Thursday, April 05, 2012

Nasfund 2011 financial report delayed because of K125m investment


Nasfund’s audit of financial accounts for 2011 has been delayed because of the controversial K125 million Sovereign Community Infrastructure Treasury Bill (SCITB) investment, according to board chairman Mel Togolo.
Mel Togolo

This means that members will have to wait until at least the end of this month to hear the 2011 audited financial report.
Togolo said yesterday the Nasfund board expected the 2011 sign-off to occur on or before April 30, 2012, and not the end of March as it had initially anticipated.
“The reason for this delay is to do with outstanding matters pertaining to the K125 million Sovereign Community Infrastructure Treasury Bill (SCITB) investment,” he said.
“The board is in close consultation with our regulator, the Bank of Papua New Guinea and the Department of Treasury to agree on the treatment of this investment in conformity to internationally-accepted accounting standards in our book of accounts for the said period.
“To protect the fund and members’ interests, the board agrees it is prudent to ensure all issues relating to this investment are adequately addressed and resolved before it signs off the 2011 accounts.
“The board assures members that your savings and funds are safe and intact and there is no reason to worry.”
The SCITB caused much controversy last year after a study conducted by National Research Institute categorised the treasury bills as illegal, a claim which was vehemently denied by Nasfund.
In its report released last June, the NRI said the deal was done without the approval of parliament as required by the PNG Constitution sections 13 and 14, and was not in line with the Public Finance Management Act and Bank of PNG Act, which limited government borrowing.
Treasury bills, the Nasfund board argued then, were issued under the Treasury Bill Act by signature and authority of then Treasurer and Minister for Finance Patrick Pruaitch, and co-signed by then Minister for National Planning and Development Paul Tiensten with the sponsorship of then Minister for Communications and late Kokopo MP, Patrick Tammur.
Togolo cautioned members yesterday not to expect high interest returns to be sustained forever.
“The drivers of high capital gains such as real property and local shares are showing signs of peaking and we anticipate a period of stabilisation before a market correction,” he said.
“In addition, the appreciating kina against the Australian dollar impacted our Australian-denominated investments as margins from currency exchange gains declined.
“All these factors are beyond the board’s control and influence.
“The Board regrets the inconvenience that the delay of announcing year end results is causing and assures members that a detailed statement will be made in due course.”

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