A company owned by two senior Members of Parliament struggled to make payments on a $1.8million loan it took out with the Samoa National Provident Fund (S.N.P.F.).

This was revealed in the hearing of former Cabinet Minister, La’aulialemalietoa Leuatea Polataivao, his wife, Heather Schmidt, business associates Apulu Lance Polu, Martin Schwalger and Aiolupo Tuitui in the Supreme Court.

They have pleaded not guilty to 234 charges including forgery, theft, obtaining by deception among others in relation to the operations of Local Partners and Associates (L.P.A.)

Presiding is Acting Chief Justice, His Honour Vui Clarence Nelson.

On Tuesday, the Manager of S.N.P.F’s Legal Division, Sine Lafaiali’i, gave evidence. Ms. Lafaiali’i, who had only joined N.P.F. four years ago, said she is aware of the case from her previous work at the Office of the Attorney General.

The Court heard that not long after the Local Partners and Associates was in operation, it received default notices from the S.N.P.F.

The notice is indication of the start of foreclosure proceedings, said the Legal Manager.

Ms. Lafaiali’is evidence was mainly to confirm S.N.P.F.’s internal memorandums before the Court and letters addressed to and from the Fund to L.P.A.

The witness confirmed that the land used to secure the loan of $1.8 million belonged to the Aldan Construction Company.

The complainant in the matter and the Associate Minister of the Ministry of Prime Minister and Cabinet, Peseta Vaifou Tevaga, owns Aldan Construction.

Ms. Lafaiali’i said there were two pieces of land used to form a prime security for the loan. One of those was an acre belonging to Aldan’s while the other is the one on which the L.P.A. factory is located at Vaitele.

According to an internal memo from the former S.N.P.F. General Manager, there was a meeting between herself and La’auli.

In her evidence, Ms. Lafaiali’i confirmed that from the records, and based on history of the L.P.A. accounts, it was clear the company was facing problems and at a very vulnerable stage.

The Court heard that La’auli had sought to replace Aldan’s land being used as security for the S.N.P.F’s loan with one belonging to him.

This was to allow the release of the Aldan’s land with the property mortgage of no less than $800,000.

During cross-examination, defense counsel, QC Kieran Raftery asked Ms. Lafaiali’i about the bank statements of L.P.A.

Mr. Raftery said in the course of evidence, during the first year of L.P.A’s operation, the company found it difficult to make regular monthly payments to S.N.P.F.

The Legal Manager agreed, saying that the company had a monthly payment of $24,540. She added that part of the payments was for interest on the loan and it was accrued on a monthly basis.

During the time of civil proceedings into the L.P.A., the Fund had given the company a respite period while the matter was before the Supreme Court.

The Court heard that L.P.A’s arrear with the Fund is $93,000.

The hearing continues.