Government by Greed: The Fijian Holdings saga
Fijian Holdings Ltd. (FHL), the flagship of Fijian business enterprise, is a huge $300m conglomerate that belies periodic laments about lack of Fijian participation in business. Established in 1984 by the Great Council of Chiefs (GCC), FHL was supposed to be owned by provincial councils, the Native Land Trust Board (NLTB), the Fijian Affairs Board (FAB), and Tikina and village groupings.
It was felt that Fijians were missing out on participating in the high-returns commerce sector and that FHL would provide risk-free participation as it operated on the basis of privileged contracts and therefore, was free from competition. On its board were respected and business-savvy non-Fijians like Lyle Cupit who would ensure its health while rich dividends flowed to Fijian collective units.
Two important points need to be established here to understand how FHL was thwarted from its original objectives by the cabal that has featured in this series. One, FHL was an offspring of the GCC; therefore, any changes to FHL policy had to be endorsed by the GCC. And two, the GCC was too chief-dominated for non-chiefly interests to effect any changes to FHL shareholding policy.
The stranglehold of the chiefs therefore, had to be weakened within the GCC itself to speed up the change and allow ambitious non-chiefs to access the infinite riches FHL promised. Once again, the push to change the membership of the GCC can be traced back to 1990 when Rabuka was jockeying for power and Mara was forced to back onto his last bastion of support, the GCC.
Chiefs Weaken in GCC
Wholesale changes were made to the composition of the GCC in 1990 under the rhetoric of reestablishing chiefly power in national governance. Out of a total of 55 members, the GCC now comprised: 3 nominees from each of the 14 provinces and Rotuma, 6 nominees of the Minister of Fijian Affairs, the PM, President, VP and Sitiveni Rabuka (as the only life member).
Ambitious interests eyed avenues within this arrangement for maneuvering. The provincial representatives did not have to be chiefs, and it became common to have chiefs and influential commoners making the provincial trio. Then the 6 nominees of the Fijian Affairs Minister comprised a mixed composition.
On top of this, a good number of chiefs showed a weakness for “city life” during their visits to Suva for GCC meetings. And the power-players devised a potent concoction comprising the otela, kalavo kei na vua-ni-kau karakarawa – hotel, young lass and the blue pill (Viagra). That was the magic wand that swayed the vote in the GCC at crucial times.
It was this influence that led to a change in policy at FHL in 1991 when shareholding was relaxed to include “Fijian owned companies”. This led to a scramble to register individual and family-owned companies for $2 in order to bid for the El Dorado that FHL offered. And by June 1992, some 27 privately-owned companies held shares in FHL.
As would have been expected, there was a rush to secure finances from the National Bank of Fiji (NBF) and 'Equity Window schemes' of the Fiji Development Bank (FDB) in order to buy FHL shares. Key personnel ensconced in these banks played a pivotal role in this enterprise to kick-start Fijian business.
Thus blue-chip shares from easy cash disbursed by Fiji’s own banks under the rubric of “Fijian assistance” became an intoxicating pill that drove and taught the power-players that much more was there for the taking. So much was taken that the NBF died at $250m while the FDB hemorrhaged at $220m. A scrutiny of FHL’s shareholding at this stage is revealing.
Commoner Shares in Fijian Holdings Ltd.
In 1992, the Native Lands Trust Board (NLTB) and Fijian Affairs Board (FAB) held 30% shares in FHL while the power players held 70%. A number of shareholdings were revealed in a fiery 1993 Senate meeting by outspoken Kadavu Senator Manu Korovulavula.
In Kadavu, the provincially owned Kadavu Development Company owned $50,000 shares. KJY Investment Ltd., owned by cabinet minister Konisi Yabaki, held $100,000 shares. While Taoi Investment Ltd., owned by FTIB chief Jesoni Vitusagavulu and Ulaiasi Taoi (President, Indigenous Fijian Business Council), held $200,000 shares.
A closer scrutiny showed that Konisi Yabaki was Chairman of Kadavu Development Company and Jesoni Vitusagavulu Secretary of the same when they amassed prime FHL shares to themselves at the expense of their province.
In Lomaiviti, the province owned $55,100 shares while KB Investment Ltd. and 5X Investment Ltd. owned $100,000 each. Another company, Vensalisi Investment Ltd. owned $80,000 shares. Former Deputy GM/NBF, Kalivati Bakani owned KB Investment and had joint shareholding in 5X Ltd. Financing for these shares also almost-naturally came from NBF.
In Lau, the provincial council held $55,100 shares, Stiks Investment Ltd. held $150,000 shares, Q-Ten Investment Ltd. had $200,000 shares, and Kepa Investment Ltd. had $100,000 shares. Stiks Investment is owned by the Weleilakeba family of which Sitiveni Weleilakeba was the CEO of FHL. Q-Ten Investment was owned by the Qarase family of which former PM Qarase is head. And Kepa Investment is owned by the Lakepa family.
The Qarase Connection
Ousted PM Qarase was Chairman of FHL from 1992-95 when the scramble for FHL was at its frenetic best as a small number of well-connected individual shareholders outbid and outdid their own provinces in owning shares in FHL. Qarase not only facilitated this move that was against company policy, but actively encouraged it in a bid to have that policy, that he saw as a hindrance to individual ambitions, changed. He then conveniently became the GM of FDB from 1996 till he’d helped drain that bank of $220m.
In 2000, he was providentially handed the reins of national government and from thence he proceeded to execute his business acumen on the national tableau. Stay tuned for more on Qarase in the next issue.
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Subhash Appana is an academic and political commentator. The opinions contained in this article are entirely his and not necessarily shared by any organizations he may be associated with both in Fiji and abroad. Email subhasha@ais.ac.nz
Fijian Holdings Ltd. (FHL), the flagship of Fijian business enterprise, is a huge $300m conglomerate that belies periodic laments about lack of Fijian participation in business. Established in 1984 by the Great Council of Chiefs (GCC), FHL was supposed to be owned by provincial councils, the...
Fijian Holdings Ltd. (FHL), the flagship of Fijian business enterprise, is a huge $300m conglomerate that belies periodic laments about lack of Fijian participation in business. Established in 1984 by the Great Council of Chiefs (GCC), FHL was supposed to be owned by provincial councils, the Native Land Trust Board (NLTB), the Fijian Affairs Board (FAB), and Tikina and village groupings.
It was felt that Fijians were missing out on participating in the high-returns commerce sector and that FHL would provide risk-free participation as it operated on the basis of privileged contracts and therefore, was free from competition. On its board were respected and business-savvy non-Fijians like Lyle Cupit who would ensure its health while rich dividends flowed to Fijian collective units.
Two important points need to be established here to understand how FHL was thwarted from its original objectives by the cabal that has featured in this series. One, FHL was an offspring of the GCC; therefore, any changes to FHL policy had to be endorsed by the GCC. And two, the GCC was too chief-dominated for non-chiefly interests to effect any changes to FHL shareholding policy.
The stranglehold of the chiefs therefore, had to be weakened within the GCC itself to speed up the change and allow ambitious non-chiefs to access the infinite riches FHL promised. Once again, the push to change the membership of the GCC can be traced back to 1990 when Rabuka was jockeying for power and Mara was forced to back onto his last bastion of support, the GCC.
Chiefs Weaken in GCC
Wholesale changes were made to the composition of the GCC in 1990 under the rhetoric of reestablishing chiefly power in national governance. Out of a total of 55 members, the GCC now comprised: 3 nominees from each of the 14 provinces and Rotuma, 6 nominees of the Minister of Fijian Affairs, the PM, President, VP and Sitiveni Rabuka (as the only life member).
Ambitious interests eyed avenues within this arrangement for maneuvering. The provincial representatives did not have to be chiefs, and it became common to have chiefs and influential commoners making the provincial trio. Then the 6 nominees of the Fijian Affairs Minister comprised a mixed composition.
On top of this, a good number of chiefs showed a weakness for “city life” during their visits to Suva for GCC meetings. And the power-players devised a potent concoction comprising the otela, kalavo kei na vua-ni-kau karakarawa – hotel, young lass and the blue pill (Viagra). That was the magic wand that swayed the vote in the GCC at crucial times.
It was this influence that led to a change in policy at FHL in 1991 when shareholding was relaxed to include “Fijian owned companies”. This led to a scramble to register individual and family-owned companies for $2 in order to bid for the El Dorado that FHL offered. And by June 1992, some 27 privately-owned companies held shares in FHL.
As would have been expected, there was a rush to secure finances from the National Bank of Fiji (NBF) and 'Equity Window schemes' of the Fiji Development Bank (FDB) in order to buy FHL shares. Key personnel ensconced in these banks played a pivotal role in this enterprise to kick-start Fijian business.
Thus blue-chip shares from easy cash disbursed by Fiji’s own banks under the rubric of “Fijian assistance” became an intoxicating pill that drove and taught the power-players that much more was there for the taking. So much was taken that the NBF died at $250m while the FDB hemorrhaged at $220m. A scrutiny of FHL’s shareholding at this stage is revealing.
Commoner Shares in Fijian Holdings Ltd.
In 1992, the Native Lands Trust Board (NLTB) and Fijian Affairs Board (FAB) held 30% shares in FHL while the power players held 70%. A number of shareholdings were revealed in a fiery 1993 Senate meeting by outspoken Kadavu Senator Manu Korovulavula.
In Kadavu, the provincially owned Kadavu Development Company owned $50,000 shares. KJY Investment Ltd., owned by cabinet minister Konisi Yabaki, held $100,000 shares. While Taoi Investment Ltd., owned by FTIB chief Jesoni Vitusagavulu and Ulaiasi Taoi (President, Indigenous Fijian Business Council), held $200,000 shares.
A closer scrutiny showed that Konisi Yabaki was Chairman of Kadavu Development Company and Jesoni Vitusagavulu Secretary of the same when they amassed prime FHL shares to themselves at the expense of their province.
In Lomaiviti, the province owned $55,100 shares while KB Investment Ltd. and 5X Investment Ltd. owned $100,000 each. Another company, Vensalisi Investment Ltd. owned $80,000 shares. Former Deputy GM/NBF, Kalivati Bakani owned KB Investment and had joint shareholding in 5X Ltd. Financing for these shares also almost-naturally came from NBF.
In Lau, the provincial council held $55,100 shares, Stiks Investment Ltd. held $150,000 shares, Q-Ten Investment Ltd. had $200,000 shares, and Kepa Investment Ltd. had $100,000 shares. Stiks Investment is owned by the Weleilakeba family of which Sitiveni Weleilakeba was the CEO of FHL. Q-Ten Investment was owned by the Qarase family of which former PM Qarase is head. And Kepa Investment is owned by the Lakepa family.
The Qarase Connection
Ousted PM Qarase was Chairman of FHL from 1992-95 when the scramble for FHL was at its frenetic best as a small number of well-connected individual shareholders outbid and outdid their own provinces in owning shares in FHL. Qarase not only facilitated this move that was against company policy, but actively encouraged it in a bid to have that policy, that he saw as a hindrance to individual ambitions, changed. He then conveniently became the GM of FDB from 1996 till he’d helped drain that bank of $220m.
In 2000, he was providentially handed the reins of national government and from thence he proceeded to execute his business acumen on the national tableau. Stay tuned for more on Qarase in the next issue.
--
Subhash Appana is an academic and political commentator. The opinions contained in this article are entirely his and not necessarily shared by any organizations he may be associated with both in Fiji and abroad. Email subhasha@ais.ac.nz
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