01/06/2022
_Source_ : _The Pacific Guardian_
*BSP, MRDC, PRG and Lamana Group linked to Samoa Tax-haven*
_________________
(a)….. __PNG Treasury and Revenue Commission allegedly denied billions of kina in tax receipt/revenues in an alleged syndicated tax-haven fraud_ .
(b) _Petroleum, Oil and Mineral Resource Owners allegedly robbed of equity and development financing as Bank South Pacific, Mineral Resources Development Corporation and Lamana Group must explain to the PNG public their objectives of registering tax-haven accounts in the Samoa jurisdiction__ .
(c) _Peter O’Neill’s former regime implicated._
__________________
PNG Businessman, Kostas Constantinou of the Lamana Group of Companies, Augustine Mano, Managing Director of PNG Mineral Resource Development Corporation, and Robin Fleming, Bank South Pacific Chief Executive are allegedly linked to what seems like a syndicated tax-evasion fraud scheme operating ‘shell’ companies in the tiny Pacific Island tax haven of Samoa, the USA-based International Consortium of Investigative Journalists – ICIJ has revealed.
PNG Social Media Platform hardliner Kotu Akema had alleged the workings of Kostas Constantinou over his handling of his late brother, Sir Theophillus Constantinou’s deceased probate, being channeled into a company Laraguma Ltd with sole shareholding by a 27-year old Xinhua Wang, of Section 11, Allotment 25, Boroko Drive, PO Box 1398, Port Moresby, PNG, registered on 11, Sept 2019, a day after Sir Theophillus died.
The previous O’Neill regime appointed a sole Insurance brokerage firm, Insurance Partners handling all the country’s State Owned Enterprises (SOEs) insurance placement for SOE’s, namely PNG Power, Air Niugini, Telikom PNG, PNG Ports to name some. The ownership of Insurance Partners is still unknown, but it is understood, the company is managed by a Antoninette Amputch, a person of Indian nationality who is also implicated in the Oilsearch-InterOil and Union Bank of Switzerland- UBS Loan saga that is ripping through government.
The roles of youthful Wang, working for a Jiangsu International Corp Ltd, and company proprietor a Meck Luo, a known close associate of former Prime Minister Peter O’Neill have also come to light.
Akema wrote in social media outlet Pan-Melanesia: The CEO and Chairman of PNG Power Ltd, both known are soon to pay another PGK9 million, an increase of PGK3million from the normal PGK6million over the years. Someone is assigning himself to walk away with PGK3 million under the cover of insurance (probate)..”.
It is understood heir loom to the PNG’s Lamana Group of Companies Kostas Constantinou, also Chairman of PNG Power at the same time as Chairman of BSP Board and the motivated incorporation of Laraguma Ltd as preferred executioner of Sir Theophillus’ deceased estate is haunting the nation, especially anti-corruption crusaders.
The ICIJ-held database, The Offshore Leaks, which contain volumes of information about global leaders of Governments, the Royalties, Businesses, Corporations and private individuals and entities has in store information on PNG following a code-breaking raid on the usually secretive accounts. It named the PNG’s flag-bearer bank, MRDC, the national trustee of PNG resource owners, Lamana Group of Companies and Petroleum Resources Gobe (PRG) in their findings.
ICIJ is a global network of more than 190 investigative journalists in more than 65 countries who collaborate on in-depth investigative journalism, with headquarter offices in Rhode Island, Washington DC.
One of ICIJ Offshore Leaks investigators said: “It looks like these people have registered and used off-shore companies and bank accounts to shelter money and potentially reduce tax bills”.
Documents made available for Papua New Guinea from ICIJ’s four major offshore investigations – Offshore Leaks, Swiss Leaks, Panama Papers and Paradise Papers says ‘offshore financial dealings sometimes intermingle with those of corporations and kleptocrats bent on looting (PNG) billions of kina a year” and “squirreled away money in tax havens, out of reach of the strapped treasuries of nations, including PNG.
The ICIJ Offshore Leaks database also issued a disclaimer saying it is entirely legal to establish and operate a tax haven account.
However, it is high treason and criminal when operators of such ‘shell’ accounts in tax havens are motivated by the business desire to route payments from suppliers through the Samoan Corporate Registry and a designated bank within such secretive jurisdictions.
The key role of Kostas Constantinou, of the Lamana Group of Companies, widely seen as a close business confidante and associate of the previous O’Neill regime is reportedly involved in the establishment of the ‘shell’ companies and his shareholding and directorship in these makes it more imperative of the dark shadowy role the Constantinou’s allegedly played in ushering the national bank, MRDC and PRG to hold accounts in Samoa.
Constantinou is brother of the late Sir Theo Constantinou, one of PNG’s wealthiest businessman and a close associate former PM Peter O’Neill and other prominent PNG politicians.
The Australian Financial Review, in its 25-26 May 2019 issue reported the common view that “Peter O’Neill has long been described as a businessman who dabbles in politics. But nothing has exercised the corridors of power in Port Moresby more than O’Neill’s alleged boasting of his house with water views and a swimming pool in Sydney.
“NSW Property records don’t bring up anything in O’Neill’s name, but one of his closest associates, Sir Theo Constantinou, paid $9.2 million (PGK36 million) for a five bedroom, three-level house with gun-barrel views of the harbor bridge on Wolseley Road, Point Piper in April 2015” adding that “….Sir Theo does not reside at the house when in town.
“….adding to the house’s intrigue is the presence of one of O’Neill’s son, who often hosted parties at the house in Wolseley Road and never disabused anyone of the suggestion it was his family’s house” the AFR reported.
The Offshore Leaks database revealed, on 16 May, 2011, Kostas registered and became sole director of a company in the Samoa Tax haven, namely, a Taumeasina Development Corporation (TDC).
Five months later on 20 October 2011, Kostas also incorporated Lamana Development (Samoa) Ltd, becoming its sole director and shareholder.
On 10 July, 2015, Kostas, together with MRDC Managing Director Augustine Mano, a Johnson Kalo, Chief financial controller of PNG’s leading commercial bank, Bank South Pacific (BSP) incorporated the BSP (Samoa) Ltd subsidiary, naming themselves as directors of the company.
Soon after registering BSP Samoa subsidiary, it was revealed Kostas relinquished his position as director three days later, on 13 July, 2015, leaving behind a Robin Fleming, Augustine Mano and Johnson Kalo to be directors of the BSP (Samoa) Limited. Fleming, of Section 420, Lot 5, Acacia Street, Hohola, NCD, Papua New Guinea, Mano and Kalo have remained directors of the BSP shell ever since.
The reason for Constantinou’s resignation as Director of BSP (Samoa) Ltd is not revealed. However, ICIJ’s Offshore Leaks database reported Constantinou had, on the next day following his resignation as director of the BSP (Samoa) Ltd, incorporated and registered another shell company at the Samoa Corporate Registry, namely, a Taumeasina Villas Limited, becoming its sole director and shareholder on 14 December, 2015, while registering, “Waigani, Port Moresby, National Capital District, Western Highlands, Papua New Guinea” as the shell’s registered address.(Note that Waigani, Port Moresby, NCD is not in the Western Highlands in PNG)
On 29 September 2016, Kostas, as Executive Chairman of BSP incorporated and registered a banking subsidiary, Bank South Pacific (Samoa) Ltd. Kostas also registered TDC.
On 29 September 2016, following the registration of the BSP (Samoa) Ltd, the Offshore Leaks database revealed that Mano became sole ‘shareholder’ and director of TDC replacing Constantinou.
On the same day, Mano, as sole director of TDC, registered another shell, namely “Petroleum Resources Gobe Limited” (PRG) at the Samoa Corporate Registry and by virtue, became its sole shareholder and director, it was further revealed.
Experts working with ICIJ say payment by suppliers could have been taxed if they had stayed in PNG. But said in typical tax-haven investment behaviors, many countries’ tax administrations face the risk that when taxable income and or monies routed through the tax havens for other illicit intentions and purposes ‘were out of sight and out of reach of the country’s overstretched national tax authority’.
In November, PNG’s Internal Revenue Commissioner Sam Koim lamented at PNG losing PGK1 billion in Salaries and Wages Tax (SWT), as some of PNG’s big companies were defaulting in paying their relevant taxable dues to the nation.
While it is not illegal to own or use offshore companies, critics say that combining controversial financial practices using foreign tax shelters is wrong. “That is true for any individual, and it is even more so for people who are entrusted the responsibility to safeguard money meant for resource owners.
It is not known at this the stage whether BSP (Samoa) Ltd, TDC, Taumeasina Villas Ltd, and PRG and Lamana Samoa Ltd are ‘shell’ companies.
However, the alleged involvement of MRDC, Lamana Group, BSP, PRG and their syndicated practice of investing in tax in this tiny Pacific Island Tax Haven, particularly the direct involvement of BSP Chairman Kostas Constantinou is keeping indigenous Papua New Guineans awe struck and baffled as to whether or not, this big Pacific nation, reeling from a PGK35 billion debt burden is one big ‘laundromat’ for money launderers.
It seemed the previous regime, the Lamana Group of Companies, the nation’s leading bank BSP and LANDCO Trust companies are in the centre of it all.
