Papua New Guinea appoints central bank governor amid corruption investigation

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Sonjib Chandra Das
  • Update Time : Saturday, March 1, 2025
Papua New Guinea, Anti-Corruption, Financial Action Task Force, foreign currency, International Monetary Fund, 

Papua New Guinea’s (PNG) central banking sector has been thrust into controversy following the permanent appointment of Elizabeth Genia as the governor of the Bank of Papua New Guinea (BPNG), despite her being the subject of a police investigation for suspected money laundering. This development, first revealed through court documents obtained by the Organized Crime and Corruption Reporting Project (OCCRP), has raised serious concerns over governance, transparency, and financial integrity in PNG.

The National Fraud and Anti-Corruption Directorate of PNG’s police force initiated a probe into Genia’s financial activities in 2023, leading to searches of BPNG offices in August and September of that year. Investigators alleged that Genia had deposited significant amounts of money from undeclared sources into her personal bank account. Additionally, she was suspected of receiving personal payments by check from two companies engaged by BPNG for unspecified services.

Rather than cooperating with the investigation, Genia filed a legal challenge later in 2023 to halt the probe, arguing that the police action violated her rights to privacy and protection against arbitrary searches. Her efforts initially succeeded in temporarily freezing the investigation, but the National Court ultimately dismissed her case in April 2024, describing her legal maneuver as “an abuse of the Court process.” Despite this ruling, there has been no confirmation on whether the investigation remains active.

Adding to the controversy, Genia has also faced scrutiny over a separate fraud squad investigation into a firearms procurement deal for BPNG’s security team. Reports suggest that, in 2017, BPNG contracted a local company-without a proper tender process-to replace three security pistols with ten new firearms. The contractor, allegedly unlicensed to deal in firearms, failed to deliver the weapons on time and did not provide proof of the destruction of the old guns. Although the case was initially reported in 2020, its current status remains unclear.

Genia’s appointment as BPNG governor comes at a time when PNG is struggling with serious financial sector challenges. Her tenure follows the ousting of former acting governor Benny Popoitai, who was known for his aggressive stance against money laundering and corruption. Popoitai led PNG’s Financial Analysis and Supervision Unit (FASU), which initially flagged suspicious transactions linked to Genia and passed the information to the fraud squad.

His removal from office and Genia’s subsequent appointment have fueled speculation about political interference in PNG’s financial oversight mechanisms. Popoitai, who later sued BPNG to challenge his forced retirement, confirmed that FASU had no direct role in criminal proceedings but had provided intelligence that led to the police investigation.

The broader implications of these events are alarming. PNG is currently at risk of being placed on the Financial Action Task Force’s (FATF) “grey list,” a designation given to countries with deficiencies in their financial crime prevention measures. The FATF has already warned PNG that its failures to combat corruption, illegal logging, tax evasion, and financial crime could lead to international scrutiny, complicating foreign investment and trade relations.

Paul Barker, head of PNG’s Institute of National Affairs, expressed concern over the deteriorating standards in financial governance at BPNG. He warned that the appointment of a central bank governor under investigation for financial crimes could further undermine confidence in PNG’s financial sector and exacerbate the risk of FATF sanctions.

The PNG government has remained largely silent on the controversy surrounding Genia. Treasurer Ian Ling-Stuckey, the minister overseeing BPNG, refused to engage with reporters’ inquiries. Instead, he dismissed the credibility of investigative journalists, calling them a “fake organization” and refusing to answer questions unless they verified their credentials. This defensive response raises further concerns about accountability within PNG’s financial governance structures.

Meanwhile, questions remain over how Genia’s appointment was approved despite ongoing criminal investigations. The cabinet’s decision to permanently install her in early 2024 appears to contradict best practices in financial governance, where regulatory transparency and integrity are essential. The lack of an independent review or parliamentary oversight has deepened concerns about political favoritism and institutional weaknesses within PNG’s financial regulatory bodies.

Genia’s rise to the top of PNG’s central banking system has been marked by a struggle over control of financial oversight. Popoitai’s removal and Genia’s appointment highlight internal power struggles that have ramifications for the country’s financial stability.

During his tenure, Popoitai had launched both civil and criminal complaints against Puma Energy, a subsidiary of global commodities giant Trafigura, for allegedly laundering money by transferring over $200 million of PNG’s foreign currency reserves overseas without proper authorization. The case against Puma led to the company cutting back its operations in PNG, triggering a nationwide fuel crisis that disrupted flights and caused fuel shortages.

While Puma Energy has since resumed operations following intervention from alternative suppliers, the confrontation underscored the deep-rooted financial governance challenges in PNG. The allegations against Puma, combined with the scandals surrounding Genia, suggest that BPNG’s leadership is embroiled in a broader struggle between reformists seeking financial transparency and entrenched interests resistant to regulatory oversight.

The appointment of a central bank governor under police investigation could have significant consequences for PNG’s economy. International institutions such as the International Monetary Fund (IMF) and the World Bank closely monitor governance standards in developing nations, and any perceived financial instability or corruption could impact future aid and investment.

Additionally, if PNG is formally placed on the FATF’s grey list, the consequences could be severe. Grey-listed countries face increased scrutiny from global financial institutions, leading to difficulties in securing international loans, attracting investors, and maintaining correspondent banking relationships. This could, in turn, hamper economic growth and increase financial hardship in a country already struggling with high poverty rates and economic volatility.

As PNG navigates these financial and political challenges, the next steps will be crucial in determining the credibility of its banking sector. If authorities fail to address the allegations against Genia, PNG risks further international isolation and financial instability.

For meaningful reform to take place, there must be independent investigations into the allegations against Genia, transparency in financial transactions, and an end to political interference in banking oversight. Civil society groups, financial experts, and international organizations should push for stronger anti-corruption mechanisms to ensure that PNG’s financial sector remains stable and trustworthy.

In the short term, the government must provide clarity on the status of the money laundering investigation against Genia, ensuring that due process is followed without political influence. The fate of PNG’s financial credibility now hangs in the balance, and how the government responds to this scandal will shape the country’s economic trajectory for years to come.

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Avatar photo Sonjib Chandra Das is a Staff Correspondent of Blitz.

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