The lack of trust in each other among partners of Local Partners and Associates led to the failure of the nonu juice project under the now defunct company known as Pure Pacifika.
This is according to one of the partners, La’aulialemalietoa Leuatea Schmidt, who is now the Minister of Agriculture and Fisheries.
La’auli was giving evidence in the hearing of a civil lawsuit filed by former business partner and the Associate Minister of Prime Minister and Cabinet, Peseta Vaifou Tevaga.
La’auli, who was the Speaker of Parliament at the time, and his business associates, Apulu Lance Polu and Martin Jonathan Schwalger, are being sued for more than $3million by Peseta over the nonu business deal.
Supreme Court Justice Tafaoimalo Leilani Tuala-Warren is presiding.
The plaintiff is represented by Leuluaiali’i Olinda Woodroffe and Leali’ifano Dr. Iopu Tanielu. The defendants are represented by Semi Leung Wai.
La’auli had strongly denied he acted illegally and that he breached his legal duties under the Company’s Act 2001, as Peseta claims.
He also rejected a claim that he misappropriated funds belonging to Local Partners and Associates and that he changed the company’s records using deception and illegal methodology.
According to La’auli, Peseta did not trust Apulu with handling money.
“This distrust has led to many problems in a company that was already broken and they were trying to salvage,” La’auli told the Court.
“I told him (Peseta) that I trust Apulu with my life and that we have been trying to establish this lucrative Nonu Juice Project business to benefit everyone, the whole of Samoa, not just a few.”
The Minister said Apulu was the main signatory, however, due to Peseta’s complaints, they “fixed” that by making Peseta the main signatory.
“That caused more problems. Peseta was dragging his feet when he was asked to come to sign cheques.”
While this was happening, La’auli and Apulu continued to look overseas for more nonu projects. Part of this included two trips to New Zealand and couple to Australia as well as Hong Kong.
“However there was the issue of the L.P.A as it did not coincide with the nonu product that we are tirelessly trying to sell to the overseas markets. We then moved to have a trading name for the company to Samoa Nonu Delights.”
He said efforts to try to salvage the relationship with Peseta were not successful.
“Even the Prime Minister tried to persuade him [Peseta] to work things out but he didn't trust Apulu. Yet we have bigger issues like trying to pay back the $1.8million loan from the N.P.F [National Providence Fund].
“With my whole heart, I said, I want to meet with him [Peseta] and sort it out, but that did not happen.”
He said one of Peseta’s concerns was that it was his land that had been used as security for the loan.
“I told him take your land. We will find another land for collateral.”
According to La’auli, there was a suggestion made to Peseta to split the company in three.
“The biggest implication was our farmers who are waiting when the contract was stuck, everything was stuck.
“I wanted to save our friendship and our relationship. We’ve known each other for a very long time. I apologised more than once, repeatedly I even spoke to his wife. But the problem was, he wanted to run everything.
“He wanted to oversee the money and he wanted all the assets. What about me? What about me?”
During cross-examination, Leulua’iali’i put it to La’auli that he used Peseta’s land as collateral for the loan at N.P.F.
“No, that’s not true. It was not only that land that was used for collateral. There were already assets of the company worth $5million but because the company was broke, that’s why N.P.F didn’t trust us.
“We met and Peseta mentioned his land however. He said that he has an overdraft with the bank and we helped him with that.”
Leulua’iali’i asked La’auli if the Chinese businessman he was referring to was Jack Chen, who is now in jail in Hong Kong.
“Yes that’s him, and his matai is Tupa’ilelei,” said La’auli.
Tupa’i Jack Chen also known as Chen Keen, a former executive director of a Hong Kong-listed dairy company was jailed for seven years and nine months for conspiring in an “evil” bid to defraud his company and the stock exchange in January 2016.
Another issue discussed in Court was several cheques issued in the name of La’auli’s wife. Leulua’iali’i asked La’auli to explain this.
La’auli said the cheques were not for her, they were payments.
Leulua’iali’i however was not convinced. She demanded proof and records.
In response, the Minister said the records were given to the accountant who used it to prepare a financial statement.
“The accountant cannot just pull records from thin air, he has all the receipts.”
The hearing continues