MRDC investigates MRSM

By Tony Stone

Mineral Resources Development Company (MRDC) has begun investigations into allegations of corruption by the management of its subsidiary Mineral Resources Star Mountains (MRSM).

banner2MRDC’s action was in response to a PNG Echo story exposing alleged financial mismanagement of MRSM companies which include Fubilan Catering Service (FCS), the Tabubil caterer that provides meals for the now 100% state-owned Ok Tedi Mining Limited.

CEO MDRC, Augustine Mano
CEO MDRC, Augustine Mano

MRDC Managing Director, Augustine Mano, replied to PNG Echo’s allegations in an email, this week:

We have taken the allegations (raised by PNG Echo) seriously and are taking appropriate action to address the issues. We have engaged KPMG to audit FCS accounts and (are) also doing our own investigations..

CEO Mano added that the task would be a challenge for MRDC who could only act within its jurisdiction.

Audits

Mr Mano’s assurances notwithstanding, it is the information of PNG Echo that auditing of MRSM accounts is habitually late.

Paul Povey , Chairman of MRSM Group of Companies
Paul Povey , Chairman of MRSM Group of Companies

The 2012 accounts, which should have been signed off within the first half of 2013, are still with the auditors Deloitte Touche Tohmatsu.

The 2009 accounts were audited in 2011 by KPMG who in the process observed a serious lack of basic book keeping including inadequate acquittal of expenses by the corporate credit card-holder Paul Povey.

It was a lack of sound financial accountability by the current MRSM management since 2008 that has led to a number of employees quitting MRSM.

A former expatriate employee said he had to leave because he could no longer be part of decisions and actions that were anti-corporate governance.

Of the auditing process, a former employee remarked:

It was interesting that Paul (Povey) was never around to answer questions. He seemed to be out of town every time the auditors arrived in Tabubil.

He told PNG Echo that even Povey’s fellow management colleagues at Tabubil Engineering and the Weigh Inn Hotel (two other of MRSMs investments) did not have the answers for the auditor.

“This of course resulted in huge gaps in the company’s accounts and incomplete and untidy audit process.”

This year nothing has changed.

Fly River
Fly River

When auditors from Deloitte Touche Tohmatsu arrived in Tabubil on the 29 September this year to audit MRSM, its Head, Paul Povey, was away, as he’d been in preceding years –  a fishing trip with Ok Tedi Mining Ltd (OTML) managers to Suki in the Middle Fly, then on to Cairns and Singapore. The auditors left on 26 October.

 

We’ve had enough and we’re not taking it anymore

The PNG Echo story has sparked spirited discussion among Tabubil residents with readers sharing their views on social media. Some reactions:

“There is no smoke without fire.”

“Shareholders and the FCS and MRSM boards should start asking questions as to why whistle blowers are making noises about this.”

“MRDC must not let the Ok Tedi landowners down by not doing its job. Something is definitely going on within these (MRSM) companies.”

“With the help of social media, PNG is finally standing up to corrupt leaders, managers and employees. We say no to corruption.”

“I appeal to the people of the Star Mountains to ask their board members why the media is publishing such stories about their companies.”

“OTML’s Nigel Parker’s ‘don’t care’ attitude must be seen by Ok Tedi landowners and the PNG mining industry as totally irresponsible and dangerous.”

“Tabubil township knows Nigel is as close to Paul Povey as Alan Breen was,” so Nigel’s position is already compromised.”

Another former Tabubil resident and employee of OTML took the opportunity to warn corrupt managers and employees to take heed of PNG’s fight against corruption.

 

 

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One thought on “MRDC investigates MRSM

  1. Hi Susan,

    Did you know Weigh Inn Hotel is always understaffed lately? They recently advertised positions but no recruitment has been done yet.

    It would be worth investigating.