Former Minister of Transport accepts that Cabinet was misled [1]
Thursday, February 25, 2010 - 22:15. Updated on Friday, May 9, 2014 - 21:21.
In another interesting turn of evidence provided by the former Minister of Transport Paul Karalus on February 25, he accepted a submission that he misled Cabinet in a memorandum regarding due diligence on the Ashika.
In a Cabinet Memorandum he had submitted that the Transport had sought full technical data to allow for due diligence hence the vessel was well maintained based on a December 2008 survey.
But he pointed out that this transpired because he too was misled and lied to by the SCP Managing Director, John Jonesse, and the former Marine Director, Bill Johnson.
Evidence had established that the so-called December 2008 Survey he relied on, claimed to have been issued by the Fiji Marine Board, was not in fact so, and was, as agreed to by the former Minister, a piece of rubbish. The inquiry confirmed the document was unsigned, undated and not authored.
Counsel Assisting Manuel Varitimos put to the former Minister that this survey was acompletely a worthless document.
The former minister answered that it looks that way.
On his second day of evidence, Karalus, who looked flustered from the intense questioning by counsel,gave evidence for a few hours in the morning before being adjourned to the afternoon session.
He confirmed to the inquiry that on April 20 he signed the Memorandum to Cabinet, typed it and attached to it documents.
The memorandum basically stated, "the Ministry of Transport has sought full data to allow dor due diligence to be completed . . . while the vessel is older than the Olovaha it has been very well maintained."
"Where did you get the information to prepare this document?" said the counsel, and the former minister replied that it was through discussion with Jonesse.
"Do you agree no rational person can make an informed decision on the so-called certificate?' said the counsel, and he answered yes.
Minister's responsibility
He accepted counsel's submission that as Minister he was required to provide accurate and reliable information to Cabinet so as not to mislead Ccabinet.
The former Minister said that he knew Cabinet would never purchase the vessel without proper due diligence conducted, and that included an independent survey and valuation. He also agreed that independent and thorough due diligence should have been conducted by Shipping Corporation and Government and it was of the Transport Ministry to examine vessel prior to purchase.
When provided of a report by Fiji Maritime Safety Administration which, stated that the Ashika was a maritime disaster waiting to happen he confirmed he never saw such document.
"Where did you get the information in your submission that vessel was well maintained?" said the counsel.
The former minister said he got it from Jonesse. He repeatedly emphasised his reliance on him as he was the Shipping Managing Director.
"But there was no document to support this," said the counsel.
The former minister said he was not sure and pointed out an audit document by David Shaw. The inquiry had learned this was a forged document on Jonesse's behalf.
The former Minister said at the time when he saw it, if he had known it was forged it would not have proceeded.
Jonesse
He confirmed that he relied on Jonesse that the vessel was well maintained, which in return came out of a December 2008 survey. He confirmed he obtained this orally from Jonesse that it was well maintained.
"Could it in fact be that because the so-called survey was not issued from Fiji Marine Board you made an error in your submission to Cabinet?" said the counsel.
The former minister answered that he did not know it at the time that the document was worthless and he was of the understanding that due diligence processes was to be completed.
"But you did not have any documents to support your submission to cabinet?" said the counsel.
He said yes, and agreed that the Minister of Finance did not have any input to the submission as he only supported for funding purposes.
He agreed that he had no document to support his submission but he understood that Jonesse and Johnson agreed they would carry out due diligence.
"But they never told you that they did, in fact, carry it out," said the counsel, and Karalus said yes.
On the Cabinet's April 23 meeting, which resolved to purchase Ashika following the April 20 memorandum, it had two documents: firstly, your submission; and the agenda to complete due diligence, said the counsel and Karalus he agreed.
The former Minister also confirmed that he could not provide any written correspondences with Johnson about Ashika because there was none and it was similar to Jonesse as he never sought their advice nor they sought his in relation to the prospective purchase.
But he asserted to the inquiry that he relied on Jonesse and Johnson because they had the technical expertise in maritime and he had not.
The former Minister was continue his evidence on Friday February 26 and again on Saturday.