$12.5m bidto recover its investment in the Momi Bay Development Fiji

[Stacey King]

FIJI TIMES ONLINE Elenoa Baselala Monday, May 10, 2010

THE Unit Trust of Fiji is seeking to recover its $12.5million investment in the Momi Bay Development through a mortgagee sale of over 300 acres of freehold land.

UTOF with the Banaban Trust ($1m) invested in stages two and three of the development, which included the construction of the Ritz Carlton Resort, the expansion of the golf course and residential lots.

The Momi Bay Development project was to have cost a tune of $225m and would have been another Denarau for Fiji, the same concept for the Natadola Tourism Development project.

The financial model for such concepts "spends"on the construction of hotels, resorts and golf courses with revenue coming from the sale of residential lots.

Last year, following a directive by the Capital Markets Development Authority, the UTOF hired accountancy firm G Lal & Co to assist them in improving the management of the trust.

One of the concerns of the CMDA was the non-performance of the Momi loan.

The UTOF also sought the FNPF to take over its exposure but this may have fallen through.

The Fiji National Provident Fund invested in the first stage of the development, taking over the Fiji Development Bank exposure and lending $74m to the project developers Matapo Limited, a subsidiary of Bridgecorp Company Limited. The Bridgecorp Company Limited collapsed last year in New Zealand with over 14,000 investors losing their investments of around $500m. Its directors were taken to court for making false statements in the company annual reports and prospectuses. The company claimed it invested over $100m into the Momi development.

It conducted an auction of the property but the highest bidder was only $44m. FNPF has already written off $18m from the Momi project. Aisake Taito could not be reached for a comment.