Peseta reveals suspicions over L.P.A. affairs
The Associate Minister of the Ministry of the Prime Minister and Cabinet, Peseta Vaifou Tevaga, testified in the criminal proceedings against another senior Member of Parliament and other business associates in the Supreme Court on Tuesday.
Peseta was the first witness in the hearing of charges against senior Member of Parliament, La’aulialemalietoa Leuatea Schmidt, his wife Tupea Heather Schmidt and business associates, Apulu Lance Polu, Martin Schwalger and Tuitui Aiolupo.
The accused are facing 234 charges in relation to a dispute over a nonu company called the Local Partners and Associates. The charges include forgery, theft, obtaining by deception among others.
New Zealand lawyer, Mark Stephen, and co-counsel Kristy Sisi Li, have been flown in by the Attorney General’s Officer to prosecute. They are being assisted by Attorney General’s Office lawyer, Quentin Sauaga.
Queens Counsels, Kieran Raftery is representing La’auli while Aaron Frank Perkins is representing Apulu. Local lawyer, Tauiliili Harry Schuster, is representing Schwalger, Mrs. Schmidt and Aiolupo.
In his evidence, Peseta said he became suspicious that something was wrong with Local Partners and Associates when his son, Leiataua Danny Schwenke, raised concerns about it.
Peseta said he became suspicious just after L.P.A. had purchased Pure Pasifika, company that was in receivership, for $1.5 million. Peseta said the purchase of the company included 10 vehicles and a quarter acre land on which the factory was located at Vaitele. In addition, there were barrels of nonu juice, enough to fill two 20 foot freight containers.
“Danny had told me there was something wrong with the company,” Peseta told the Court.
“He said the trucks have been taken to La’auli’s land at Maota Samoa Vaitele together with the 20 ft containers and barrel of nonu juice.
“Danny had also told me that Lance and Martin are signing the cheque book and he was no longer a signatory. My son is the only one with shares but he was not signing the cheque book. I then suspected that something was wrong with the company.”
The Court heard the nonu juice in the barrels, which were all part of the assets included in the purchase of Pure Pasifika, were intended to be sold.
Asked to explain what he meant that his son was the only shareholder, Peseta said if it wasn’t for their family land belonging to their business called Aldan Constructions, L.P.A. would not have been able to purchase Pure Pasifika.
He said that parcel of land was used as security to guarantee a loan of $1.8 million from the Samoa National Provident Fund intended to buy Pure Pasifika.
The Court heard that the land belonging to Peseta’s family already had an overdraft of $100,000 on it with the National Bank of Samoa.
While the bid to buy Pure Pasifika cost $1.5 million, the additional amount from N.P.F. was intended to pay off the overdraft from N.B.S. to release the land to secure the loan at N.P.F.
Peseta told the Court he agreed to use their family land to guarantee the purchase when it was suggested by his son. He said Apulu and Schwalger had no money for the transaction.
“I felt disappointed that they did not have any money to buy Pure Pasifika,” said Peseta.
“I had suggested that since there are three directors for L.P.A. then each director should put in $500,000 each to buy Pure Pasifika. But Martin and Apulu had said they do not have any money.
“I thought as a businessman there is no money for the purchase of Pure Pasifika and I had accepted the suggestions from my son use our land to secure the loan (from N.P.F.) and that will count for his share in the company (L.P.A.).”
Peseta also told the Court about how L.P.A. was formed. He said it originated from a company called Local Partners set up by him and La’auli.
Sometime around 2011, Peseta recalled he was asked by La’auli to go with him to China to explore the nonu juice market there.
He said he was aware that La’auli was working in partnership with the Pure Pasifika company and La’auli Michael Jones in the nonu juice venture.
When they arrived in China, the Associate Minister said there were discussions in promoting the nonu juice, its benefits and the lucrative export market in Asia.
“Pure Pasifika were buying nonu juice from Savai’i and it was exported overseas,” said Peseta. “My understanding of La’auli’s involvement is a Chinese man named Tupailelei Jack Chen who was bestowed the matai title from his village.
“La’auli and Chen were working together to export nonu juice and they were involved in promoting the nonu juice to its export market. In China there were discussions about the functions of the company (Pure Pasifika)…”
Peseta said after traveling to China, he was asked by La’auli about his thoughts on establishing a nonu juice company, considering the huge market for it in China.
He made it clear it was La’auli’s idea to setup the company. Peseta said he agreed to it because it’s a good business and it would benefit the people of Samoa in terms of exports. He added it was also agreed that La’auli’s son and his son would become the directors and shareholders for the company when it gets registered.
However the plan did not eventuate. Peseta said La’auli decided to replace his son with Martin Schwalger while Peseta used his other son residing in Samoa, instead of the one living in the United States.
Asked if there were any reasons from La’auli as to why he decided not to have his son’s name used for the registration of the company, Peseta said he was not sure. He said La’auli just did not want to have his son’s name included in the company.
It was in October 2012 that the original company called Local Partners was established and registered. The agreement was for Schwalger to hold 50 percent shares while Schwenke the other 50 percent.
The Court heard there were no trading and business from Local Partners in between 2012 – 2013 as the company also did not have an office and was not in operation.
It wasn’t until 21 January 2013 when a meeting called by La’auli attended by Schwalger, Schwenke that Apulu came in the picture.
According to Peseta, La’auli and Schwalger suggested to include Apulu in the business venture making him the third director. The recommendation to include Apulu was supported for his experience particularly from the Pure Pasifika company.
It was then that a resolution was made by the directors to change the name of the company to Local Partners and Associates and have Apulu as the other director.
After discussion and negotiations, it was decided that the make up of the shares be changed and Schwenke will have 35 percent, Schwalger 32.5 percent and Apulu 32.5 percent.
“Danny wanted to maintain his 50 percent shares but La’auli had asked if the shares can be divided equally amongst the three directors,” recalled Peseta.
“Since it was them that brought in Apulu, Danny had wanted to keep his 50 percent shares but later on they decided to change the shares.”
Asked why he had agreed to divide the shares the way it was, Peseta said the company had just started and had thought about the experience from Apulu.
Following the meeting, Peseta said Apulu was instructed to inform the company lawyer, Maiava Visekota Peteru, to do the paper works for the change of name and director of the new company.
He told the Court he was shocked when he found out later that Apulu had signed a letter instead of the lawyer.
Peseta will continue his evidence today