Fijian businesses lack oversight, Ratu Joni

Fijian businesses lack oversight, Ratu Joni

VERENAISI RAICOLA

www.fijitimes.com - Thursday, July 10, 2008



RATU Joni Madraiwiwi says the establishment of provincial companies drawing on the communal organisation of Fijian society was intended to broaden indigenous participation in commerce and the private sector.

But its success has been limited as the mechanism of setting up companies on a provincial-wide basis has been a cumbersome method of seeking to benefit individual Fijians and their families, he said.

"Many Fijians contribute to community enterprises without deriving any material benefit for their effort," said Ratu Joni.

The former Vice-President said the provincial involvement in business was seen as a worthwhile concept without further analysis or consideration. He said a business required discipline, commitment and tight control over finance. Ratu Joni said provincial companies were established without clear corporate structures.

"The appointment of boards was inconsistent, shareholdings and payment of dividends uncertain for lack of specificity and there was little financial accountability.

"Further, there was a lack of oversight and administrative support to assist these businesses in their formative stages," he said.

Speaking at the opening of the Capital Markets Development Authority provincial and tikina companies workshop yesterday Ratu Joni said the structures of business from the board down to its most junior employees needs to be professional.

"Most provincial and tikina businesses have ad hoc arrangements in place that are no longer appropriate.

"The manner in which businesses conduct their activities and operations are factors which potential investors consider and study carefully."

Ratu Joni said if they liked what they saw, were satisfied with the corporate structures in place as well as the return on their investment, they would invest.

"If not, they go elsewhere."

Ratu Joni said provincial companies had problems having financial and accounting skills to maintain proper records.

He said examples of success stories were the Yatu Lau Company Limited, the Ka Levu Trust and its investments, Mucunabitu Ironworks Co-operative, Yavusa e Tolu Holdings of Narewa, Nadi and the tikina of Lutu in Naitasiri to name a few.

Ratu Joni said rent proceeds from the Native Land Trust Board amounted to more than $30million annually that could provide a huge potential for investment capital.

"Most of the funds continue to be utilised by Fijian landowners for their daily needs. "It is of course their money and they may use it as they wish.

"But it is also incumbent upon leaders in the landowner community to look beyond their immediate wants, to business and education opportunities for themselves and their mataqali, yavusa or vanua," said Ratu Joni.

He said rent collected by the NLTB was significant as it represented capital sums that could be deployed for wider effect.

Provincial firm hits $2.2m
Thursday, July 10, 2008

LAST year was the first time a provincial company raised $2.2million from capital markets through a public share offering.

Capital Markets development Authority chairman Daryl Tarte said the initial public offering by Yatu Lau Company was targeted to raise $1.5m.

Mr Tarte said at the close of the 30-day offer period the company received applications valued at $2.8m and had to refund $593,304 as the total share allocation was oversubscribed.

"The authority believes many more provincial and tikina companies can do the same and may flourish from the disciplined and regulated capital markets."