VNPF oversight of Wilco and Bouffa investments highly irregular, inquiry hears

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The trust that the Vanuatu public have in the Vanuatu National Provident Fund, the news today shows, has been frequently abused in a series of large investments by the fund. In the case of the purchase of the Wilco properties, there was a conflict of interest for the CEO of Wilco, Tukana Bovoro, to also be on the Board of the VNPF while the board was negotiating to buy Wilco Hardware Holdings Limited. Bovoro declared his conflict of interest, yet the VNPF management at the time did not see fit to step in, despite the VNPF Act requiring those with conflicts of interest to absent themselves from deliberations over matters relating to their interests, and the investment was given the go-ahead. The issue was hotly debated in the media at the time, but incredibly, the VNPF Board accepted the vendor’s own valuation, VNPF Board Member Ephraim Kalsakau said. He went on: the Board did not require an independent valuer to value the two properties and “did not request the audited financial investments prior to the transaction.” MP Kalsakau said he did not believe this investment was in the best interests of Fund members.

Former VNPF General Manager Kelip Sandy, a long-time employee of the VNPF, was questioned concerning the Bouffa Ranch purchase and that of the Milai property on Santo. Sandy had allegedly requested changes to the parts of the Board’s Investment Policy Guidelines (IPGs) that restricted investments in non-income generating businesses and property development. Sandy said he believed changes to the IPG guidelines had been sanctioned by Board, the Governor of the Reserve Bank and the Minister of Finance. Sandy sidestepped questions related to the value of the investment where Bouffa is concerned saying “Bouffa was purchased purposely for housing, which is for members’ services”.

Milai (purchased also for housing) was bought by the VNPF for Vt 370 million vatu, even after four separate valuers calculated the acceptable value of the property to be in the range of Vt 250–340 million. Sandy, who worked his way up in the VNPF, was made GM in 2009. The inquiry continues. (Daily Post)