25 Feb 2005

Call for probe into Nauru demise

4:20 pm on 25 February 2005

A former adviser to Nauru says there must be an urgent financial probe into how the country went from a position of wealth to the brink of insolvency.

Nauru expects to receive 63 million US dollars back from the liquidation sale of its Australian property assets, but is arguing with receivers and landowners over the fund.

It says the receivers, Australian-based Prentice Parberry Barilla, are taking too long to release the money.

And landowners on Nauru say when the money is paid out it should go to them, as beneficiaries of the Phosphate Royalties Trust, and not into Government control.

Emeritus Professor Helen Hughes, a senior fellow of Australia's Centre for Independent Studies, says forensic accountants must inquire into how money was lost in the first place.

"There is no way of protecting that new 60 million, if that's what's there, I'm still dubious. But if that's what's there, without having some knowledge of what parties have stolen the previous money. I mean, what are we talking about, 2 billion dollars?"

Professor Hughes says Nauru is being badly advised by Australia and the Pacific Islands Forum who should have recommended such an inquiry before now.