of politics

The business of politics

Papua New Guinea’s finance minister and deputy prime minister, Sir Julius Chan, acquired more than 800,000 keenly sought Placer Pacific shares through his family, family companies and his People’s Progress Party staff.

That was in July when the company was floated in Australia’s biggest ever stock market launch. Since the media made this public in October, there has been a long running public argument over the Chan purchases.

The Opposition, led by Mr Michael Somare and his deputy Fr John Momis have led the criticisms, saying that once again the leaders have benefited while the people have missed out.

Sir Julius has stood his ground, steadily ignoring cedis for his resignation, adding that he has nothing to hide.

Prime Minister Paias Wingti, however, found himself obliged to bend with the political wind in as much as he indicated that he will set up a commission of inquiry if Sir Julius’ critics can produce evidence of any wrong doing.

SINCLARE SOLOMON in Port Moresby has been following the controversy.

Sir Julius Chan, for the first time in his long political career, stands publicly accused of acting “im properly” by making a cool $1 million for his People’s Progress Party and for his family com panies.

Apart from the opposition leaders who howled for his resignation, Sir Julius took heavy criticism from the in fluential Melanesian Council of Churches as well as from sec tions of the very government of which he is deputy leader.

The council which represents the Roman Catholic and estab lished protestant churches in the country said: “The moral code of politicians amounts to hypocrisy, self interest, status and the trappings of office.

“Integrity, service and a genuine love and concern for the ordinary people who elected them seems to be ab sent as they continue day after day their ridiculous antics in the so-called house of parliament.

“This latest example of Sir Julius, self-professed crusader for ordinary Papua New Gui neans, is only another example of that hypocrisy which leaves this country in a state of cynicism. ”

Strong stuff. And for Sir Julius, one of the few politicians who run successful businesses (many run unsuccessful businesses) and a deeply reli gious man, particularly hard to take.

But he didn’t take long to reply. He said he had nothing to hide and had not attempted to conceal his share purchases.

“If I had wanted to be sneaky, I would have gone overseas,” he told the PNG press corps.

“I have been a businessman all my life and have never made money in politics. At the end of the day it’s the conscience that counts.

“I would take a similar gam ble again,” he added defiantly.

The various Chan concerns bought 818,700 shares or just on seven per cent of the PNG allocation.

Confirming that he had taken up the shares, he said, “It was done through the normal chan nels and no preferential treat ment was given. For example Lady Chan only received half of her requested allocation, like most other people.”

Sir Julius was at home in Rabaul when he was contacted by business advisers with a proposal to buy Placer shares.

He agreed and at the same time gave his guarantee for bank finance to fund the purchases.

He said the investment was aimed partly at paying off debts of more than K 1 million owed by his various companies. The shares were on-sold to the companies the week they were floated on the Sydney ex change.

He also agreed to guarantee the finance for People’s Prog ress Party officials to buy shares

in order to fund the 1987 election campaign. ’The party got half of what it asked for but, given the right price, we won’t have to fund our candidates next year.”

Said Sir Julius: “Placer Paci fic were not going to allocate the promised 12.8 million shares to PNG because the underwriters had visisted PNG and, based on the assumption that exchange controls were not

going to change in the near future, decided that only 1.5 million shares would be taken up in PNG.

“They returned to Australia and issued the other shares to their mates without informing the PNG government.”

According to Sir Julius, prime minister Paias Wingti was furious at this development and directed his finance minister to ensure that the full 12.8 million shares were allocated to PNG and to ensure that the country could absorb them.

As a result, at least 11 million shares were earmarked for PNG and this was later in creased to 11.7 million. The country’s exchange controls were temporarily relaxed so that local companies and indi viduals could make their purch ases.

Placer Pacific issued a total of 128,574,000 $1 shares and within minutes of trading these were changing hands at $2.

The shares have since peaked at over $3.

Ten days after trading began, three large parcels of shares were sold in one afternoon two for $BOO,OOO and one for $700,000. It was believed that

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