story of an expensive campaign

Politics in the boardroom - the story of an expensive campaign

Alan Morris, company director, associate of Papua New Guinea political leaders and once mastermind of a plan to keep two political parties in funds, has emerged from a turbulent 20 months of bitter boardroom in-fighting which touched the fringe of PNG politics. PIM Editor ANGUS SMALES, who was in Port Moresby when the judgement was handed down, describes how one of the biggest civil actions in PNG legal history has found Morris was the victim of a boardroom campaign to discredit him and has awarded him more than half a million dollars against the company he created.

There's always been something of the go-gelling politician in the make-up of Alan Arthur Morris, Australian ex serviceman from World War 11, one-time carnival showman, taxi operator, and eventually chairman, managing director and driving force of PNG Associated Industries which he built into a prosperous Papua New Guinea company listed on the Sydney Stock Exchange.

The company's interests involve automotive sales and service, air conditioning, solar healing and air freight services.

Morris climbed to all the trappings of the ‘establishment’ businessman. He fought his way back to health and work after a stroke which would have warned many men to step down.

He was an extensive overseas business traveller, his Volvo car was registered AAM.OOO, he was active in Rotary and had travelled to Rotary conventions throughout the world, he had a readiness to lend his influence to causes which caught his attention, and his house (com plete with swimming pool) was high on a Port Moresby hill looking out to the ocean. But for all this he never fitted neatly into the ‘establishment’ image, and that may well have been an ingredient in the turbulence which surrounded him. ‘He is an abrasive man’ a witness told civil court proceedings in Port Moresby which have now cleared Morris of allegations of misconduct.

At the height of his personal power and influence in business live years ago and on the eve of political independence in PNG Morris was on the calling lists of government and opposition alike. Earlier he had been involved solely with backers of the United Parly which became PNG's first official parliamen tary opposition. By 1975, how ever, he was associating also with advisers to the Pangu

Parly which became PNG's first national government under Michael Somare.

There’s little doubt his in volvements at first were the reactions of a prudent business man who seeks to protect his investment in the arena of new nation politics, but he was clearly a man who liked to be in the middle of things. Into the picture then came Samoa born Walter Lussick who had been a member of parliament in pre-independence PNG and had subsequently become senior advisor to the prominent Papua New Guinea politician Sir Tei Abal, PNG’s first leader of the opposition after indepen dence.

Morris and Lussick devel oped a plan in which the Morris company was to be taken over by a holding group, removed from public listing and effectively owned by the two main (and opposing) political parlies of the time Sir Tei Abal’s United Parly and Michael Somare's Pangu Party.

The check and balance of having opposing parties was seen as a means of removing the sensitivities of linking politics with big business, while at the same lime ensuring a source of political funds. Somare and Sir Tei both signed letters of intent, although Pangu pulled out at the last moment and other PNG national groups were brought into the structure.

Lussick (who has since be come chairman) and Sir Tei Abal went on to the board.

Morris was retained as chair man and managing director under a five-year contract which provided retirement settlements as well as salary.

The financing relied on the fact that by transferring ownership to PNG nationals the firm qualified for a five-year tax holiday, helping it to pay out Morris and other original share holders and to be fairly

generous in salary settlements for Morris and other non nationals being phased out.

In retrospect it was probably unfortunate that Pangu pulled out because the way was left open for less-satisfactory liaisons. There were subsequent rearrangements of the company structure, growing boardroom tensions, arguments about the real extent of United Party holdings and finally what was referred to in court as a person ality clash between Lussick and Morris.

A turning point came on March 2, 1979 when a meeting of directors purported to sack Morris. Subsequently he was accused by the company of grave misconduct as a result of which his retirement deed was not recognised. The grave mis conduct was said to involve his manner of obtaining a personal loan, arrangements under which a company car was maintained in Brisbane, the manner in which a financial guarantee to a Port Moresby football club had been minuted, alleged over-drawings of salary, some book-keeping matters, al leged concealment of over payments to the company by a government department, claims that confidential information was leaked and claims of conflict between duty and per sonal interest.

Morris fought back with a successful injunction when the company attempted to evict him from his company house, and he settled down to a long fight in a situation which in creasingly polarised political and business factions in Port Moresby.

Morris launched an action against the company on grounds of wrongful dismissal, claiming damages based on salary and retirement contracts.

It became one of the biggest civil actions in PNG legal history, heard over more than

three months by Mr Justice Andrew Wilson in the National Court, Port Moresby, and run ning to more than 2000 pages of transcript. Three parliamen tarians, including Sir Tei Abal, were among the 16 witnesses for the company.

In a highly-detailed judge ment Judge Wilson has now found that none of the alle gations against Morris amounted to misconduct, let alone grave misconduct. Meet ings purporting to sack Morris were invalid, he said.

Judge Wilson was critical of much of the company’s de fence evidence, referring to selective memories, half-truths, evasions and cover-ups. He said he had been impressed by the demeanour and candour of Morris whose evidence ‘was credible and had the ring of truth’. He found on the evi dence that control of the com pany had moved into the hands of Lussick and Sir Tei Abal.

Lussick believed Morris was a threat to him, and accordingly a plan was formulated to get rid of Morris. A man described as ‘a tough young solicitor’, Russell Hay, had been brought on to the board with the initial task ‘to engineer the sacking’ of Morris, Judge Wilson said.

The court awarded Morris a total of K 433 598 (equivalent to about $590 000) made up of his retirement deed entitlement of K 270 000, salary and salary associated claims. He was also awarded costs. The court up held a counter-claim by the company that it be repaid the K 45 000 loan it had made to Morris.

The company has announced it will appeal. (Mr A. Goldberg, QC and Mr G. Beaumont, instructed by Francis and Francis for Morris; Mr F. McAlary QC and Mr B.

Rayment, instructed by Russell Hay and Company for PNG Associated Industries).