant firm of Ernst and Young contracted to carry out an audit. "


"It's Reserve Bank, FTIB fault: Anthony Fijilive, Friday March 16, 2007


The Reserve Bank of Fiji and the Fiji Islands Trade and Investment Board have been blamed for failing to properly investigate the people involved in the multi-million dollar Natadola Bay Resort Limited (NBRL) project in Sigatoka, one of whom is alleged to have a criminal record.

NBRL board chairman Felix Anthony claims that Interpol reports show that one of the NBRL directors Louis Gerard Saliot has a criminal record; that he has been jailed for two years for breach of trust, that he was declared bankrupt, and that his bankruptcy proceedings are still continuing before the courts in Monaco.

"And knowing this, we have come to discover that in applying for his foreign investor licence, he (Saliot) did not disclose as is required, his offence or convictions in that and as such obtained his licence without making a full declaration which itself is unlawful.

"We have also come to discover that in also applying for his work permit he did not disclose his convictions and his bankrupt status and again we believe that his work permits were obtained without full disclosure. As such this causes us great concern."

No comments could be obtained from Saliot but another partner Keni Dakuidreketi said they would comment later.

The NBRL is owned 100 per cent by the Fiji National Provident Fund.

In recent weeks, the new NBRL board (appointed in December last year by the new military regime) has been reviewing the Natadola project with two major concerns.

The main concern has been that the project was late by 24 weeks and the lack of accountability in the project.

"As chairman and board of the NBRL, we have has been very concerned with the progress of that project itself. It is a huge project, probably the biggest the FNPF has ever undertaken," Anthony says.

"The total project when completed would be in excess of $340 million but the hotel project itself is worth $140m of which up to date FNPF has already invested about $60m of the workers' money.

"As the board of NBRL we have been very concerned at how the project has progressed so far. There has been a delay of currently the project running 24 weeks late. And when we talk about delays it means costing FNPF much more money."

He said that apart from that the supervision of the project has been of major concern to them.

Anthony says the NBRL in 2004 hired APRIL (Asia Pacific Resort International Ltd) to be project managers for this development while COTEBA was hired as construction managers.

Since then, APRIL was paid $8m in management fees. APRIL's principals are Saliot and Dakuidreketi.

Anthony says that NBRL is not satisfied with the performance of APRIL and COTEBA and as a result have been replaced with HLK Jacobs appointed interim project managers and a quantity surveyor has also been appointed to work on the project.

Anthony said that in issuing the licence, the FTIB has a role to investigate the background of people it issues licences to. "They failed."

He said that the RBF also has a responsibility to do background searches on people before they allow people to come in and do business. "They failed and this is simply not on."

"This only exposes the laxity in our system." No comments could be obtained immediately from the RBF or the FTIB.

Anthony says it is FNPF's own initiative that they have come up with these findings.

"I think both these organizations have a lot to be desired in this area and not only that but because of their laxity organization's like us suffer.

"And it is not cheap, it costs us a lot of money when we have to restructure a project that is already in progress and this causes delays and all sorts of problem. And we are talking about workers' money," he said.

He says Saliot has tendered his resignation as a director with immediate effect. "


"Reserve Bank not to be blamed over Natadola project One National News 16 Mar 2007

The Reserve Bank of Fiji says it shouldn't be blamed for what has transpired in the deal between April Development and Natadola Bay Resorts Limited.


In a statement the bank says it's not the role of the Reserve Bank to check the backgrounds of foreigners who wish to undertake business in Fiji.


The bank says it was never asked by FNPF to undertake a background check on Gerard Saliot (Selio) or his company, adding this responsibility cannot be abdicated to the agencies of Government or the Reserve Bank.


In this case, the bank says this responsibility rests squarely on the FNPF Board.

And the Fiji Islands Trade and Investment Bureau says given the latest findings, they will now go through the process of reviewing the registrations granted to the Natadola Marine Resort Limited and APRIL Development.

Debate about loans taken by FNPF manager : What did the auditors and the Board members do?

The Fiji National Provident Fund (FNPF) saga continues today with a story in the Fiji Sun about the loans taken by former Deputy General Manager of FNPF from Home Finance Company Limited (HFC) - a subsidiary of FNPF. The loans were supposedly provided without due consideration given to repayment ability and were made at very low interest rates (interest rates that might have been much lower than what they were borrowed at by the lending institution).

The point that I wanted to make is that the former manager of FNPF was not the only one that participated in this particular transaction. For such high loans to be granted, the Board of Directors of the lending institution would have had to be involved. The auditors also should have gone through the documentation/loan when making an assessment about the "going concern"/viability of the lending institution.

So what were they doing? The following questions need to be answered :

• who made the credit analysis of the loan applications and what did he/she recommend;
• who gave the approval for the loans to be granted?
• what was the role of the Board of Directors in this approval?
• what did the external auditors come up with when making their annual audits to be able to attest to the "going concern" or viability of the lending institution?

Another separate issue to look at would be the relationship between FNPF and Home Finance Company Limited. To protect the interests of members of FNPF, were funds lent to HFC at arm's length or were they another sub-optimal allocation? What is the extent of the exposure of FNPF to HFC? What is the status of that exposure? Are they current i.e. being repaid? At what rates were they offered?

There definitely is more to this.



In the meantime, here is the story that was in today's Fiji Sun.

"$1.2m loans for fund exec : Your money is secure, FNPF chief assures

The suspended deputy general manager of the Fiji National Provident Fund obtained loans totaling $1.2 million from a financial institution in which the fund is a major shareholder and financier.

Home Finance Limited had approved separate loans for different properties for Fotino Investments Limited, a company owned by Foana Nemani and her spouse.

Mrs Nemani holds a majority of the shares in the company. Fotino Investments Ltd was formed in 2003 and had obtained loans of $242,500 for less than 35.4 perches, $242,500 for 33.2 perches, $120,000 for 35.4 perches, $120,000 for 33.2 perches and $649,000 for 1 rood: 6.1 perches. By September 2003, advance payments made to the company had totalled $362,500.

Fotino Investments was charged a rate of 5.75 per cent interest. Transactions spanned a period of two years from 2003 to 2005.

The FNPF owns 75 per cent of shares in HFC and is the sole lender of money for loan distribution by the company. HFC chief executive officer Freddie Keshwan said because of confidentiality of customer information he was in not a position to comment.I regret to advise that I am unable to provide you with any responses to the questions you have raised without a formal and specific written consent of the customer concerned," said Mr Keshwan.

Mrs Nemani had obtained a $576,736 housing loan from the FNPF when the valuation of the property was $430,000. Annually since 2003 Mrs Nemani continued to take additional loans for the upgrading of her property.

Documents of an internal audit allege that she abused her position and authority to take loans when the value on the property was lower than the loan amount. It said that if there is a demand on mortgage, the fund would not be able to fully recover the balance of her loan. Mrs Nemani was charged at a rate of 3.625 per cent, the rate applicable to FNPF staff who take loans for residential purposes. The repayment term of the loan was increased to a period of 15 years (balance of her retirement age) when she took the initial loan in 2000.

The additional five loans were approved on the remaining balance of the repayment period, however she requested an additional loan of $105,000 in March last year and requested that all her loans for the property be recalculated over 15 years.

By requesting that her repayment is spread over a period of 15 years, Mrs Nemani failed to act in the best interest of the fund, the report alleges. Mrs Nemani, says the report, used $41,194 of the $110,000 approved for the upgrade of this property in May 2005 to clear her loan at Merchant Finance.

The fund had approved the additional loan, under the condition that the money was to be used to add value to the house.

Meanwhile, in a statement issued yesterday, acting CEO Parmod Achary assured FNPF members that their funds were secure. He said the FNPF had served members for 40 years and would ensure their financial security during their working lives and on retirement.

"Nothing has changed," said Mr Achary. "Members' funds continue to be safe and secure. The FNPF is committed to providing efficient and effective service to its members and will continue to ensure that members receive their pensions, their benefits, and services to which they are entitled.

"As a good corporate citizen, the fund has always acted in the best interest of Fiji as its total assets make up 60 per cent of the country's Gross Domestic Product.

Most importantly, the FNPF continues to be a responsible steward of the funds with which we are entrusted." The FNPF board meeting will meet today or next Tuesday depending on the availability of members."

Amalgamated Telecom Holdings declares F$12.6 million dividend

Amalgamated Telecom Holdings (ATH) has declared an interim dividend of F$12.6 million (or 3 cents per share) for the six months ended 30 September 2006. The group's two largest shareholders, Fiji National Provident Fund and Government will receive F$7.4 million and F$4.4 million, respectively.

Profits after tax for that period was F$21.3 million.

The declaration of the interim dividends was based on expectations by the group that it will deliver a satisfactory result for the full year ended 31 March, 2007.

ATH is listed on the South Pacific Stock Exchange.

Note : For individuals or groups requiring investment advice, our principal, Gilbert Veisamasama Jr, can provide you with assistance. Gilbert is licensed as an Investment Advisor by the Capital Markets Development Authority. To contact us, e-mail gilbert@connect.com.fj or call telephones (679) 3396427 or (679) 9921427.