Part One of a Special Investigation by Victor Lal
The multi-million dollar Yatu Lau Company Ltd has been invariably associated with the late Ratu Sir Kamisese Mara who, it is frequently claimed, founded the company in 1972. A special investigation into the company reveals that it was, in fact, the brainchild of a young investment banker Laisenia Qarase, who went on to become the Prime Minister of Fiji twice after winning two consecutive general elections, in 2001 and 2006.
Qarase was however deposed in the 2006 coup by Frank Bainimarama and his treasonous cohorts. The dictator is now surrounded by the Mara-Ganilau siblings, who control the Yatu Lau Company through massive ownership of Class A (Lauans only) shares in the company. We will return to the founding fathers of the company, the so-called 7 men with 7 dollars – ‘The Magnificent Seven’
Yatu Lau and the Lauan community
Yatu Lau was set up in 1972 solely for the benefit of Lauans, and according to the company, by the paramount chief of the Lauans – Ratu Sir Kamisese Mara, and its membership was open only to Lauans for nearly 25 years. During these long years it could be argued that Yatu Lau practised blatant apartheid against other non-Lauans – resembling the much reviled caste system in India, where upper caste Brahmin Hindus strive to exclude their fellow lower caste Hindus.
On personal reflection, Yatu Lau’s very establishment and exclusion of others betrayed the much vaunted multi-racial philosophy of the Alliance Party of Ratu Mara, a party to whose philosophy my family slavishly ascribed to – boy, o’ boy, how naïve I was when I used to obediently sit at the feet of the paramount chief Mara whenever we visited him at his Prime Ministerial residence at Veiuto– for my father was, after all, President of his Tailevu North Alliance District Council and my uncle (my father’s elder brother) was the Alliance Party’s Lord Mayor of Suva in the 1970s, the decade when Mara is credited with establishing the Yatu Lau Company Limited.
My family, along with other progressive Indo-Fijians, were also instrumental in the founding of the Indo-Fijian wing of the Alliance Party, the Indian Alliance; alliance in politics but not in business. Our family’s reward of political service was a street named after my uncle in Raiwaqa (where I grew up) in Suva. I had no idea that we could worship and wash the feet of the great and imposing paramount chief from Lau but could not hold shares in his company, for it was a preserve of his tribal clan.
But one shrewd relative of ours, married to a part-Lauan woman, managed to obtain over hundred Class B shares from Yatu Lau when the company went public in 2007. Apparently, the Class A and B shares have the same benefits except B shares have no voting power. But Class A shares are still not open to non-Lauans. Another relative used his marriage connection to a Rotuman woman to raid the collapsed National Bank of Fiji; after all, a Rotuman, Vasanti Petero Makarava, was the bank’s CEO, who himself owed over half a million dollars to the collapsed bank.
Ratu Sir KKT Mara Scholarship Fund
Nor was I aware, when I went up to Ratu Kadavulevu School in Lodoni, Tailevu, in the late 1970s that there existed the Ratu Sir KKT Mara Scholarship Fund for Lauans. In fact, I was not aware of its existence but only very recently. I wonder if my RKS classmate Jo Nata, now sharing the prison compound with George Speight as his side-kick and rebel media spokesman, knew of the scholarship fund. In fact, a vast majority of Fijian contacts of mine say they have never heard of the scholarship fund, which holds 100,000 Class A shares in Yatu Lau. When was the above scholarship fund set up? The above fund was also listed as holding 300,000 shares in the Fijian Holdings Ltd.
We may recall that during the bitterly fought 1987 general election the late Dr Timoci Bavadra led Fiji Labour Party, had criticized the Alliance Party’s resource distribution policing, accusing Mara of diverting the country’s wealth for the development of Lau. The Alliance Government had set aside $3.5million each year to promote Fijian education (oops not Fijian but the i-Taukei under the new Fijian Affairs Act recently signed into law by Mara’s son-in-law President Nailatikau).
During the election campaign, Ratu Isimeli Cokanasiga, the USP assistant registrar, had asked why, in 1985, $169, 278 worth of scholarships went to Lauans as against $19,278 for the people of Lomaiviti. Meanwhile, Bavadra also claimed that resources poured into Lakeba, Mara’s home province in Lau, were derived from wealth produced elsewhere in the country, namely the western division of Fiji.
In another provocative move, the FLP, claiming that the Party stood ready to assist the common man and the underprivileged, disclosed that it was providing financial support in a legal battle between a group of Fijian villagers and the wife of Mara, Adi Lady Lala Mara, whom the group wanted dismissed as the sole governing director of Nakuruvakarua Ltd, the company which managed the incomes received in rents from the owners of The Fijian, a resort hotel, and was supposed to distribute it to the owners of Yanuca Island where the resort was situated.
The owners of The Fijian, Fiji Resort Ltd, paid basic rent of $20,000 a year to the company, plus two per cent of the resort’s gross income above $1.8million. The group insisted before the Fiji Supreme Court that they were unhappy with the way Adi Lala had been managing Nakuruvakarua Ltd, and therefore wanted her dismissed.
Nakuruvakarua Ltd and Adi Lady Mara
In the case between Ratu Epi Volavola and Adi Lady Lalabalavu Litia Kaloafutoga Mara before Justice Rooney, it was disclosed that Yanuca, situated off the coast of the province of Nadroga, on which ‘The Fijian’ has been built on it, is freehold land, as evidenced by documents stretching to 23 August 1909. Before 1930 an official, known as the Native Commissioner was registered as proprietor of the island. The office of Native Commissioner was abolished and replaced by the Secretary for Native Affairs. On 5 July 1930 the then Secretary executed the Trust Deed in respect of the land which included the following: ‘And whereas the said lands are held by the Proprietor on behalf of and for the benefit of certain native Fijians.’
In 1965 the Secretary for Native Affairs, Ratu Penaia Kanatabatu Ganilau (later President of Fiji and one of the directors of Qeleni Holdings which owed the NBF $716,748) as trustee leased the land to Fiji Resorts Limited for a term of 99 years. On 18 January 1969, so it appeared, a meeting of the Tokatoka Nakuruvakarua was held at Cuvu at which among other things it was resolved that Lady Mara be appointed as Trustee in place of the Secretary for Native Affairs.
On 30 October 1969 Ratu Penaia gave effect to the wishes of the Tokatoka Nakuruvakarua by executing the Deed of Trust which recited that: ‘...the persons in trust for whom the said land is held have signified their wish that the said Adi Lady Lalabalavu Litia Kaloafutoga Mara be appointed trustee.’; ‘....to hold the said land upon the trusts mentioned in the said Declaration of Trust dated the 5th day of July 1980’.
Ratu Epi Volavola in his founding affidavit stating he was a member of the chiefly Tokatoka Nakuruvakarua in the village of Cuvu, claimed that by virtue of that membership he was a beneficiary under the Trust Deed, his father being the Ratu Mosese Volavola whose name appeared second on the list of persons in the Schedule to the Trust Deed, being one of the persons who was instrumental in securing Lady Mara’s appointment as trustee in 1960.
To cut the story short, the Supreme Court ruled that Yanuca Island was not native land but freehold, and has been treated as such since 1906. It had a Certificate of Title and was registered under the Land Transfer Act (Cap. 131), had never been placed under the control of the Native Land Trust Board or administered as if it were native lands.
In striking out Volavola’s legal challenge, Justice Rooney ruled that Yanuca Island once was the subject of a Crown Grant could not be treated as native land. It was made the subject of a trust in favour of those considered the rightful owners. So the Trust Deed, having listed the 28 persons made reference to their "’awful heir etc. according to Native custom as though the said persons constituted one Mataqali’.Volavola’s membership of the Tokatoka Nakuruvakarua was incidental to his right to being regarded as a beneficiary under the Trust Deed with rights mentioned against the trustee. Despite the legal setback, the fight to wrest control of Yanuca continued into the political arena during the 1987 general election.
(Editor’s Note: We wonder whether the present illegal regime wanted to remove Ratu Sukuna Day because Ratu Sukuna had stated that chiefs don’t own land it is the people who own the land as well as their chiefs with focus on service to the people.)
Suva lawyer Tevita Fa had added more woes to the Mara family when a month before the 1987 Rabuka coups he filed a writ in the Lautoka Supreme Court against Mara, claiming that Mara, as Tui Lau, was not the rightful owner of 400 acres of land at Sawana village in Vanua Balavu, Lau, the home province of Mara. The writ, filed on behalf of two descendants of Tongan conquerors, Alipate Fatafehi and Lupe Puleiwai (Mara’s first cousins), further sought an injunction from the court to stop Mara from entering the land in dispute on the grounds that he had no right to ownership or occupation of it.
In historical context the writ, filed at the height of polling, rekindled, at least, privately, the debate about the place of Lauans in national politics. The writ claimed that the title, Tui Lau, was created by Enele Ma’afu, the Tongan chief, after he conquered and settled with his Tongan followers in Sawana in the Lau Group. The late Ratu Sir Lala Sukuna had been the second Tui Lau after Ma’afu and the Tongan elders had conferred the title on Ratu Sukuna; this title became a subject of dispute, with Mara holding only the title of Tui Nayau of Lakeba.
The writ pointed out that following a dispute over the land in 1939, Ratu Sukuna, as chairman of the Native Lands Commission, ruled that the land belonged to the two plaintiffs’ father. In 1966, however, following another dispute, the NLC dealt with the question of ownership and ruled that the land belonged to Ratu Mara.
The anti-Lauan campaign became so unbearable that Rabuka’s co coup-conspirator, one of the leaders of the violent Taukei Movement, political turncoat and NBF debtor Apisai Tora was brought forward to rebut Bavadra. Tora accused the FLP of dividing the Fijians in order to reduce their political influence in Fiji. The FLP, he said, was a political party whose main goal was to reduce the Fijian voice in their own land. Tora pointed out that the attack on the Lauans was part of that deliberate strategy. In particular, he stated: ‘Now the development of Lau is criticised. Next it will be Lauans living outside Lau and their achievements that will be condemned. The ultimate goal will be to remove all Lauans back to Lau because these Lauans are obstacles to the ambitions of Dr Timoci Bavadra and Labour Party.’
It is not surprising that in his ‘Operation Order’ for the coup, Rabuka had singled out Fa, with or without’s Mara’s approval, for rough treatment. The other two individuals to be roughed up were Ratu Mosese Tuisawau (high Rewan chief and half-brother of Mara’s wife) and William Sutherland who became permanent secretary to Bavadra after Mara was defeated in the 1987 election.
On 14 May 1987 Bavadra was overthrown in the first of many coups to follow in Fiji. After he was released from military custody he accused Mara of being behind the coup; he said that in his four weeks in office, he had only just begun to uncover the corruption in the Mara government.
When we, under the auspices of the Movement for Democracy in Fiji, hosted Bavadra and his wife Adi Kuini (Bavadra had travelled up to London in 1987 hoping to plead with the Queen not to recognize the Mara-Ganilau post-coup regime) he told me one of the principal companies he wanted to investigate was the Lauans only Yatu Lau Company Ltd. I did not pay much attention to his claims for we had a bigger fight on our hands, to give back to Fiji, what Mara-Ganilau-Rabuka trio had stolen – democracy and a Bavadra government to the voters of Fiji. Personally, however, I was still smarting from the political defeat of the family’s Mara led Alliance Party at the hands of Bavadra.
Yatu Lau: The Secret of its Business Success
What has been the key to Yatu Lau’s success? According to an interview that Michael Makasiale, then manager finance and administration, gave to Fiji Islands Business International (IBL) in July 2005, ‘It’s a matter of getting the basic rights. The plan is to grow the company and pay a good return to shareholders’. Makasiale is now CEO of Yatu Lau. The interview was conducted by IB’s staff writer Dionisia Tabureguci, who noted that Makasiale, the adopted son of the late Solomoni Makasiale, ‘spoke from beneath a framed picture of a rather young late Tui Lau and former prime minister and president Ratu Sir Kamisese Mara’.
At the time of the interview, Yatu Lau had only just released its financial results and company overview to the media and the public. It carried an announcement of a pre-tax net profit of $477,582 for the financial year ended 31 December 2004 and recommended a final dividend of eight percent to its shareholders. The IB magazine observed: ‘No mean feat for a company that started with seven issued shares at $1 each and the participation of seven people headed by the late Ratu Mara. Considering that it is an unlisted company and therefore not under any obligation to make its information public, except to its shareholders, one has to wonder what the intention is. Perhaps the company is getting itself ready to list on the stock exchange and is practising the release of information as required of listed companies?’
‘Oh, no, no, no,’ Makasiale quickly doused any such thought. ‘We have indeed looked at that, but we have to have a very good reason if we are to go ahead with it. For example, what will the company gain from listing? This is one of the questions we will have to ask ourselves. Investment in this company is restricted only to people of Lauan descent, the vasu and those married to Lauans. We have estimated the population of this group at 40,000, so it is a small group of people and that may have a restrictive effect on actual trading,’ he explained to IB.
The IB Magazine continued: ‘Of course, the rules can be amended, but for now, the company is doing what some province-backed investment institutions are doing: raising money via a soli drive channelled through the traditional social machinery of a bose ni yasana (provincial council). Boasting a long list of 743 shareholders comprising individuals, islands, mataqali, villages, youth groups, companies and families to name a few, Makasiale believes it is still way short of achieving the original intention of its founder. One could almost imagine the conception of this company. The late Ratu Mara - paramount chief of the Lau province - perched on his chair, vacant eyes staring somewhere into the not too distant future to another time where the $7 seed has become a tree of wealth for his people. That was way back in 1972 when very few provinces or tikina were setting up investment vehicles or funds to complement the financial needs of their communities.’
Over 30 years on, the IB magazine noted, Yatu Lau has ballooned into an investment entity with 743 shareholders, a paid up capital of $2.5 million, net assets worth over $6 million in 2004 and an 11-year dividend history-all at over eight percent return. It could well be said that the company has come a long way from its raw beginning, where the seven gentlemen would travel all over Lau to sell the idea and mobilise shareholders via a $4 deduction for every production run they did with the copra millers.
‘It was the vision of the Turaga (Ratu Mara) to have the company widely owned throughout the province,’ Makasiale told IB as he related the genesis of the entity. ‘His vision was for every Lauan family to own shares in this company so we are planning to do a share drive next year  using the yasana (province) network. We are also getting a lot of enquiries from people who want to use their FNPF (Fiji National Provident Fund) funds to buy shares in the company so we have written to its management to approve Yatu Lau under its Small Business Investment Scheme.’.
The FNPF had clarified to IB that companies approved for this particular scheme were those listed on the South Pacific Stock Exchange with a five-year dividend history and approved by management. The IB stated: ‘But even if Yatu Lau did not get to list on the market, it is already one step closer by registering itself on the Kontiki Price Matching Service, a local over - the-counter trading facility featuring unlisted companies, run by Kontiki Stockbroking Ltd. Judging from how trading there is going, there is certainly a demand for YLCL shares.’
At the time of the IB interview, Makasiale informed the Magazine that ‘It’s currently trading at $1 (per share) to $1.50, but if you measure the value using net asset backing, one share is worth over $2’. IB continued: ‘The basics he was referring to runs deeper than just being a good corporate citizen. Being an investment entity is probably already tough enough in Fiji with the often talked about lack of good investment opportunities that exist. But being an investment entity with a yasana tag hanging onto its name takes the company to another dimension of challenges. These challenges are closely associated with the cultural norm of the indigenous Fijian society. ‘
‘Oh yes, it happens,’ Makasiale quietly affirmed. ‘I think it’s a problem faced by most provincial investment companies. There seems to be an expectation by the province that the company forks out money whenever they ask for it. But Yatu Lau has been managed in such a way that there is a clear delineation of its roles in that the company runs the company and the province runs the province. One good example is when the Turaga (Ratu Mara) passed away and we were expected to play a bigger role in terms of finance. We put our foot down and said no. We would make a normal contribution like any other company going to pay their respect, but that’s where it ends. I think being able to do that is a very big contributing factor to the success of Yatu Lau.’
According to the IB, ‘This approach would certainly be viewed as insensitive and even awkward in a cultural setting, particularly with the passing of a very important figure in the province. But it is the approach nurtured by the late Ratu Mara himself.’
‘Ratu Mara was the board chairman until he passed away last year [18 April 2004] and he would have expected the company to do exactly what it did,’ Makasiale said. To quote IB: ‘As a company chapter closes with the passing of its founder, another has only just begun which would be driven by the basics of good corporate governance, hence, the move to publicise the affairs of the company.’
‘We are in the process of finalising our corporate plan for the next five years. Our plan is to be a good corporate citizen, to grow the company and to pay good returns to our shareholders. There are no secrets to success if you really think about it. We believe our success has been very driven by the effort of the board to get the basics right. We do proper planning, regular board meetings, we call an annual general meeting every year, we have a very good relationship with our bankers, we have a strong board that is committed to growing the company and ensuring we meet performance targets and pay good dividends to our shareholders, we have timely audits and we strive to practice good corporate governance,’ said Makasiale.
Transparency through disclosure would no longer be just a punch line.
And while that would put Yatu Lau among the mavericks of indigenous investment entities, Makasiale believed it was the way more and more companies would be positioning themselves in a market that is increasingly getting sophisticated.
It's ‘strong board’, IB noted, headed by Prime Minister Laisenia Qarase and featuring a line-up of professionals with diverse backgrounds, has even gone a step further to impose a rule that the board is to have no less than three women.
‘The board is conscious of the fact that we need to diversify and not rely on just a few investments. At this point, we are looking at setting up a land development company that would function like Denarau, but on a smaller scale. We are going to set up that company along with some big players in the industry like the hardware and real estate companies,’ Makasiale said.
Yatu Lau’s property investments at the time of the interview included the Yatu Lau Arcade, Shell House, Dinem House and Knolly Apartments. It also owned shares in Amalgamated Telecom Holdings, Carlton Brewery (Fiji) Limited, Kontiki Growth Fund and the supermarket chain RB Patel Ltd.
Who were the 7 men behind the Yatu Lau Company?
On 20 December 1971, the Registrar of Companies (ROC) was notified that the following persons were to be directors of Yatu Lau Company Ltd:
(1) Laisenia Qarase, 6 Moti Street, Civil Servant;
(2) Solomone Halaapiapi Makasiale, 294 Waimanu Rd, Suva, Bank Officer;
(3) Tevita Loga, 31 Green Street, Suva, Radio Announcer;
(4) Sekope Temo, Service Street, Suva, Civil Servant;
(5) Ilaisa Mateiyaloma Cavu, Approved School, Nasinu, Civil Servant.
On 6 March 1972, the following two were added to the list as directors:
(1) Ratu Sir Kamisese Kapaiwai Tuimacilai Mara, K. B. E, Veiuto, Suva, Politician;
(2) Mikaele Mataika Kolinio Yasa, 66 Nabua Rd, Suva, Civil Servant;
Yatu Lau was registered on 17 January 1972 and got its Certificate of Commencement on 14 March 1972. The registered office was listed as Suva or elsewhere in the Dominion of Fiji. The names and addresses and description of the directors now as follows:
(1) Ratu Sir Kamisese Kapaiwai Tuimacilai Mara;
(2) Mikaele Mataika Kolinio Yasa;
(3) Laisenia Qarase;
(4) Solomone Halaapiapi Makasiale;
(5) Tevita Loga, Radio Announcer;
(6) Ilaisa Mateiyaloma Cavu;
(7) Wate Basaga Tagilala, Tamavua, Civil Servant
The share capital with which Yatu Lau proposed to be registered was $500,000 divided into 500,000 shares of $1each. On 17 May 1972 the ROC was informed that Mara was chairman and Yasa was secretary of the company. Qarase allowed Mara to continue as chairman, and in 2008, the deposed Prime Minister was listed as owning merely two Class A shares in the $24million company, chaired by Mara’s daughter Koila Nailatikau, the wife of President Epeli Nailatikau. Which Lauans hold Class A shares in Yatu Lau Company Ltd?
To be Continued