6 July, 2022
“Why is the Fiji National Provident Fund’s acquisition of 30.02% shares in Fiji Airways clouded in financial secrecy and lacking complete transparency and accountability to the workers of Fiji who own the Fund?”
This is the question asked by National Federation Party Leader Professor Biman Prasad after following the public announcement of FNPF acquiring 30.02% shares in Fiji Airways and therefore becoming the second largest shareholder of the airline behind Government that owns 51% shares.
Professor Prasad said this deal raises more questions that needed clarity as soon as possible.
“The first question that needs clarity is the role of the Attorney-General and Minister for Economy in this deal as he quickly jumped to comment and say this should have happened much earlier”.
“Here is a Minister whose multiple portfolios make him responsible for both FNPF and Fiji Airways. Why cannot he be upfront and disclose how much FNPF paid to acquire 30.02% shares in the airline?”
“Is it true that FNPF has bought the shares for $96 million just to help Fiji Airways raise more cash?”
“Secondly, there is confusion as to whether these are issues of new shares as stated by the airline or existing ones”.
“We are now told that Government holds 51% of shares but on 22nd October 2021, the Economy Minister told parliament while seeking an additional guarantee for Fiji Airways that Government now owned 74.56% of the entire share capital, with Qantas Airways Ltd shares reducing from 46% to 24.04% while 1.4% were held by the rest”.
“Therefore, with government now stating it owns 51% shares, does it mean that FNPF has acquired 23.56% of government shares and the reminder from Qantas? And if it is a new share issue to raise capital why is now government saying it owns only 51% instead of 74.56% as stated last October?”
“Thirdly, the people of Fiji particularly the workers as owners of the Fund have a right to know what is the amount of Fiji Airways’ debt portfolio with FNPF?
“While the FNPF Annual Reports do not state the exact amount owed by Air Pacific (trading as Fiji Airways), is it true that around $200 million is still owed to FNPF?”
“We know that $53.6 million has been guaranteed by Government, part of the $455 million guarantee approved by parliament on 25th May 2020, that was later increased to $561 million on 22nd October 2021”.
“And we know that loans taken by Fiji Airways before this were guaranteed by assets, that is aircraft and insurance”.
“The FNPF 2021 Annual Report also talks of a 7 year moratorium granted to Fiji Airways on loan repayment, which will end in December 2023. Until then, they continue to pay interest only”.
“The Report defines the need for a moratorium on a loan portfolio, when it becomes a case of credit risk and default”.
“Despite this, FNPF has now become the second largest shareholder in the airline that will enjoy a 7 year repayment holiday of workers’ money that continues for the next 18 months”.
“It is only fair that the people need to know what is the total sum of money that the workers of Fiji have pumped into Fiji Airways, inclusive of loans and this latest acquisition of 30.02% shares, without their knowledge or any input whatsoever in the decision to invest in the airline?”