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High Court of Fiji |
IN THE HIGH COURT OF FIJI
AT SUVA
CRIMINAL JURISDICTION
Crim. Case No: HAC089 of 2010
FIJI INDEPENDENT COMMISSION AGAINST CORRUPTION
V
Hearing Dates: 14 March – 6 April 2011
Summing Up: 11 April 2011
Counsel: Mr. N. Marasinghe & Ms S. Sanmorgam for FICAC
Mr. D. Sharma for 1st Accused
Mr. H. Nagin for 2nd Accused
SUMMING UP
Madam Assessors and Gentleman Assessor
[1] It is now my duty to sum up to you. In summing up the case I will direct you on matters of law which you must accept and act upon. You must apply the law that I direct you on in this case. On the facts however, it is for you to decide what facts to accept and what facts to reject. In other words, you are the masters of fact.
[2] If, in the course of this summing up, I express my opinion on the facts, or if I appear to do so, it is entirely a matter for you whether you accept what I say or form your own opinions.
[3] All three Counsel have made submissions to you at the end of the trial, about how you should find the facts of the case. That is their right. But you are not bound by closing submissions. If what they have said appeals to your own sense of judgment, then you may accept them. You are the representatives of the community at this trial and you must decide what really happened in this case.
[4] The witnesses called in the trial had to rely on their memory of events that occurred in 2003. Witnesses, whoever they may be, cannot be expected to remember with crystal clarity events which occurred eight years ago. You should make allowances for the fact that with the passage of time, memories fade.
[5] You are entitled to use your common sense when considering the evidence and you come to judge the reliability of any individual testimony you may consider the effects of time on memory and give such weight as you see fit. You do not have to accept everything a witness has said. You may think that part of what somebody has said is credible and reliable. But you may have doubts about other parts.
[6] You will not be asked to give reasons for your opinions but merely your opinions themselves. Your opinions need not be unanimous although it would be desirable if you could agree on them. Your opinions are not binding on me but they will carry great weight with me when I come to deliver my judgment.
[7] On the question of proof, I must direct you as a matter of law, that the prosecution bears the burden of proving the accused persons' guilt. That burden remains throughout the trial upon the prosecution and never shifts. There is no obligation upon the accused persons to prove their innocence. Under our system of criminal justice, an accused person is presumed to be innocent until he is proven guilty.
[8] The standard of proof in a criminal case is one of proof beyond reasonable doubt. This means that you must be satisfied so that you feel sure of the guilt of the accused before you can express an opinion that he is guilty. If you have any reasonable doubt about the guilt of the accused you must express an opinion that he is not guilty. You may only express an opinion of guilt if you are satisfied so that you are sure that the accused persons committed the offences alleged.
[9] The defence made submissions on why certain witnesses, and in particular Michael Benefied, were not called by the prosecution. Counsel for the prosecution told you that Michael Benefied has gone overseas and that is why he could not be called to give evidence. You must not speculate why certain evidence was not led and you must not speculate on any evidence that has not been called. However if you are of the opinion that the prosecution could have called a witness who could have given material evidence and no suitable explanation has been given for his or her absence you may draw the inference that witness would not have given evidence favourable to the prosecution.
[10] Your deliberations must be based solely and exclusively upon the evidence which you have heard in this court and upon nothing else. You must disregard anything you may have heard or read about the case outside this court. Your duty is to apply the law to the evidence you have heard in this court.
[11] The accused persons are charged with one count each of abuse of office. On count 1, the first accused is charged.
[12] On count 2, the second accused is charged. The charge against the second accused alleges that he abused the authority of his office for a personal gain. When the charge of abuse of office alleges a personal gain, the charge is more serious than a charge of abuse of office that does not allege a personal gain.
[13] I must direct you to consider the evidence against each accused and on each count separately. You must not assume that because one accused might be guilty on one count, then the other accused is also guilty on the other count.
[14] In order to prove the offence of abuse of office, the prosecution must satisfy you beyond reasonable doubt of the following elements:
1. The accused was employed in the public service,
2. He did an arbitrary act,
3. He acted in abuse of the authority of his office,
4. The act was prejudicial to the rights of another.
[15] The first element is not in dispute. It is not in dispute that the first accused by virtue of his position as the managing director of Post Fiji Limited and the second accused by virtue of his position as the chairman of the Board of Directors for Post Fiji Limited were employed in the public service. The remaining elements are in dispute.
[16] The second element is that the accused did an arbitrary act. In law, an arbitrary act is an unreasonable act, a despotic act, act which is not guided by rules and regulations but by the wishes of the accused.
[17] The arbitrary act alleged against the first accused is that he approved and authorized payment of $75,000 for the purchase of a clock without following proper tender procedures. The prosecution says that the procedures at Post Fiji Limited required tenders to be called for any purchase exceeding $10,000 in value and by approving the purchase of the clock for $75,000 without calling for tenders, the first accused deviated from the tender procedures and acted unreasonably, despotically, in accordance with his wishes.
[18] The defence says that there was no requirement for the first accused to call for tenders because the purchase of the clock was part of a capital project approved by the Board of Directors, and therefore, he did not breach any procedure by not calling for tenders. The defence also says that you should consider the first accused had a mistaken belief about the procedures of Post Fiji Limited.
[19] You will first consider whether the first accused was required by the procedures to call for tenders for the purchase of the clock. If you feel sure that the tender procedures of Post Fiji Limited applied to the purchase of the clock, then you must consider whether the first accused was mistaken.
[20] Mistake of fact is not a defence but a matter which exonerates criminal responsibility. To absolve the first accused from criminal responsibility the belief though mistaken must be honest and reasonable. The prosecution must negate the accused's belief that he acted under an honest and reasonable but mistaken belief. You must be satisfied beyond reasonable doubt that the first accused honestly believed that what he did was not wrong and that what he did was reasonable when applying the standard of ordinary man from the accused's environment. You must consider all the evidence including what the first accused said in his caution interview and in his evidence in court about the tender procedures when you consider whether he acted under honest and reasonable but mistaken belief.
[21] If you feel sure that the first accused did not honestly and reasonably believed that the tender procedures did not apply to the purchase of the clock, then go on to consider whether he acted unreasonably in deviating from the tender procedures in approving and authorizing payment of $75,000 for the clock. It is a matter for you to decide.
[22] The arbitrary act alleged against the second accused is that he authorized the purchase of a clock from a company in which he has a significant financial interest. The prosecution says that the second accused deviated from the rules that required him to declare his interests in the company from which Post Fiji Limited purchased the clock.
[23] The defence says that the second accused did not deviate from any rules as he had already given a general notice of his interest in the company from which the clock was purchased and that he had not personally authorized the purchase of the clock. Whether the second accused authorized the purchase of the clock is a question of fact for you to decide. If you feel sure he authorized the purchase of the clock then you must consider whether he did an unreasonable, despotic act, in accordance with his wishes.
[24] The third element of the offence is that the act must be in abuse of the authority of office. When someone abuses the authority of his office, he uses his position for some illegitimate agenda, some reason which is not a proper reason according to institutional procedure. He acts in bad faith, for an improper motive to harm someone or show someone an advantage or favour.
[25] The prosecution says that the first accused used his position to confer an advantage to the second accused so that the second accused gets to supply the clock from a company in which the second accused had financial interest. The first accused denies any improper motive when he approved the purchase and payment of the clock.
[26] The prosecution says that the second accused used his position to have his company supply the clock so that he could personally gain. The second accused denies any improper motive or personal gain when the clock was purchased from a company in which he has financial interest.
[27] To decide whether the accused persons abused the authority of their office, you need to consider what motivated each accused to act in the way they did. If he had some improper motive or acted in bad faith and used his position to achieve that motive, then this element is proven. In order to understand what the accused had in his mind, you need to look at all the evidence and draw your own conclusions about his motives.
[28] The last element is that the accused persons act must have prejudiced the rights of another. It is not necessary to prove prejudice of a specific right. When a person is prejudiced, his interests are put at a disadvantage. On both counts, the prosecution alleges that rights of Post Limited were prejudiced. Whether the interests of Post Fiji Limited as a government entity were put at a disadvantage by the accused persons is matter for you to consider having regard to all the evidence.
[29] On the basis of these legal principles that I have explained to you, you must consider the evidence in this case and decide what has been proved. As I said earlier, it is your job to assess the credibility of the witnesses. You decide who is truthful and to be believed. However, there are some further directions I give on a few items of evidence which you must accept and apply.
[30] Adish Naidu and Lute Powell were cross-examined by the defence on their statements made to FICAC. Naidu's statement is exhibit D23. Powell's statement is exhibit D38. Both Naidu and Powell admitted that some of their statements conflicted with their evidence in court. I will remind you of their evidence later in my summing up. What use may you make of exhibits D23 and D38?
[31] You have undertaken to try the case according to the evidence. If a witness comes to court and states what he saw and heard, that is evidence of what he saw and heard. Whether you accept that evidence or not is another matter, but in law it has the status of evidence of what he asserts.
[32] On the other hand, if on a previous occasion, not in this court before you, the witness stated what he saw or heard on a particular day, that is not evidence that he in fact saw that event or heard that comment. It is merely evidence that that is what he asserted at some earlier time.
[33] So, what you may do is take into account the fact that he has made such a previous statement when you consider whether he is believable as a witness. But the statement itself is not evidence of the truth of these matters, except for those parts of it which he has told you in court are true.
[34] The defence points out that the statements of Naidu and Powell are inconsistent with their evidence in court. I will remind you of those inconsistencies when I summarize the evidence for you later in my summing up. In examining suggested inconsistencies, you will wish to decide, first, whether there is in fact and in true context, an inconsistency; and if you decide that there is one, you will wish to decide whether it is material and relevant or, on the other hand insignificant or irrelevant. If there is an inconsistency, it might lead you to conclude that the witness is generally not to be relied upon; alternatively that a part only of his or her evidence is inaccurate; or you may accept the reason he or she has provided for the inconsistency and consider him or her to be reliable as a witness.
[35] Another direction I wish to give relates to Naidu's evidence. Naidu is a crucial witness for the prosecution. His evidence implicates both accused persons. You must approach Naidu's evidence with caution. The reason I give you this direction is not because I wish to convey to you any view of the credibility of Naidu, but because in every case the law requires that I give you this direction.
[36] The reason you must approach Naidu's evidence with caution is that he may be regarded as having some purpose of his own to serve. Naidu was the supervising architect for the GPO building. The idea of an exterior clock on the new façade of the GPO building was his brain child. He made the drawings and budgets for the renovations. The defence points out that Naidu carried out an illegal construction without the knowledge of the senior executives of Post Fiji Limited. Naidu accepts that the construction took place without the plans being approved by the Suva City Council. He gave an explanation for this and said the plans were eventually approved. The defence also points out that in his working cost summary dated 10 April 2003 (exhibit D2), Naidu budgeted $75,000 for an exterior clock and calculated 9.05% fee on that amount. The defence says that Naidu had gained more than the company that actually supplied the clock for $75,000. You may think that many a person in Naidu's position would be tempted to minimize his own role in what had happened, with corresponding temptation to exaggerate or distort that part played by others. He may have a motive for falsifying evidence, or for distorting or suppressing the truth, which is not immediately obvious. What it all amounts to is that you should scrutinize Naidu's evidence with special care. It is open to you to act upon his evidence if you are convinced of its truth bearing in mind the warning I have given.
[37] You will recall that Naidu in his evidence said that the first accused told him that the second accused wanted to supply the clock. If you accept Naidu's evidence that the first accused did say that the second accused wanted to supply the clock then I must direct you that that statement of the first accused is evidence only against him and not the second accused. The law is that when an accused implicates his co-accused in a statement made out of court and not in the trial; that is not evidence against the co-accused. So the statement that the second accused wanted to supply the cock, if you accept was made by the first accused to Naidu, is evidence only against the first accused.
[38] It is alleged that the first accused lied to Inspector Seru in saying he was not aware of the existence of the Logistics Management Procedures that contained the tender procedures for Post Fiji Limited and that the second accused lied to Kamikamica saying the clock was a gift. The accused persons deny the alleged lies. You are entitled to consider whether the lies support the case brought against them by the prosecution. In this regard you should consider two questions.
[39] You must first decide whether the accused did in fact tell lie. If you are not sure he did, ignore the matter altogether. If you are sure, then next consider why did the accused lie? The mere fact that an accused tells a lie is not in itself evidence of guilt. An accused may lie for many reasons, and they may possibly be 'innocent' ones in the sense that they do not give any indication of guilt, for example lies to bolster a true defence, to protect somebody else, or out of panic or confusion. If you think that there is, or may be, an innocent explanation for his lie then you should take no notice of them. It is only if you are sure that he did not lie for an 'innocent' reason that his lie can be regarded by you as evidence which supports the prosecution's case.
[40] The caution interview records of the accused persons are in evidence. What an accused says in his interview is only evidence against him and not against his co-accused. What weight you attach to the statements of the accused persons in their interviews is entirely a matter for you. To some questions the first accused person's response was no comment. The second accused elected to remain silent in most part of his interview. The law is that any person suspected of a criminal offence or charged with one is entitled to say nothing when asked questions about it. You must not hold his silence or refusal to answer questions against him. The exercise of the right to silence cannot amount to an admission of any kind nor can it be taken to reflect a guilty conscience.
[41] Finally, there is the evidence of the accused persons. I must remind you that when an accused person gives evidence he assumes no onus of proof. That remains on the prosecution throughout. Their evidence must be considered along with all the other evidence and you can attach such weight to it as you think appropriate. If you believe them or do not feel sure of their guilt, then your opinion must be not guilty. If you reject their evidence as being untrue; that does not mean that they are automatically guilty of the offence. The situation would then be the same as if they had not given any evidence at all. They would not have discredited the evidence of the prosecution witnesses in any way. If prosecution evidence proves that they committed the offence then the proper opinion would be guilty.
[42] The second accused has given evidence of his good character and as with any man of good character his good character supports his credibility. This means it is a factor which you should take into account when deciding whether you believe his evidence. In the second place, the fact that he is of good character may mean that he is less likely than otherwise might be the case to commit this crime now.
[43] I have said that these are matters to which you should have regard in the second accused person's favour. It is for you to decide what weight you should give to them in this case. In doing this you are entitled to take into account everything you have heard about the second accused, including his age and his accomplishments as a businessman. What weight you give to his good character when deciding whether the prosecution has satisfied you of his guilt is entirely a matter for you.
[44] I now remind you of the prosecution and defence cases. In doing this it would be tedious and impractical for me to go through the evidence of every witness in detail and repeat every submission made by counsel. I will summarize the salient features. There are also a number of documents which have been constantly referred to during the trial. If I do not mention a particular witness, or a particular piece of evidence, or a particular document or a particular submission of counsel that does not mean it is unimportant. You should consider and evaluate all the evidence and all the submissions in coming to your decision in this case.
[45] In this case the prosecution and the defence have agreed to certain facts. You have been given copies of the Agreed Facts. The Agreed Facts are part of the evidence and you should accept these Agreed Facts as accurate and the truth. They are, of course, an important part of the case. The agreement of these facts has avoided the calling of a number of witnesses, and thereby saved a lot of court time.
The prosecution evidence
[46] I will summarize the prosecution evidence first.
[47] The first witness was Adish Naidu. Naidu is the author of the design of the new General Post Office (GPO) building. Exhibit P2 is the design or drawing plan. The design mentions a clock. The date of the design is April 2002. The clock was to be supplied by Post Fiji Limited. Naidu wrote a letter to the first accused advising him of the revised cost for the new façade. The letter is exhibit P3(1). Attached to the letter is the proposed budget for the new façade (exhibit P3(2)). Naidu did not mention any clock in his proposed budget.
[48] Naidu came to know from a discussion with the first accused that Mahendra Patel, the second accused wanted to supply the clock. Naidu then had a discussion with the second accused about the clock that would be installed on the new façade. The second accused directed Naidu to liaise with Bhupendra Patel.
[49] After the meeting with the second accused, Naidu facilitated the supply of the clock by Motibhai for the new façade. Initially, Naidu was quoted $75,000 for an 1800mm clock. The size of the clock was suggested by Naidu. Later Naidu learnt an 1800mm clock could not be provided but a 1200mm clock could be provided. The reduced size clock was acceptable to Naidu. Naidu wrote a letter dated 30 April 2003 to the first accused advising him of the reduced size clock. The letter is exhibit P4. Naidu said he never suggested that Post Fiji Limited buy a Seiko clock.
[50] In cross-examination, Naidu said he cannot recall the exact dates he had discussions with the first accused and the second accused regarding the clock. Naidu was shown a letter dated 4 December 2002 from Motibhai to him. The letter is exhibit D4. The subject is clock for Post Fiji. Naidu accepted that he requested for information about the clock from Motibhai in December 2002. Naidu accepted that a clock was shown as part of the projected image of the GPO building when he made presentation for his tender to Post Fiji Limited in February 2002. Naidu was cross-examined on his statement made to FICAC. The statement is dated 2 April 2008 (exhibit D23). In his statement Naidu said he asked Motibhai to give him a price for 1200mm diameter clock. He said the price of $75,000 was for a 1200mm clock. Naidu said he asked for an 1800mm clock. The size of the clock that is mentioned in his statement (exhibit D23) is incorrect. Naidu said he got the dimension of the clock wrong in his statement (exhibit D23).
[51] The next witness was Luke Narara. In 2003 Narara was a procurement officer at Post Fiji Limited. Narara said the procedures for purchase and procurement by Post Fiji Limited were contained in the Logistics Management Manual. This Manual is exhibit P6 and came into effect on 8 April 2003. Similar procedures existed before April 2003. Goods and services are purchased and procured by Purchase Order (RPO).
[52] The Manual (exhibit P6) provided that all goods and services exceeding $10,000 in value will be processed through the Tender Board. Part 14 of the Manual laid down the procedures for calling tenders. Part 10 of the Manual sets out the circumstances under which purchases are made without bidding i.e. obtaining of quotations. Narara said no tender was called for the purchase of Seiko clock from Motibhai because in the letter dated 30 April 2003 (exhibit P4) the first accused had approved the purchase. The letter (exhibit P4) was forwarded to him by the GM, Finance. After sighting the first accused's approval, Narara directed his assistance to issue a RPO (exhibit P8).
[53] The RPO (exhibit P8) was prepared by Siteri Waqavonovono. The order was authorized by the first accused. Original copy was sent to Motibhai.
[54] On 22 January 2004 Prouds invoiced Post Fiji Limited for a Seiko clock and installation in an amount of $75,000. The invoice is exhibit P9. Narara said the clock was purchased without tender process. He was not asked to call for tenders. Narara said the impact of ignoring the tender procedure was prejudicial to the image of Post Fiji Limited.
[55] Narara said the procurement office was denied of its duties, Post Fiji was denied of other available options and the potential suppliers of the required good were denied an opportunity.
[56] Param Raman gave evidence of the payments made by Post Fiji Limited to Prouds upon receipt of invoice for supply and installation of a Seiko clock. The payment was approved by the first accused and Raman said he had no authority to question the first accused. Raman tendered a circular (exhibit P13) issued by the first accused in 1996 when he became the Managing Director of Post Fiji Limited that once payment was approved by his office no other authority could go against it.
[57] Annie Sue tendered the Board Papers and Minutes of the Board Meeting of Post Fiji Limited. The Board Paper 30/2003(exhibit P3(1)) was put for Board's approval by the first accused. The Board was invited to approve the variation and façade upgrading of GPO building at an additional capital cost of $800,000. Purchase of a clock for the new façade is neither mentioned as an agenda item or in the cost analysis submitted with the Board Paper.
[58] Board Paper 30/2003 was presented in the Board meeting held on 2 April 2003. This was Lute Powell's first meeting after being appointed to the Board of Directors for Post Fiji Limited. The Board approved the recommendation that the contract be varied to include a further capital expenditure of $800,000 to include the façade upgrading of the GPO.
[59] In a subsequent Board Paper 35/2003 the purchase of clock from Motibhai is disclosed in the Capital Project Analysis. The Board Paper was presented in the Board meeting of 27 June 2003 to show details of expenditure incurred so far for the capital project.
[60] Lute Powell said that when the first accused presented the Board Paper 30/2003 to seek the Board's approval of the variation and façade upgrading of GPO building at an additional cost of $800,000 on 2 April 2003 there was no mention of purchasing of a clock.
[61] When the Board Paper 35/2003 was presented to the Board on 27 June 2003 Powell picked up the entry 'payment made to Motibhai for purchase of Seiko clock' for GPO in an amount of $69,422.22 in the capital expenditure report attached to the Board Paper. Powell asked the second accused to declare his interest in Motibhai. Powell said that the second accused replied to her question but she could not hear him.
[62] She asked the secretary Michael Benefield to minute her question and the second accused's response. When the Board Paper for the next meeting was delivered to her, she noticed her question and the second accused's response were not recorded in the minute. She said she realized what she was going against. She said she felt powerless to pursue the matter in subsequent meetings.
[63] Powell was cross-examined on her statement made to FICAC in which she said the issue of clock only came up in the meeting when the clock was already installed. Powell explained that in her FICAC statement she was referring to the issue of the clock for $75,000 and not $66,000. She said she is not changing her story when she said in her statement to FICAC that the Chairman's explanation did not satisfy her question.
[64] Irami Matairavula was the Minister for Public Enterprises in 2002. He tendered the letters of appointment of both accused to the Board of Directors for Post Fiji Limited. The letters are exhibits P20 and P21.
[65] Evangeline Hicks carried out a special investigation at Post Fiji Limited in 2007. Her brief finding on the purchase of an external Seiko clock is contained in a report, exhibit P25. The report states $84,375 was paid to Prouds. The undisputed evidence is $75,000 was paid to Motibhai & Company Limited. The report does not add anything to the prosecution case. I suggest you give no weight to the report and decide the case on all other evidence led in the trial.
[66] Amalaini Kuruvakadua tendered the employment contract between Post Fiji Limited and the first accused. The contract is exhibit P23.
[67] Abhi Ram is the Acting Registrar of Companies. He tendered applications for registration, certificates of registrations and annual returns and particulars of directors for Prouds, Stinson Pierce Limited, Bercharbhai Holding Limited and Motibhai & Company Limited. These documents are exhibits P26 to P32.
[68] Exhibits P26 to P32 show the nexus between these companies and the shares and the positions the second accused holds in these companies.
[69] Mr. Nagin submits that the second accused does not hold the majority shares in any of these companies and therefore he cannot have a significant interest in these companies.
[70] Mr. Marasinghe submits that the second accused does not have to hold the majority shares to have a significant financial interest in these companies. He points out that there is a close nexus between these companies controlled by the second accused for him to have a significant financial interest.
[71] What interest the second accused has in these companies is a matter of fact for you to decide. Whether the second accused has significant financial interest in these companies is also a matter of fact for you to consider having regard to all the evidence including what the accused said in his caution interview and in his evidence regarding his interest in these companies.
[72] Silvia Halafi is an employee of ANZ bank. She confirmed that the cheque for $75,000 paid to Prouds by Post Fiji Limited was deposited in Motibhai & Co. account on 12 February 2004.
[73] Susana Naiwasetawa gave evidence that she compiled the Post Fiji Corporate Governance Manual on instruction from the first accused. The instruction was given in writing on 1 July 2002 (exhibit P34). She got all twenty two manuals and bound them into one manual which is exhibit P7. She said that on 8 April 2003 the first accused issued a circular to all staff to understand and follow the operational rules, regulations and policies of Post Fiji Limited. The circular is exhibit P35. She said it was the managing director's responsibility to get the manual endorsed by the Ministry of Public Enterprise.
[74] Loraini Seru caution interviewed the first accused. The record of interview is exhibit P36. Question 39 and answer reads:
Q39. Mr. Mau we would like you to have a look at Post Fiji "Chapter 5 Part III" of the "Logistics Management Procedures" dated January 2003, Section XIV TENDERS FOR SUPPLY OF GOODS AND SERVICES, page 25 paragraph (a) Tender Board Administration. Do you agree with us that in respect of this paragraph, "All goods and services exceeding $10,000 in value will be processed through the Tender Board"? (Document shown to Mr. Mau)
A. I'm not aware of this document and its existence. If it was really in existence as the instruction for purchasing of goods and services, Post Fiji would have done all their purchasing above $10,000 through the Tender Process.
[75] Question 41 and answer reads:
Q41. Mr. Mau since you were the Managing Director of Post Fiji Limited in 2003, do you agree with us that at the bottom of page 25 a footnote reads, "Issued By the Managing Director Post Fiji Limited, Suva, Fiji First Edition January 2003" and that you would have issued this procedure? (Document shown to Mr. Mau)
A. No, I can't remember issuing it.
[76] The first accused said in his interview that he authorized the purchase order for the clock from Motibhai because the order was within his delegated authority of less than $100,000. He said that once the Board approves a capital project then the purchasing section comes to him for the signature and there is no limit.
[77] Ilaisa Bacau caution interviewed the second accused. The record of interview is exhibit P37. In his interview the second accused said that he is a shareholder in Motibhai Group of Companies. Motibhai Group is owned by family and non family shareholders. The second accused said that he is the Chairman and the Chief Executive Officer of Motibhai Group. Prouds is a retail arm of the Motibhai Group of Companies. The second accused said that he was appointed to the Board Chairman of Post Fiji Limited in 1999. In 2003 and 2004 he was the Board Chairman of Post Fiji Limited. To the remaining questions the second accused elected to remain silent. I remind you that you must not draw any adverse inference against him for exercising his right to remain silent.
[78] That was the evidence for the prosecution.
Evidence of the first accused
[79] The first accused joined the Department of Post & Telecom in 1968. Over the years, he worked in various sections. On 1 July 1996 Post Fiji Limited was created as a separate entity. The first accused was employed as the managing director. He held the post until March 2007. When Post Fiji Limited became a separate corporation, the company inherited the manuals from Post & Telecom. There were fifteen separate manuals. Each business had its own manual. In 2002 he asked Susana to compile one manual. By April 2003 the manual was compiled.
[80] Final approval was required by the Board of Directors and the Public Enterprise Ministry. To his knowledge the Public Enterprise Ministry had not endorsed the manual. The first accused says he was unfamiliar with each chapter of the manual. He consulted the General Manager Finance regarding financial matters. The first accused was responsible for putting board papers. Papers regarding capital projects were prepared by the General Manager Finance.
[81] The first accused vetted the papers before they were presented to the Board. The first accused was aware of the logistics. He says the tender process was only required for purchases beyond his level of authority of $100,000. Capital projects fell under capital expenditure. Capital projects included construction or renovation work. The authority for capital expenditure was the Board. The first phase renovation of the GPO building was approved by the Board in 2002.
[82] On 20 March 2003, the first accused had a meeting with Naidu in which they discussed the second phase renovation.
[83] On 26 March 2003, the first accused prepared a board paper for the second phase renovation which included a new façade for the GPO building. Naidu gave a costing of $800,000 for the new façade. On 2 April 2003, the Board approved the expenditure for the new façade. After 2 April 2003, the first accused met Naidu for detail costs of the new façade. Naidu gave him exhibit D2 that showed a breakdown of costing for the new façade. The first accused says he had no idea of the clock. The first accused says he met Naidu in his office on the morning of 30 April 2003. Naidu told him that he had found a clock. The issue was size of the clock. Naidu mentioned that the clock was going to be sourced from Motibhai. The first accused says he depended on Naidu.
[84] The first accused says he never told Naidu to buy the clock from Motibhai. The first accused says he never told Naidu that the chairman wanted to supply the clock.
[85] Letter of 30 April 2003 (exhibit P4) was given to the first accused by Naidu. The first accused says his interpretation of the letter was that the clock size was reduced and Post Fiji Limited is to issue an order to Motibhai. The first accused says he approved the issue of purchase order. After the clock was installed, payment was approved by the first accused. The first accused says it was his understanding that the reduction price for the reduced size clock was the responsibility of the supervising architect. It did not occur to him to re-negotiate the price when he authorized the payment.
86] During the caution interview, the first accused says he was only shown page 25 of the logistics manual. He was not shown the entire manual when asked questions about the procedures.
[87] The first accused says he wrote the minute (exhibit P13) to his finance and accounts staff on 30 December 1996 because he used to receive complaints from suppliers about delay in payments that had already been approved.
[88] That was the evidence of the first accused.
Evidence of the second accused
[89] The second accused said he was first appointed the Chairman of Board of Directors for Post Fiji Limited in 1999. He declared his interest in Motibhai in the first Board meeting of Post Fiji Limited. The Annual Returns for Post Fiji Limited were prepared by the Company Secretary, Michael Benefield. The second Accused says he does not know why his other directorships are not disclosed in the Annual Returns for Post Fiji Limited. He says he has not come across the Corporate Governance Manual of Post Fiji (exhibit P7). He cannot recall if the Manual was approved by the Board. The first phase renovation of the GPO building was approved by the Board on 5 March 2002 (exhibit P17A). After the first phase renovation was completed the second accused attended a meeting organized by the management in which they discussed the need for a new façade for the GPO building.
[90] Naidu was present in this meeting. He was asked to prepare a drawing to present to the Board. The second accused says he only attended one meeting with Naidu and not two meetings as suggested by Naidu in his letter dated 24 March 2003 to the first accused.
[91] On 2 April 2003, the Board approved the expenditure for a new façade in a sum of $800,000. The second accused says he saw the impression of the new façade which had a clock when the Board paper was delivered to him. He says he did not know where the clock was going to be sourced from when he saw the impression of the new façade. In the Board meeting of 2 April 2003, there was no discussion of a clock. The second accused says he never suggested that the clock be sourced from Motibhai.
[92] The second accused says he was never involved in the discussion regarding the reduced size of the clock with Naidu. As of 30 April 2003, the second accused says he was not aware that the clock was being purchased from Motibhai. The second accused says he never said the clock was going to be a gift to Post Fiji Limited. He says in passing by he may have said the clock was a great gift to the people of Suva after it was installed. He says he never authorized anyone to issue a purchase order for the clock from Motibhai. After this case started, the second accused says he checked his company record as to the costing of the clock. The cost of the clock was $43,509.57. After adding the freight, landing and installation charges the costs came to $65,000. $75,000 was VAT inclusive price. Profit made was $1600.
[93] The second accused says the first time he saw the clock being purchased from Motibhai was when he saw the Board Paper 35/2003 (exhibit D30). The Board Paper (exhibit D30) is dated 19 June 2003. The second accused says exhibit D30 was an information paper. Purchase of the clock from Motibhai was not listed as an agenda item. If it was listed as an agenda item the second accused says he would have declared his interest in Motibhai. In any event he says he had previously declared his interest in Motibhai. The second accused says Powell questioned him about the clock after it was installed. He gave an explanation which the Board accepted.
[94] That was the evidence of the second accused.
Count 1: the first accused
[95] On count 1, it is not in dispute that the first accused was employed in the public service as the managing director of Post Fiji Limited. It is not in dispute that the first accused approved and authorized payment of $75,000 for the purchase of a clock from Motibhai without calling for tenders. What is in dispute is that the first accused acted despotically or unreasonably, and with an improper motive to confer someone an advantage and thereby prejudiced the rights of another.
[96] The prosecution says that the first accused knew that the Chairman of the Board of Directors for Post Fiji Limited wanted to supply the clock for the GPO building. The first accused directed Naidu to see the Chairman about the clock. Thereafter Naidu facilitated the purchase of the clock from the Chairman's company. On 30 April 2003, Naidu, following a meeting with the first accused wrote a letter to him. The prosecution says that the first accused without calling for tenders, approved the purchase of a clock from Motibhai for $75,000. The prosecution says that since the clock was being purchased for an amount exceeding $10,000, the Logistics Management Procedures required tenders to be called. By not calling tenders, the prosecution says that the first accused unreasonably breached the rules of Post Fiji Limited.
[97] The prosecution says that the first accused acted unreasonably because his motive was to confer an advantage to the Chairman of the Board of Directors. The prosecution further says that the interests of Post Fiji Limited were put at a disadvantage because other options available to Post Fiji Limited were not explored by not calling for tenders.
[98] The defence says that the first accused did not breach any rule. The clock was part of a capital project approved by the Board of Directors and therefore there was no requirement that tenders be called. The defence says that the signing of the local purchase order for $75,000 was within his delegated authority.
[99] The prosecution says that when the Board approved the expenditure for the second phase renovation of the GPO building in a sum of $800,000 on 2 April 2003, there was no mention of the clock in the Board Paper that was presented to the Board. The prosecution says that the purchase of the clock did not feature in a Board Paper until after the 30 April 2003.
[100] The prosecution says that the purchase of the clock was not part of capital expenditure approved by the Board on 2 April 2003. The prosecution says that the first accused could not have honestly believed that the clock was part of a capital project approved by the Board when he approved the purchase of the clock on 30 April 2003 without calling for tenders.
[101] The defence says that if you do not accept that the clock was part of capital project approved by the Board, then you should consider whether the purchase of the clock fell within the exceptions to the tender procedures. The defence says that Prouds is the sole agent for Seiko clocks in Fiji and there was an urgency to purchase the clock before the South Pacific Games.
[102] The defence further says that even if the purchase of the clock did not fall within any exceptions to the tender procedures, then the first accused mistakenly but honestly believed that the tender procedures did not apply to the purchase.
[103] The defence says that the first accused did not act with improper motive when he approved the purchase of the clock from Motibhai for $75,000 and that he did not cause prejudice to Post Fiji Limited.
[104] The questions for you to consider in relation to the first accused are:
(1) Did the first accused honestly and reasonably believe that tenders were not required for the purchase of the clock?
(2) If he did not honestly and reasonably believed that tenders were not required, did he act unreasonably or despotically by not calling for tenders?
(3) Did he act with an improper motive to confer an advantage or favour on someone by not calling for tenders?
(4) Did he put the interests of Post Fiji Limited at a disadvantage by not calling for tenders?
[105] If you feel sure of the guilt of the first accused, then you advise me he is guilty. If you do not feel sure of his guilt or if you entertain a reasonable doubt about any one of the elements of the offence of abuse of office as I have explained to you, you must advise me that he is not guilty.
Count 2: the second accused
[106] On count 2, it is not in dispute that the second accused was employed in the public service as the Chairman of the Board of Directors for Post Fiji Limited. It is not in dispute that Post Fiji Limited paid $75,000 to Motibhai & Company Limited for supply and installation of an external Seiko clock. It is not in dispute that the second accused is the chairman of Motibhai & Company Limited.
[107] What is in dispute is that the second accused authorized the purchase of the clock, with an improper motive and for personal gain, and to prejudice the rights of Post Fiji Limited.
[108] The prosecution says that the second accused knew a clock was going to feature on the new façade of the GPO building after Naidu presented his impressions to the Board. The prosecution says that the second accused directed Naidu to facilitate the purchase of the clock from a company in which the second accused has significant financial interest. The prosecution says that the second accused acted with improper motive to benefit personally by the transaction. The prosecution says that the second accused used his position as the Chairman of the Board of Directors for Post Fiji Limited to advance his personal interest over the interest of Post Fiji Limited. The prosecution says that the second accused placed the rights of Post Fiji Limited at a disadvantage.
[109] The defence says that the second accused did not direct Naidu to facilitate the purchase of the clock from Motibhai. The second accused only came to know about the purchase of the clock when the Board Paper 35/2003 was delivered to him before the Board meeting in June 2003. By the time this Board Paper was delivered, the decision to purchase the clock from Motibhai was already made and that he had no input in that decision. The defence says that the second accused did not have a significant interest in Motibhai as he did not hold the majority shares in that company.
[110] These are the questions for you to consider in relation to the second accused:
[111] If you feel sure of the guilt of the second accused then you advise me that he is guilty. But if you are not sure of his guilt, or if you entertain a reasonable doubt as to any of the elements of abuse of office as I have explained to you, then you must advise me that he is not guilty.
Conclusion
[112] Remember to consider each count separately. Your opinions on each count are either guilty or not guilty. You may retire now. Once you have reached your opinions, please advise the court clerk, and the court will re-convene to receive your opinions.
Daniel Goundar
JUDGE
At Suva
11 April 2011
Solicitors:
Office of the Fiji Independent Commission Against Corruption for Prosecution
Messrs. R. Patel Lawyers for 1st Accused
Messrs. Sherani & Co. for 2nd Accused
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URL: http://www.paclii.org/fj/cases/FJHC/2011/208.html