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 - July 23, 1999 - Emalus Campus
Vanuatu Livestock Development Ltd is a Government owned farm which breeds, raises and sells beef. It has existed as a state enterprise since before independence. An investigation into the affairs of Vanuatu Livestock Ltd (VLD) was launched after a complaint was made by a Minister regarding its management by Selwyn Leodoro, who was manager between June 1992 and November 1993. The allegations also included the former Chariman of the Board of VLD, Tom Kalorib and the late Minister of Agriculture, Onneyn Tahi.
The investigation revealed that Mr. Leodoro was not appointed on the basis of merit but for political reasons. He was the brother in law of the then Agriculture Minister, Onneyn Tahi. He had no previous commercial experience and had previously been convicted of misappropriation of public funds.
At the time of his appointment as General Manager, VLD was in a sound financial position. During the 19 months of Mr. Leodoro’s management, the company suffered to the point of near financial collapse. The total number of cattle diminished from 1538 head to 524 head. During Mr. Leodoro’s management, 34 million vatu was spent in dubious ways or not accounted for.
During his management, Mr. Tahi and the Chairman of the VLD issued instructions to make Mr. Leodoro the sole signatory for withdrawals of 200,000 vatu or less from the company’s account. This was done without the authority or knowledge of the Board of VLD. Following this, Mr. Leodoro misappropriated 79,402 vatu of VLD money by using funds to purchase personal goods.
During his management, Mr. Leodoro exchanged 70 heifers and a horse belonging to VLD for 70 pigs, an improvident exchange. Further, the 70 pigs were distributed amongst the Minister, Mr. Leodoro, Mr. Kalorib and some members of staff. Nothing was received in payment for the pigs.
During his management, Mr. Leodoro authorized the renovation of several staff houses. This expenditure was made without tenders and without benefit of comparative quotes and, on the basis of a Government audit it was found that VLD was overcharged by 2,912.155 vatu.
No financial records were kept and on his suspension, Mr. Leondaro burnt what accounting records existed.
During his term as manager, Mr. Leodoro, drove a VLD vehicle while intoxicated, and caused considerable damage to the vehicle in an accident. He was later convicted for impaired driving in relation to this incident.
In addition to finding that there was misappropriation, the Ombudsman concluded that Mr. Leodoro was incompetent, that his actions were blatantly unreasonable and that he breached the terms of his employment contract. The fact that there were no stock counts, no Board reports, no financial records of cash withdrawals all contributed to a lack of accountability in the operation of the company.
The Ombudsman concluded that the Board of VLD acted improperly in dismissing the former manager of VLD and replacing him with Mr. Leodoro. The Ombudsman made no findings against the former Minister of Agriculture, Mr. Tahi as he was deceased at the time of the investigation.
· That the Board of VLD consider legal action to recover moneys appropriated by Mr. Leodoro, the cost of damage to the VLD car caused by Mr. Leodoro, and the loss arising from the exchange of heifers for pigs and the dispersal of the pigs without compensation.
· That Mr. Leodoro not be appointed to any position in the public sector.
· That the Board of Directors of VLD take immediate and severe disciplinary action against Mr. Leodoro who acted unreasonably and without consultation with the Board.
· That Mr. Kalorib not be appointed in any public position or as a member of any board of a company that the Government has an interest in.
· That the police and Public Prosecutor consider prosecuting Mr. Leodoro for misappropriation of public funds and for destroying public property.
· That present and prospective board members of public bodies be given training to understand their duties.
Written by Edward R. Hill
UNDP Governance and Accountability Project
© Ombudsman of Vanuatu
Published here by University of the South Pacific, School of Law Web Site - www.vanuatu.usp.ac.fj