Sydney businessmen the Elomar brothers were busy in 2014. Mamdouh Elomar was publicly decrying the actions of his son Mohamed, an Islamic State fighter in Syria who would go on to be photographed holding severed heads.
Mamdouh was also vying for Iraqi construction contracts with his brother Ibrahim, arranging a $US1 million bribe for which they would both be jailed last year.
But the pair struck another deal that year, paying $6 million for a logging company only to end up negotiating a $9 million payment from the previous owners after a dispute.
The case, now before the courts, involves the forests of Papua New Guinea and a development fund meant to help lift locals out of poverty.
And it hinges on claims that another businessman stole more than $10 million in assets belonging to the Papua New Guinean people.
Mamdouh, 64, and Ibrahim, 61, were raised in Lebanon in a family of 12 children and worked manual jobs in Australia before building a large construction company, Lifese.
The firm counted a former Supreme Court judge as its chairman and completed projects worth hundreds of millions of dollars.
In time, though, the Elomar brothers became better known for the extremist activities of their relatives.
Mamdouh’s brother Mohamed Ali Elomar is serving 21 years’ jail for his role in planning attempted terrorist attacks in Melbourne and Sydney in 2005.
Mamdouh’s son Ahmed was jailed for four years for assaulting a policeman at the 2012 riots in Sydney’s Hyde Park, after carrying a sign that said “our dead are in paradise, your dead are in hell”.
Then his son Mohamed, formerly a promising boxer, travelled to Syria to become one of Australia’s most infamous IS fighters, before he was killed in an airstrike in 2015.
Terrorism headlines were hurting the Lifese business in 2014, shrinking revenue.
But the Elomars found money in February that year to buy a timber operation called Cloudy Bay from the PNG Sustainable Development Limited (PNGSDL), a charitable trust part-run by Australians.
Managing $US1.3 billion in assets, PNGSDL funds local development projects with proceeds from the Ok Tedi mine that was once owned by BHP, which handed over its stake in return for immunity from environmental lawsuits.
“We commit ourselves to improving the quality of life of the people of Western Province,” the program says on its website.
The Elomars were joined by another Australian, 25 per cent shareholder Nick Roniotis, in buying the Cloudy Bay timber operation – including logging permits, production plants and a commercial building in Port Moresby – for 40 million kina, about $17 million at the time.
They paid $6.5 million up front, but then defaulted on the rest.
As they faced charges over the bribery in Iraq, the Elomars were negotiating hard over the PNG business to strike a new and unusual deal.
It would have allowed them to keep control of the company while receiving millions of dollars more than they ended up paying for it.
The deal, signed last February, was meant to put an end to a murky dispute.
PNG SDP could have taken back all of the timber operations’ assets, but it decided to forgive the $11 million debt in return for the Port Moresby property alone.
On top of this, PNGSDL said it would pay the Elomars’ company $9 million.
Once the property was transferred back to the development program and the money paid, both sides would relinquish any right to sue over the initial sale.
The deal was fair, according to PNGSDL’s Australian chief executive John Wylie, because it compensated the Elomars for a massive theft on the timber operation.
A former public servant and management consultant, Mr Wylie said the theft was committed by someone working within the development fund before the sale to the Elomars and was only discovered later.
“Physical assets” were allegedly stolen and funds siphoned off to pay for personal expenses, including school fees in Australia.
“The validated quantum of the theft was much more than $9 million,” he said.
The alleged thief, who cannot be named for legal reasons, has been reported to an anti-corruption body in Singapore, where the company was incorporated, Mr Wylie said.
“The PNG authorities are in the process of being informed,” he said. “This is being done carefully through lawyers and has yet to be fully executed.”
Deeds sighted by The Sun-Herald refer not to a theft but “disputes” between the buyer and seller.
Asked why the $9 million payment was to go to the Elomars personally, not the Cloudy Bay Company, Mr Wylie said Cloudy Bay had given a written executed authority for it.
“How they divvied up the spoils, as it were – we didn’t want to get involved in that. None of our business.”
The deal has yet to go through. The Elomars’ former business partner, Mr Roniotis, claimed he was cut out of the $9 million payment. He launched action in PNG’s National Court of Justice to have the sum paid to the timber company, not the Elomars’ venture.
Mr Roniotis also questioned the idea of compensation for a theft, saying he and the Elomars conducted due diligence on the company before buying it and found nothing untoward.
His lawyer, Stewart Levitt, has questioned the negotiations between PNGSDSL and the Elomars, who at the time had been facing foreign bribery charges for more than a year.
“It would be extraordinary for the trustees of a public trust to want to continue to do business with people known to be facing serious criminal charges which had been widely reported,” Mr Levitt said.
The Elomars, who pleaded guilty to the Iraq bribery last July, will be first eligible for release in September next year. Their lawyer at the time of the PNG deal negotiations, Abdul Reslan, did not return calls.
The establishment of PNGSDL and environmental damage from the Ok Tedi mine is now under investigation after PNG Prime Minister Peter O’Neill announced a public inquiry in parliament in early 2018.
Again in February 2019 Parliament setting, during Question Time, Central Province Governor Robert Agarobe raises concerns about the proprietor of Cloudy Bay Timber. According to the Governor, the people around the Cloudy Bay area used to be a small thriving economy, due to opportunities being created by the local timber company.
Mr. Angarobe wanted to know how the provincial administration and the local customary landowners could be in partnership with the proprietors in terms of equity why were they not notified when the facility had been closed down.
Forestry Minister Douglas Tomuriesa says the ownership issue has been around for a longtime. The Minister said PNG sustainable Development Limited sold the timber operations to a Middle East group of companies but because of security reasons and issues the Arab group had stopped operating.
“They haven’t operated in that time in more than 10 years. There have been some court battles which have now been cleared. The Department of Forestry had now taken over the operations while working through the Office of the State Solicitor,” Mr. Tomuriesa explained.
Below is a photo collection and a trip story by Central Governor Hon. Robert Agarobe making a visit to the cloudy bay timber areas in his province.
AGAROBE VISITS CLOUDY BAY, ABAU DISTRICT
Konedobu: On the morning of January 26th, 2019, Honourable Robert Agarobe, Governor for Central Province and a small team, set out for Cloudy Bay Local Level Government in the Abau District. The purpose of the trip was twofold in that not only was it taken to assess the condition of the roads and to see how the community were faring after the recent heavy rains and strong winds, but also to visit communities so the Honourable Governor could talk to them.
The trip saw Governor travel to Robinson River where he spent the night with locals and spoke to them of the work he intended to carry out in the forthcoming months and onwards. Following this, the team headed to Moroguina then Cloudy Bay where villages, farms and industry sites were visited with similar conversations of the work planned for the coming months being held.
Throughout the whole trip, at the various times he had the opportunity to speak to the community, Governor Agarobe told of his intentions to bring government services back into the districts and sub-districts, right into the communities. This he hopes to do so by establishing council chambers and making use of the government systems that are already in place, which he has spent the first sixteen months of his election as governor, on getting up and running. This has been to allow them to work effectively and efficiently to the advantage of service delivery.
Speaking to the people at the Cloudy Bay Local Level Government headquarters, Governor Agarobe spoke of his prior visits to the other districts and about his intention to eventually visit every local level government and also assured the people of the availability of funds to carry out projects. He, however, warned the people to do away with the mentality of free handouts as there was no such thing. A call was made for ward councillors to produce community development plans that aligned with the provincial government plans and priorities and under which projects would be initiated.
The Honourable Governor also made a point of highlighting the provincial government’s three priority areas which were (1) Agriculture, (2) Tourism, and (3) Sports which would be used to drive the province’s economy and he urged communities to ensure to align projects to these priority areas.
Governor Agarobe now intends to re-visit these communities in the coming months, along with other relevant divisions and stakeholders to make the communities aware of their rights and the work of ward recorders and to establish dialogue with them of how they can all partner in the development of and bringing services back to their respective communities.
The call now made by the Governor is for communities to start talking about their land, properly establishing ownership and getting them registered in anticipation of the economic activities and services that are being planned for.
Governor Agarobe has stated that the time for waiting for things to happen have since long gone, he now urges the people of Central Province to stand together and use their available resources to make things happen; to bring services back into the communities. -Via Garamut News.
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