Fiji Independent Commission Against Corruption v Rokovunisei - Summing Up [2012] FJHC 1044; HAC37B.2010 (25 April 2012)

IN THE HIGH COURT OF FIJI
AT SUVA
CRIMINAL JURISDICTION

HIGH COURT CRIMINAL CASE NO:
HAC 37B OF 2010

BETWEEN:
FIJI INDEPENDENT COMMISSION AGAINST CORRUPTION
PROSECUTION

AND:

OLOTA ROKOVUNISEI
ACCUSED PERSON

Counsel: Ms. Sanmogam for FICAC
Ms. Vaniqi S for Accused

Date of Hearing: 10th, 11th, 12th, 13th, 15th, 16th, 18th, 19th,20th,23rd
April 2012

Date of Summing Up: 25th April 2012

SUMMING UP

[1] Madam Assessors and Gentleman Assessor,

It is now my duty to sum up this case to you. I will direct you on matters of Law which you must accept and act upon. On matters of fact however, which witnesses to accept as reliable, which version of the evidence to accept, these are matters for you to decide for yourselves. So if I express my opinion to you about the facts of the case, or if I appear to do so it is a matter for you whether you accept what I say, or form your own opinions. In other words you are the judges of fact. All matters of fact are for you to decide. It is for you to decide the credibility of the witnesses and what parts of their evidence you accept as true and what parts you reject.

[2] You decide what facts are proved and what inferences you properly draw from those facts. You then apply the Law as I explain it to you and form your opinion as to whether the accused is guilty or not guilty.

[3] The Counsel for the Defence and Prosecution made submissions to you about the facts of this case. That is their duty as Defence Counsel and Prosecution Counsel. But it is a matter for you to decide which version of the facts to accept, or reject.

[4] You will not be asked to give reasons for your opinions but merely your opinions themselves, and your opinions need not be unanimous but it would be desirable if you could agree on them. Your opinions are not binding on me, but I can tell you that they will carry great weight with me when I deliver my judgment.

[5] On the question of proof, I must direct you as a matter of law that the onus of burden of proof lies on the prosecution throughout the trial and never shifts. There is no obligation on the accused person to prove his innocence. Under our criminal justice system accused person is presumed to be innocent until he is proved guilty.
[6] The standard of proof in a criminal trial is one of proof beyond reasonable doubt. This means you must be satisfied so that you are sure of the accused's guilt before you can express an opinion that he is guilty. If you have any reasonable doubt about his guilt then you must express an opinion that he is not guilty.

[7] Your decisions must be solely and exclusively upon the evidence, which you have heard in this court and upon nothing else. You must disregard anything you might have heard or read about this case, outside of this courtroom. Your duty is to apply the law as I explain to you to the evidence you have heard in the course of this trial.

[8] Your duty is to find the facts based on the evidence apply the Law to those facts. Approach the evidence with detachment and objectivity. Do not get carried away by emotion.

[9] You have the information before you.

[10] On Count No. 1, the accused is charged with the offence of 'Extortion by
Public officers', with an alternative count of 'Abuse of Office'. You need to consider the alternative count of Abuse of Office only if you reach an opinion of not guilty on the charge of Extortion by public officers on count no. 1. If you are satisfied of the accused's guilt beyond reasonable doubt on count no. 1, then you must not consider the alternative count.

[11] On Count No. 2 the accused is also charged with the offence of Abuse of office.

[12] On Count No. 1, it is alleged that the accused whilst being employed in the public service namely as General Manager and Chief Executive Officer of the Fiji National Provident Fund, accepted from the said Fiji National Provident Fund, for the performance of his duty as such officer, a reward of $22,773.18 beyond his proper pay and emoluments.

[13] In order to prove the offence of Extortion by public officers as charged in count no. 1, the prosecution must satisfy you beyond reasonable doubt of the following elements.

1. The accused was employed in the Public Service
2. He accepted any reward
3. It was beyond his proper pay and emoluments,
4. He accepted it for the performance of his duty as such officer.
   

[14] The first element is not in dispute. It is not in dispute that the accused was employed at the Fiji National Provident Fund as the General Manager and the Chief Executive Officer during the period relevant to this case and by virtue of such position that he was employed in public service.

[15] It is also not in dispute that an FNPF payment voucher number 6612 was raised on 6th September 2006 for Responsibility allowance of $22,773.18 payable to the accused. It is also not in dispute that an ANZ cheaque No. 006484 dated 6th September 2006 in the amount of $22,773.18 payable to the accused was also raised.

[16] Therefore the remaining elements in dispute are that the reward of $22,773.18 was beyond his proper pay and emoluments and that he accepted it for the performance of his duty as such officer in public service.

[17] The alleged offences in the alternative count and count no. 2 are Abuse of Office.

[18] On the alternative count it is alleged that the accused whilst being employed in the public service, abused the authority of his office, in that he accepted a payment of $22,773.18 as responsibility allowance from FNPF, without the authority of the FNPF Board and Higher Salaries Commission, an arbitrary act prejudicial to the rights of the FNPF.

[19] On Count No. 2 it is alleged that the accused whilst being employed in public service, and in abuse of authority of the office, did an arbitrary act, namely authorized a payment of a responsibility allowance of $20,000 per annum to Foana Tukana Nemani without the authority of the Higher Salaries Commission and FNPF Board and thereby causing prejudice to the rights of the said FNPF.

[20] The offence of abuse of office is defined by the Penal Code. The definition of the section reads:

"Any person who, being employed in the public service, does or directs to be done, in abuse of the authority of his office, any arbitrary act prejudicial to the rights of another, is guilty of a misdemeanor.

If the act is done or directed to be done for purpose of gain, he is guilty of a felony,..."

[21] The offence of Abuse of Office has four elements that the prosecution must prove beyond reasonable doubt.

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; and
4. The act was prejudicial to the rights of another person in this case the FNPF.
   

[22] The 1st element is not in dispute as I said before, that the accused was

employed in public service. However, the other elements of the offence are in dispute.

[23] The 2nd element is that the accused did an arbitrary act. In Law, an arbitrary act is an unreasonable act, a despotic act, an act which is not guided by rules and regulations but by the whims of the accused. Let me give you an example. All banks have procedures which must be followed by the bank staff. If one bank employee decided to ignore the procedures and started to lend money without filling out application forms and assessing the creditworthiness of customers that would be an arbitrary act. That is because the act is guided by the wishes of the bank employee and not by proper bank procedure.

[24] The 3rd element of the offence of Abuse of office 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 and not according to the institutional procedure. He acts in bad faith, for an improper motive to harm someone or to give someone an advantage or favour. To decide what is an abuse of office, you need to consider what motivated the accused to act the way he did. If he had some improper motive or acted in bad faith and used his position to achieve his 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 and decide whether he acted in abuse of office or not.

[25] The last element is that the act of the accused must have prejudiced the rights of another. In both counts of abuse of office the prosecution alleges that the rights of FNPF were prejudiced. So the question for you is whether the accused's actions prejudiced the rights of the FNPF.

[26] May I also direct you on the Law on mistake of fact.

The defence says that the accused approved the responsibility allowance to Foana Nemani on the authority delegated to him by the board. In that defence refers to board minute dated 22nd February 2005 (D4) and the Linkage 01 ( D4 a). Further the accused says that he believed that he was entitle to the allowance as he was overseeing the duties and responsibilities of the Chief Investment Officer when the CIO post was vacant.

[27] First you consider when approving the payment of the responsibility allowance whether the accused was required to follow the procedure, that is to obtain the approval of the board and the HSC. If you feel sure that the accused was required to follow the said procedure then you must consider whether the accused was honest and reasonable but mistaken belief that he had the authority to approve the allowance and that he was entitle to the allowance. Mistake of fact exonerates criminal responsibility. However to absolve the 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 mistaken belief. You must be satisfied beyond reasonable doubt that the accused honestly believed that he was not wrong and that what he did was reasonable. In deciding that, you must consider what a reasonable and a prudent man would do when applying the standard of the accused as CEO of the fund with his qualifications and experience.

[28] You are required to make separate assessment of the evidence as it relates to each of the elements of the charges against the accused and the prosecution has to prove each of the elements in each count beyond reasonable doubt.

[29] You have the written agreed facts before you. Further you have the agreed bundle of documents before you. Those facts and documents are agreed by both parties, and not in dispute. Therefore you may consider those as lead in evidence without dispute or challenge in court.

The Evidence

[30] The 1st witness for the prosecution was Himmat Lodhia who had been a board member of the Fiji National Provident Fund, from 2002 to 2006. Contracts of Executives are prepared by the Attorneys and given to the confirmation of the board. Final approval comes from the board, he said. Salaries of the executives are confirmed by the board and sent to the Higher Salaries Commission for approval. Human Resources policy manual was produced in court without objection and he said that HR policy manual applies to permanent staff grade 1 – 4. Executive staff and board members are excluded unless specified in their contracts.

[31] Executive staff would be General Manager, Chief Executive Officer, Deputy General Manager/Chief Operating Officer, Chief Investment Officer, Chief Administrative Officer and Chief Technical Officer. Referring to the HR Policy manual, he said that acting appointments mentioned in chapter 4 of the HR manual are applicable only to grade 3 employees.

[32] Contract of employment of the accused which was for the period of 3 years commencing from 01.06.2004 was tendered. He said that the basic salary of the CEO was $150,000 per annum which shall be subject to annual review which needs to get approval from Higher Salaries Commission. There is no clause in the contract regarding responsibility allowance. He said that is because he is the CEO and is expected to perform duties as GM/CEO overseeing all the responsibilities. CEO is responsible of all functioning of FNPF.

[33] Referring to the board minute dated 02/12/2005 marked as P4 Neale Wright was appointed as CIO with effect from 01.01.2003, he said. His resignation was accepted by the board on 01/01/2006. CEO was to oversee the investment division until new appointment was made. He further said that no responsibility allowance was approved by the board.

[34] The employment contract of Deputy General Manger Foana Tukana Nemani was produced in evidence. He said that there is no provision or clause for responsibility allowance in the contract. Referring to Board minute marked Exhibit 7 he said, that there was no discussion on the responsibility allowance and Board was not informed of any responsibility allowance. He further said CEO cannot approve a responsibility allowance which is not included in the contract to an executive officer.

[35] In cross examination he said that FNPF is a million dollar fund, and is headed by a CEO who reports to the board. CEO's function is to implement the decisions of the board.

[36] Executives are not covered by the HR manual. Answering the questions on P3 contract, he said the salary of CEO was fixed at $150,000 by the board and it has to be approved by the HSC. Guidelines of HSC was produced in evidence as P8. 5 Executives come under the guidelines, but Chief Investment Officer is not mentioned as at January 2004.

[38] Answering questions referring to board minutes D1 and D2 he said the board approved restructuring of FNPF organization. Previously investment had been handled by CEO.

[39] CIO post became vacant after Neale Wright resigned and left in January 2006. For 7 months CIO position had been vacant and he said that CEO, the accused held that post for 7 months. It was advised at CIO's departure that CEO will oversee CIO's work until a CIO was appointed.

[40] He said that Mervin Low was the Manager and Carl Mar was the assistant manager in the investment division at that period, and that Carl Mar was there when the witness left the fund in 2006. He said that when CIO left, the accused CEO had to step up. He said that if the CEO paying out any allowance to Foana Nemani it has to go to the board.

[41] Answering further the questions put to him by Defence Counsel he said that CEO does the implementation of board decisions, and in day to day business you have to give some leeway to CEO. He said if the CEO does not have time to run to the board each time he needs to do something, he can ratify it by flying minutes by subsequent board papers. Board matters CEO should go to the board, he said. There had been instances like in board paper D4 and D4(A) where to achieve the goal of implementation, the board delegated certain powers to CEO. As long as the accused was doing things in a reasonable manner, he said that the accused as CEO could have done what needed to have done to achieve the board's ends policies.

[42] Further he said if the board approves, CEO can give an acting allowance to an executive and the board goes to the HSC. However, answering to court he said that the allowance cannot be paid pending approval from board and HSC, but subsequent to approval.

[43] He said when the CIO post became vacant once Neale Wright left, while the board was looking overseas for someone, the accused acted in that post for about 7 months and finally Thomas Cotton was appointed for a basic salary of $250,000. Answering the question put to him by the defence counsel on acting allowance for CEO, the witness said that he could not see how the HR manual applies to CEO as it is applicable to employees of grades 1 – 4.

[44] When he was further questioned on the calculation of the acting allowance he said that if the HR manual covered CEO he could have calculated accordingly. CEO could have come to the board, he said. CEO cannot go to the HSC but the board and it is unethical for CEO to go directly to HSC. If the board decides to pay to CEO it should go to HSC.

[45] Witness agreed that the accused as CEO comes to each board meeting with a financial report telling the board what happens with the FNPF money. Witness also agreed that FNPF puts down annual reports.

[46] In re-examination witness said that by looking at the board minute dated 26/01/2005 produced as D2, he cannot tell court what was included in the financial accounts. He also said that CEO was not appointed formally as CIO but board minutes suggest that he will be doing the duties of CIO. In P4 dated 02/12/2005 there is no mention about holding the position on any appointment, he said. In the investment division there is a team of officers. Manager Carl Mar also was there, he said.

[47] From 2001 until Neale Wright came in 2003 investment division was still under CEO, and normally CEO will oversee the investment division, and it is part of his duties, he said. Referring to D4 (A) he said that there is a limit to CEO's authority as listed in the attachment.

[48] Executive salaries have to be approved by the HSC. Without the approval of the board and HSC, CEO cannot determine any payment which is not part of the contract of an executive. Therefore on that aspect CEO's power is limited, he said.

[49] Referring to P2, HR policy manual he said, that basically acting allowance is if you are acting in a higher graded position. To determine the salary of new senior executive position where Thomas Cotton was appointed as CIO also should go to HSC, he said.

[50] The next witness was Amalaini Kuruvakadua Acting Director, Minister of Foreign Affairs. She had joined the HSC in year 2005 and had been Manager HSC from 2007 – 2011. Her responsibilities had been, all submissions that go to HSC on remuneration packages, board fees and other payments to executive positions. They follow the requirements under HSC Act and remuneration policy of the commission.

[51] FNPF is listed as one of the prescribed officers in HSC guidelines. The HSC approval needs to be sought before making any amendments to the remuneration package of the executive positions. Before making any changes on remuneration and where changes can be recommended for executive packages when a new position is created or when a contract is renewed, approval of HSC has to be granted before implementation of the package.

[52] Remuneration package includes salaries allowances and all benefits payable to officer during the contract period. After the approval, contract can be finalized and copy of the signed contract has to be submitted to HSC. All these powers are reflected in the Act, she said.

[53] In the employment contract of CEO (P3) there is no clause on the responsibility allowance approved by HSC. No responsibility allowance can be granted if it is not in the part of the contract. To do that, to payout such an allowance to an executive officer, the board of the employer has to request the HSC for its decision before payment can be made, she said. CEO cannot approve any payment which is not part of the contract to another executive officer without the approval of HSC or the board. In (P6) Foana Nemani's contract there is no clause pertaining to a responsibility allowance approved by HSC.

[54] In cross examination she said, the Chairman of the board comes to HSC, not the employee. The witness knows only what the chairman brings to her. If the allowance is approved by the board, chairman should come to HSC. Answering the questions on performance bonus and merit pay, she said that it is based on the achievements of the key performance indicators for executive positions and not when you act in a post.

[55] As a Chief Executive Officer there is no higher position for his acting. However, if an executive leaves and the post is empty for 7 months the CEO can take responsibility of that post until it's filled. The witness said, that she could not agree that the CEO could take an allowance, when an executive is in overseas for 2 weeks and when the accused takes responsibility for such executive. However she said that it is theoretically impractical and difficult for the accused to come to HSC for approval on allowance each time the executives come and go.

[56] She said when DGM was acting for CEO for 2 weeks she could claim for an acting allowance for that she should go to the board and the board should come to HSC for approval. She agreed that it is impractical. Foana Nemani's contract there is no mention about acting or responsibility allowance. In accused contract too there is no mention about acting or responsibility allowance.

[57] Answering the questions on the CIO's salary, she said, that for positions that are filled by expatriates, the commission normally allows a higher remuneration package compared to the local package.

[58] After negotiation about the salary once and for all HSC settled the salaries of GM/CEO and DGM by letter D7 dated 20.09.2006. She said that the FNPF did not appeal the said letter D7. Acting allowance or responsibility allowance has never been a justification for increase in remuneration packages, she said. She said that it is fair to say that the board could task the CEO with other duties and responsibilities in terms of the clause 5 (b) of his contract.

[59] HR manual is for human resource matters for the officers of the fund. Executive officers are under the positions governed by the HSC. Their remuneration matters should be in accordance with the HSC guidelines.

[60] FNPF board sets a report for annual salary market study to HSC and that's when at each financial year board knows all their benefits and allowance paid to top 5 executives. The board secretary will prepare that and send to the chairman of the board and then to HSC for approval, she agreed.

[61] In re-examination she said that she believes that there is no higher responsibility than the CEO is required in addition to his responsibilities as CEO and that is the reason that no responsibility allowance is mentioned in the CEO's contract.

Clauses of DGM's contract are finalized by the board after approval of HSC. These are confirmed benefits and allowances mentioned in the contract and any addition to this would need another approval from HSC, she said. Explaining about the financial reports presented by the CEO to the board she said that she was not shown any document on the contents of the financial reports presented to board.

[62] The next witness was Aisake Taito who is the current CEO of FNPF. His responsibilities as CEO are to oversee the effective and efficient administration of the fund as mentioned in the act, provide strategic leadership and directions in the implementation of the strategic plan in the fund and ensure that the board is provided with sound information and advice to fulfill their role as directors, he said. The salary of CEO is determined by the board with approval of HSC. Executives' salaries are also determined by the board with approval of HSC. He referred to FNPF Act.

[63] He was acting CEO from April 2007 and GM/CEO from April 2008. He said from mid 2007 there is an allowance called Responsibility allowance. Responsibility allowance was approved by the board only when acting allowance does not work. Which is similar to if a person is asked to act and the salary of the person is higher than the base salary that he or she is going to act. He explained the difference between acting allowance and responsibility allowance.

[64] On board minutes P10 dated 07/12/2007 established guidelines for responsibility allowance. The decision was for grade 3 and 4 employees. Executives fall in grade 5 and 6, he said. Executives are excluded and responsibility allowance approved by the board is for grades below.

[65] As for CEO when he oversees duties the 5 subordinate executives are included, he said. When a subordinate executive leaves he makes recommendations on someone to act or as he sees the entire fund, he can take responsibility. His responsibility as CEO does not change. As CEO as per his contract he is not entitle to a responsibility allowance.

[66] Referring to section 5 of the FNPF Act he said it was the same procedure until November 2011. For payments outside the contract for executives, the CEO has to seek approval of the board. Procedure was the same now and then. Any payment outside CEO's contract is also after approval of the board, he said. He said if the CEO is not following the procedure something to do with finances, the members will lose.

[67] In cross examination he said the policy on responsibility allowance was created in year 2007 because there was a need for one.

[68] The next witness was Melaia Cokanasiga Bai. She is an Investment Officer attached to the investment department FNPF. She has processed the payments to DGM Foana Nemani in 2005. She identified and produced the memo dated 19/07/2005 (P12).

[69] The CEO, the accused Olota Rokovunisei has approved $20,000 per annum to Foana Nemani as responsibility allowance. Payment voucher, the cheque and the calculation sheet were produced. Responsibility allowance paid for the period 15/02/2005 – 22/07/2005 is $5991.18.

[70] Email dated 05/09/2006 from accused to Foana Nemani claiming the responsibility allowance to accused was produced as P16. Foana Nemani has approved the payment. Payment voucher and the calculation sheet and the cheque were produced. The amount paid to the accused as responsibility allowance for the period December 2005 to August 2006 was $22,773.18.

[71] In cross examination she said, referring to P12 memo dated 19/07/2005, in the hand written note that the accused is telling DGM that he would give DGM a one-off payment because of her work done outside her area of contract. In the P16 email in the hand written minute Foana has signed as Acting CEO. She said that it is fair to say, when accused is out of the country DGM will act in the post.

[72] The witness said that she would not know whether while Foana is acting as CEO, that she would be given powers by chairman of the board to act as CEO. She said that she would not know as these happen at the executive level and that she is not an executive. She said she would process payments only when there is approval. Looking at P16 there is an approval from Acting CEO. She said that all payment vouchers in the month are talked about in a monthly financial report. She said that reports on payments made are sent to the finance department every month and whether it is sent to the board, she would not know.

[73] In re-examination she said that she would not know whether approval given at P16 was legally correct.

[74] The last witness for the prosecution was Mervin Low. He had joined the FNPF in July 1989 and resigned in March 2006. Around year 2005 he had been Acting General Manger properties and administration.

[75] Apart from that in 2005 he said that he was asked to assist the investment portfolio. This responsibility was given to him by the then CEO Mr. Olota Rokovunisei. He had been assisting in the areas of technical advice. He said that investment department is a separate department. However, he said properties are done under the investment area. Investment division in 2005 was headed by CIO Neale Wright. He agreed that CIO resigned on 01/01/2006 according to P4. He said during his period at FNPF from 1986 – 2006 March, he was not familiar with the term responsibility allowance. He was not paid any responsibility allowance for overseeing investment division.

[76] In cross examination he said that he could recall a restructure going on at FNPF in 2005 and 2006. He denied that one of the things happened during restructure was to absorb his division to investment division. He said that property division was always under Investment arm.

[77] He agreed that customer/member services were taken away from him and given to Foana Nemani. Referring to P20, he answered that it was a fair interpretation to say that the accused as CEO/GM is telling Foana by P20; of taking new responsibilities and that he would consider her a responsibility allowance.

[78] That was the evidence for the prosecution.

[79] Madam Assessors and gentleman assessor,

At the end of the prosecution case you heard me explain several options to the accused. He has these options because he does not have to prove anything. The burden to prove his guilt beyond reasonable doubt remains on the prosecution at all times. The accused chose to give sworn evidence and to subject himself to cross examination. Further he called witnesses to give evidence on his behalf. Therefore you must give their evidence careful consideration.

[80] The accused said in evidence that he joined FNPF on 01/08/1976 as an Assistance Engineer. After serving on various positions he was appointed CEO on 01/06/2001. His contract was terminated on 19/04/2007. During his 31 years service in FNPF he had been an executive for 20 years. He testified about his qualifications.

[81] In years 2005 – 2006 the value of the FNPF had been F$3.24 billion.

[82] Referring to D4 board minute dated 22/02/2005, he said the board approved the delegations to the CEO outlined on board paper 1871 which is Defence exhibit D4 (a).

[83] Referring to D4 and D4 (a) he said that the board would direct the CEO to achieve certain results which are included in the strategic plan. As long as CEO uses any reasonable interpretation of the board's policies CEO is authorized to make decisions and take actions necessary to achieve the goals and objectives. So long as any particular delegation is in place the board members will respect and support the CEO's choice.

[84] Last approval of the HSC for his remuneration package was in year 2003 by D5. Base salary approved had been $135,778.00. According to his contract P3 his base salary is $150,000.00. However, his basic salary remained at $135,778 as CEO throughout, because HSC approved only $135,778.00.

[85] The board deals directly with the HSC on allowances of executives, he said. At the board meeting held on 24.02.2004 ( D (6)) board had agreed to write to HSC to submit solid arguments that support the FNPF board decision in approving the contract. Regarding the issue Chairman had been negotiating with the board.

[86] Referring to D8 and D8 (A) the salary comparison of the 3 senior officers CEO, DGM/ COO and CIO was shown. He said that the board appealed the HSC decision to fix the salary of CEO to $135,778.

[87] Functions of the HSC are mentioned in the HSC Act section 11. He said his understanding of section 11 (2) and (3) was that HSC should look into his base salary.

[88] There was a restructure going on in FNPF in 2005. He said according to D2 board minute the reason for the restructure was the slow decision making process which was not accommodative in achieving the objectives of the fund.

[89] The management has to implement the new structure by 01/07/2005. When it says management it is CEO and the team. Restructure changes the responsibilities of some of the executives and created some new positions. One of them was AGM/ GM Corporate Services, he said. Under the HSC Act role of the HSC is to consider submissions from organizations. He said according to his understanding, allowances for acting or responsibility allowance cannot be determined before contract is signed. HSC can only know at the end of the financial year when the organizations under the HSC Act submit their reports to HSC.

[90] He said that the board appointed him to oversee the investment division until the appointment of new CIO is made.

[91] He said he claimed the responsibility allowance because it was the corporate practice of FNPF to claim for responsibility allowance when you take additional responsibilities and also because it took long to fill the CIO position which he did not know at the beginning. He produced D9, D10, memo's and the D11 email to show that he approved responsibility allowance to Paren Bir, Leone Nayacalevu, and Vani Buliruarua.

[92] He said that his responsibility allowance was approved by acting CEO and that he doesn't know whether the board knew about it or not. He said that he asked for 20% of the base salary because he was thinking of responsibilities on overseeing the investment division as an additional responsibility. About approving 50000.00 per annum he said, that it is 20% of the base salary of new CEO, $ 250000. He said in P16 when he asked that 20% of his salary, he meant Thomas Cottom's salary. He was approved a responsibility allowance of $33333. and he said that it would be there in the financial report which is submitted to the board monthly. Financial report includes all incomes and payments for the month. Finance department prepares it from all receipts and vouchers like P17.

[93] He asked for approval for his allowance from Foana as she was the acting CEO appointed by D12.

[94] He said the acting GM/CEO had the power of the board under the board's policy of delegation of powers.

[95] On his approving Foana's allowance, he said that under Foana's contract she was responsible for finance and other functions. In the restructure that was approved in 2005 a new division was created under corporate services which included finance, ICT and administration. In the new structure member/customer services came under a new division called operations. She was appointed DGM and Chief Operating Officer. There was no one looking after member/customer services and branch officers and she was assigned that additional responsibility. For that she was given the responsibility allowance, he said. The board would know about this allowance from the monthly financial reports. The HSC would be informed of this when the reports are submitted to HSC for review. HSC will be informed when FNPF board makes submission to HSC, he said. The Chairman of the board is the person who should inform the HSC, he said.

[96] Referring to HR manual part 2.1 he said that when the employment contract is silent, HR manual will apply. He also referred to section 4.1.3 and said, for him and Foana it can be used to approve the responsibility allowance.

[97] In cross examination answering the questions posed by the FICAC counsel, he agreed that FNPF is listed as a prescribed office in HSC guidelines (P8). He also agreed that based on the HSC guidelines P8, salary of CEO as well as DGM is also determined by the HSC. He also agreed that in terms of the HSC Act (P9) section 11 (i), CEO's salary is determined by the HSC. He also agreed that when the salary is so fixed no amount in excess should be paid to the person. He also agreed that in terms of section 2 of the Act salary includes any benefit, facility or advantage whether money or otherwise received by any person as part of his terms and conditions of his employment.

[98] He agreed that all other departments were coming under him as CEO.
When it was put to him that his overseeing any department will not make any difference to performing his duty, he did not agree. He said he relies on the board minute dated 02/12/2005 (P4) on the decision of the board for CEO to oversee the investment division until an appointment is made. However he agreed that as CEO, he recommended to the board that the CEO oversee the division.

[99] He said that CEO/GM is accountable for the whole organization but he is responsible for his duties as CEO. He said that the term oversee might not be the right term to be used because someone has to do the job; duties and responsibilities. However he agreed that he is the one who used the word "oversee".

[100] He said that his contract was not changed due to the restructure. When it was put to him that he had the knowledge as CEO/GM, that responsibility allowance was not in Foana's contract, yet he approved, he said that he used his powers delegated to him by the board, and past practices. He further said that the approval of the board is through the delegated powers to CEO.

[101] He said final approval of the salary is normally given by a letter by HSC.

[102] Referring to the HR manual he agreed that HR manual applies only to
staff of grades 1 – 4.

[103] Therefore he agreed that grades 6 and 5 in which he and Foana were, are not mentioned in HR manual. Referring to para 2.1 of the HR policy, he said that his understanding was, in individual contract when the contract is silent the HR policy will apply. However he agreed that the para 2.1 clearly mentions that executives are excluded unless specified in the contract.

[104] Referring to D9, D10 and D11 he agreed that those employees are not executives. He also agreed based on P10 the responsibility allowance mentioned in 2007 was only approved for grades 3 – 4. According to P10 grades 5 and 6 are not included.

[105] The email P16 appears that he was in office when it was sent and he signed it as CEO. In P16 when he said "as I did with your case for overseeing finance" he said that it was only a reminder and was not for any other purpose.

[106] He said that he did not produce any financial reports mentioned by him which included the responsibility allowance, as he was not aware that it was necessary. About not submitting any financial report sent to HSC also he said that he did not know it was necessary.

[107] He denied that he acted prejudicial to FNPF.

[108] The next witness for the defence was Jackson Christopher Yee. He had been the Human Resources Manager FNPF for 12 years and left in year 2002. He said responsibilities allowance is paid for additional duties from his own and acting allowance is paid to subordinate officer to act in a higher office for a period. He testified about how responsibility allowance was calculated.

[109] He had done a research on responsibility allowance. He said that they were keen on paying the responsibility allowance to officers who deserve. It was rarely done, he said. He said when calculating responsibility allowance to the same level officers they would award 1, 2 or even 3 increments.

[110] In cross examination he agreed that he was not there at FNPF when HR policy was finalized. He agreed that executive salaries are determined by HSC for FNPF. He said that he doesn't have the knowledge of this responsibility allowance paid to CEO in 2006. He is not in a position to explain what happened in 2005 - 2006. He said that it is for the board to decide whether executives should be entitled to get a responsibility allowance.

[111] The last witness for Defence was Rosy Naroon Rahman. She is the Human Resource consultant for KPMG.

[112] FNPF had been one of their clients. She explained the procedure took place when in 2005 FNPF engaged KMPG to recruit CIO. She explained how the applications were called, short listed, and interviewed and the time taken for the whole process.

[113] That was the evidence for defence.

[114] Madam Assessors and Gentleman assessor,

You heard the evidence of many witnesses. If I did not mention a particular witness or a particular piece of evidence that does not mean it's unimportant. You should consider and evaluate all the evidence in coming to your decision.

[115] On Count No. 1, it is not in dispute that the accused was employed in public service as General Manager and Chief Executive Officer of the FNPF. It is also not disputed that he accepted the payment of $22,773.18 from the FNPF as responsibility allowance.

[116] What is in dispute is whether the acceptance of that allowance was beyond his proper pay and emoluments and whether he accepted it for the performance of his duty as CEO/GM of FNPF.

[117] It is not in dispute that responsibility allowance is not mentioned in the contract (P3) of the accused. It is not in dispute that the executives' salaries are determined finally by the HSC. Prosecution says that the responsibility allowance which was paid to the accused was not approved by the board or HSC. However the accused says that the board is informed by monthly financial reports and that the HSC is informed by the annual financial reports. You heard all the evidence including the documents which includes HR policy manual and the HSC guidelines. None of these financial reports which included the payment of allowance are in evidence. However you decide whether submitting details of receipts and payment by financial reports can be considered as approval by the board or HSC.

[118] Accused says that the HR policy manual applies to him in terms of section 2.1 of the policy, as his contract is silent. However prosecution says that in terms of the same section 2.1 HR manual applies only to permanent staff from grades 1 – 4 and executive are excluded.

[119] Accused says that he claimed for the allowance as it was the corporate practice and as he was overseeing the work of CIO when the post was vacant. Prosecution says that in any way it was his duty to oversee as CEO and therefore the accused is not entitle to the allowance
[120] Defence says that the accused acted under delegated powers by the board by board paper 1871 in D4 and D4a.

[121] You decide whether such power to approve allowances to executives was delegated to him by the board, and therefore whether it was not necessary to get approval from the board and HSC. When the accused made the claim whether it was a mistake of fact, and whether the accused acted under honest and reasonable, but mistaken belief that he was entitle to the claim is a matter for you to decide as I explained to you before. You have to consider whether a reasonable man in accused's position and experience as CEO would honestly believe as the accused said he did in the circumstances. You have to consider all the evidence led in Court when coming to your decision.

[122] On counts of abuse of office, the alternative count and the count No. 2 the same evidence will apply and you have to consider all the evidence.

[123] In the alternative count you decide whether the accused acted in abuse of authority when he made the claim and accepted the money. Whether he used his position as CEO for an illegitimate agenda and not followed the procedure. Whether he acted in bad faith. You decide whether he did an arbitrary act as I explained to you before. You decide whether this act was prejudicial to the FNPF.

[124] On Count No. 2 same evidence applies. When he approved the allowance to Foana Nemani, you decide whether he did an arbitrary act and he acted in abuse of his authority as CEO. Accused says that due to the restructure additional responsibilities were given to Foana Nemani. He says that he had the authority delegated to him by the board. The prosecution says that even the board could not have paid the allowance to an executive without the approval of the HSC. You heard the evidence on all witnesses on the procedures that should be followed when paying allowances to executives. It is a matter for you to decide whether he had the authority and if he so believed whether it was an honest and reasonable but mistaken belief. When deciding on that, the same test which I explained to you applies.

[125] You must use your commonsense when deciding on the facts.

[126] Prosecution has to prove all the elements in each offence beyond reasonable doubt to find the accused guilty. If you find that the prosecution has proved all the elements of the offences as I mentioned before beyond reasonable doubt, you may find the accused guilty. If you have any reasonable doubt on any of the elements you must find him not guilty. You must consider evidence on each count separately.

[127] As I said before you have to consider the alternative count, only if you find the accused not guilty on count No. 1. If you find him guilty on count No. 1 you need not consider the alternative count.

[128] Your opinion on each count will be either guilty or not guilty.

[129] Madam Assessors and Gentleman assessor,

This concludes my summing up of the Law. Now you may retire and deliberate together and may form your individual opinions on the charges against the accused. You may peruse any of the exhibits you like to consider. When you have reached your separate opinions you will come back to court and you will be asked to state your separate opinion.

Priyantha Fernando
Judge

25.04.2012