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Mismanagement of Vanuatu Livestock Development Ltd by the Formet Manager Selwyn Leodoro in 1992-1993 [1999] VUOM 11; 1999.11 (23 July 1999)

REPUBLIC OF VANUATU

OFFICE OF THE OMBUDSMAN

PUBLIC REPORT

ON THE

MISMANAGEMENT OF THE VANUATU LIVESTOCK DEVELOPMENT LTD BY THE FORMER MANAGER, SELWYN LEODORO IN 1992 – 1993 AND ILLEGAL CONDUCT OF THE FORMER CHAIRMAN OF THE BOARD,
TOM KALORIB

23.07.99

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PUBLIC REPORT ON THE MISMANAGEMENT OF THE VANUATU LIVESTOCK DEVELOPMENT LTD BY THE MANAGER, SELWYN LEODORO

IN 1992 – 1993 AND ILLEGAL CONDUCT OF THE

FORMER CHAIRMAN OF THE BOARD, TOM KALORIB

'He that is faithful which is least is faithful also in much: and he that in unjust in the least is unjust also in much. If ye have not been faithful in that which is another man’s, who shall give you that which is your own...'

Luke 16 v 10 and 12

The farming enterprise known as Vanuatu Livestock Development Ltd was a fine establishment capable of the production of hundreds of saleable stock. However, our investigation has shown a series of unwise decisions, appointment of incompetent or indifferent people to positions of authority, and an overall failure to follow rules of good stewardship.

The result was that dishonesty was not exposed or dealt with appropriately, so that yet another of the assets of the people of Vanuatu was sacrificed.

SUMMARY

Vanuatu Livestock Development (VLD), a Government owned company, was considered before and after independence to be a model farm. It was intended to breed improved stock of heifers and bulls to be supplied to farmers to improve their herd. The experiment produced quality cattle. This reflected years of careful planning and methodological work.

Our investigation shows that in the 19 months of Mr Leodoro’s management, this asset of the people of Vanuatu and all the work done previously was basically sacrificed following a series of unwise decisions, appointment of incompetent or indifferent people to positions of authority and an overall failure to follow rules of good stewardship.

The Ombudsman commenced an enquiry following a complaint from a Minister alleging defective administrative practices by the former Manager of the Vanuatu Livestock Development Limited (VLD), Selwyn Leodoro. The allegations also included the former Chairman of the Board of Directors for VLD, Mr Tom Kalorib and the former Minister of Agriculture and Livestock, the late Onneyn Tahi.

The main findings were that:

1. The appointment of the General Manager Mr Selwyn Leodoro was not based on merit, but on political and family grounds. He was the brother in law of the Minister in charge (late O. Tahi). He had no qualifications at all in any agricultural or farming matters. Mr Leodoro, prior to his appointment as Manager of VLD (May 1992 – November 1993) was previously convicted of misappropriation of public funds while working at the President of the Republic’s Office. The Court convicted him on 9 July 1990, and was ordered to pay compensation costs to the government plus court fees.
   
2. The stock of cattle was totally depleted (given or sold away cheaply) with little benefit to the company.
   

From 1538 heads in 1992, the stock fell to 524 heads in 1993. The expected stock was 1632 heads.

He got rid of 1214 heads in 19 months a record considering that he was advised to sell 600 heads

By the time Mr Leodoro was suspended, there was virtually no money in the bank, very few cattle left and the farm and its assets were in a dilapidated condition.

3. Under the management of Mr Leodoro, in 19 months a total of VT34 millions Vatu was not accounted for or was spent in dubious ways.
   

∑ When Mr Leodoro was appointed there was Vt 12,255.882 Vatu in the Bank after careful management of the former manager, the Australian citizen Me Edwin Black. Mr Leodoro used 11 million of that money, mainly in cash from the bank during his terms leaving only Vt1.259,418 left.

∑ VLD lost stock valued at VT 23,000,000.

∑ Mr Leodoro was not able to give reasonable explanations to the Board or to the Ombudsman as no financial records were kept, and as cash was used. Mr Leodoro admitted burning the accounting records when he was suspended.

∑ Mr Leodoro caused serious damage to the VLD’s truck under the influence of alcohol (was convicted for being drunk and driving). He was never asked to pay for the damage.

∑ He lost Vt 1,260,000 Vatu in an unfair exchange of heifers against pigs which were later shipped to the Minister’s plantation, the late O Tahi, without payment and some were distributed to the staff.

∑ He entered an overvalued contract of Vt 8,300,0000 to repair the staff houses. The contract was not tendered. And VLD overpaid apparently VT2,900,000 according to a later study made by an adviser.

∑ He continued using the supermarket account of the Company for food even after he had been suspended.

∑ Mr Leodoro’s actions were in breach of his contract, illegal, blatantly unreasonable and are the main cause of the damage caused to that model farm

The other findings are:

4. The members of the board were blatantly unreasonable in appointing him and in dismissing the former qualified Manager.
   
5. The Chairman Tom Kalorib’s actions were illegal, unjust and blatantly, unreasonable and are the main contributing factor of the destruction of this government farm. He falsified Company Minutes to give sole signature of the Bank account to Mr Leodoro. VLD never had any AGM meetings breaching section 132 (1) of the Company’s Act. He recommanded the contractor for the repair of the houses. He assisted Mr Leodoro in not respecting his contract condition by having very few board meetings.
   
6. Lack of accountability in the management of the Company VLD