The General Manager of the Vanuatu National Provident Fund (VNPF), Santos Vatoko, says that the Fund Management regularly provides updates to the Government on the performances of the provident fund. He says last month Management gave the Fund’s latest update to the Prime Minister, Joe Natuman, and the Council of Ministers including providing explanation for the zero rate of return for members in the 2013 financial year.
Additionally, the General Manager says that anyone can go to the VNPF office and get the information if they have a question.
“Following recent news on the Fund in the local media, people have called and visited and got answers to their questions. The 2014 Financial Report will be issued soon to provide further explain.”
Vatoko says they are continuing with the awareness to explain the plans and decisions of the Fund to members and he admits that those people who have missed this awareness session when it came to their office will obviously not know about what the Fund is doing.
The General Manager says the Fund has nothing to hide and “there was no intention to mislead anyone.”
GM Vatoko’s comments about regular updates for the Prime Minister and the Council of Ministers, was confirmed by the Chairman of the VNPF Board, Simil Johnson.
Chairman Johnson said following the Commission of Inquiry carried out by Ernst and Young that looked at discrepancies in past operations, VNPF has in place a new strategy, which includes legislative strengthening and cooperation with other stakeholders such as the Reserve Bank of Vanuatu to improve the operation and management of the Fund.
“We must all work in a positive way to help the Fund move forward for the benefit of members and to protect the Fund instead of always finding faults,” Johnson made his appeal.
“Due process is being done in regards to investment decisions in line with the requirements of the Reserve Bank of Vanuatu and regular meetings are held by the Fund management with the Prime Minister and the Council of Ministers to provide normal reporting on the operations of the Fund,” he added.
The Comments from the General Manager and the Chairman follow a stinging attack from a former senior officer of the Fund for the management’s reasons for not paying a dividend to members in FY2013. The claims in last weekend’s issue of the Daily Post alleged that the real reason for not paying out the dividend should be poor investment decisions and non-performing assets.
But General Manager Vatoko says that after the 2012 write-off of certain non-performing assets –among them the National Bank of Vanuatu building and the VNPF building in Luganville, Santo, there are no longer any non-performing assets.
The VNPF GM points out that many of the figures disclosed by the former senior staff in the article were not correct and that they have put in strategies and are turning around non-performing assets among them Bouffa in Efate and Milai in Santo.
“Some assets mentioned by the former senior officer are already performing such as Nambatu Mama’s market and Club Vanuatu for which the tender will be out next month.”
The submarine cable investment with Inter-Change is another figure that is incorrect, according to the General Manager. He says the actual investment with Inter Change is just over Vt800-million and not Vt1.8-billion as quoted by the former senior staff and he is pleased with the performance of the company so far.
“It is making a lot of difference. For us it came with its risks initially, but once it is up and running, the impact for the investment and the country will be big financially and socially.”
“Now we just need to do the right thing, build up our reserve and pay a small dividend this year and next year get back to normal rate of return for members,” he added.
In an article in last Tuesday’s issue of the Daily Post, the VNPF provided answers to much of the questions raised in last weekend’s article that in many ways questioned the performances of the Management and the Board.
Interestingly, the article attracted additional questions and queries. One from Acting Director of the Department of Finance, Letlet August that questioned VNPF’s rates used for Gross Domestic Product (GDP) in their chart. The second by the First Political Advisor in the Prime Minister, George Iapson, who it appeared was not convinced by the answers given in the articleand asked if “VNPF Management is trying to pull a blanket over our eyes,”?
VNPF’s Director, Investments, Paul Kaun who headed that team that did the technical analysis for the article explained that what they were trying to do in the article and the information on the chart was explain the relationship between economic growth and investments. He said that in many ways these two things are linked.
“The state of the economic condition also determines the investment opportunities that can arise. For example, if the economic growth is low, businesses will experience low activities. These things in aggregate determine the economic growth that is measured in the Gross Domestic Product (GDP). We tried to draw distinction with growth especially in the Real sector, such as the property market,” he added.
One thing that was obvious in the report was the write off of properties undertaken by VNPF in 2012 after the valuation undertaken by VNPF, he said.
“This week we tried to explain the relationship between global financial crisis on VNPF investments. We explain two ways – directly on VNPF investments overseas in US Dollars in US Securities, when the rate of the US dollar depreciates affecting investments recorded in Vatu, which is realized in the General Reserve Fund and indirectly, as Vanuatu is an open market it is affected by global financial performances like any other country in the world.
On the Acting Director of Finance’s specific comments, Kaun said they were trying to show the relationship in the Gross Domestic Product and in so doing made an oversight on their part by using GDP per capita instead of the real GDP growth. But that this does not make much difference because their trends are both the same, he insisted.
The Minister of Finance who directly responsible for VNPF, Maki Simelum, was supportive of the Fund. In an email message he called on all government stakeholders including the Prime Minister’s Office and the Ministry of Finance “to come together and speak the same tone to avoid misunderstanding and misinterpretations.”