Issue No: 514; 24 February 2001

Paperchase Ltd, a subsidiary of Kelton Investments Ltd, has had the court order it to freeze its assets. The order comes after Credit Corporation Ltd applied for an injunction against the company from removing any money from the company accounts.

Credit Corporation alleges that Paperchase fraudulently obtained $2.23m from the Credit Corporation to finance non-existing sales of business equipment including computers. Credit Corporation had agreed to finance the sales of the equipment. Paperchase listed numerous business houses and organizations as having ordered equipment from Paperchase and obtained credit for this. But no equipment was acquired or sold. It has also been revealed that the company advanced close to $1m to another of its sister companies.

PaperChase's lawyer, Jon Apted said that the media reports on the matter were made without getting the company's side of the story. But having made this statement, he did not give the company's side to the media. Today's Fiji Sun reports the company's Managing Director Michael Ah Koy as blaming the problems to the negligence and possible fraud by former employees of the company.

Earlier the Credit Corporation Ltd had attempted to seize a Air Fiji aeroplane. Air Fiji has a majority shareholding of the Ah Koy family company. The majority control of the air company, in which the government had substantial shares, was acquired by the Ah Koy company when Ah Koy was in the SVT government. More recently the Ah Koy family company has been trying to sell its share to the Government of Tuvalu.

Ah Koy made millions of dollars through his association with the SVT government. Many of these transactions were ordering on fraud and at the least were less than transparently done. This included profiting from insider trading - including profiting from the national budget and exchange rate policies before the polices were announced.

The People's Coalition Government had, as its promise to rid Fiji o corruption, begun to bring transparency into the operations of the government. As it began implementing its policies, it found layer after layer of questionable deals involving the Ah Koy company.