The tabling of MRDC’s 2024 Audited Financial Statements in Parliament by the Prime Minister is a milestone for transparency and accountability. MRDC welcomes the scrutiny that follows. The financial results have been the subject of public commentary, and we respond here directly, with facts and with context, to some misleading comments.

  01   UNDERSTANDING THE 2024 RESULT — THE PGK 22 MILLION LOSS 

The reported loss of PGK 22.1 million is at the MRDC parent level, as a standalone. It does not include the subsidiaries. It has two principal components that require clear explanation.

First, PGK 8.6 million (39% of the total loss) is a non-cash investment impairment — an accounting valuation adjustment on investments MRDC holds, not a cash outflow. This reflects market and commodity conditions, not operational failure.

Second, and critically: in 2024 MRDC absorbed a significant level of costs that would ordinarily have been passed on to the 22 landowner companies it manages. MRDC made a deliberate decision not to do so. The primary reason is that 2024 was an extraordinary year — MRDC completed 106 audits within a single 12-month period, bringing the accounts of MRDC and all its managed entities up to date. This required significant expenditure on top-tier accounting and audit firms, enhanced internal audit-readiness capacity, and increased financial management capability. Rather than burden landowner companies with these one-off costs, MRDC carried them — at its own expense, in the interests of its beneficiaries.

MRDC chose to absorb extraordinary audit costs rather than pass them to landowner companies. This is not financial weakness — it is fiduciary responsibility in action.

The 2024 accounts received an unqualified audit opinion — the fifth consecutive clean opinion covering 2020–2024. There are no material errors, no omissions, and no qualifications. In addition, the 2025 Accounts have now been completed again unqualified and to be presented to the shareholder.

  02   HUMAN CAPITAL — PROPORTIONATE, BENCHMARKED AND JUSTIFIED 

MRDC’s personnel costs of PGK 29.3 million — including superannuation and all employee benefits — have attracted commentary. The framing of these costs as excessive fundamentally misrepresents what MRDC is and what it does.

MRDC is not an ordinary corporate entity operating in a single industry. It is a multi-sector investment management company with mandated responsibility across resource extraction, oil, gas and minerals, aviation, hospitality, health, financial services, power generation and community infrastructure projects. It must maintain professional capability across all of these simultaneously.

MRDC’s human capital costs are regularly benchmarked against PNG and regional market rates by independent specialists including Hays and People Connections. These benchmarks confirm that MRDC’s remuneration is fair, reasonable and consistent with the complexity of its operations and the seniority of the roles required.

PGK 29.3 million in personnel costs is 0.2% of the PGK14.5b of Asset Under Management. By any regional or domestic investment management standard, this is low.

The personnel cost ratio looks high against MRDC’s revenue — not because the costs are excessive, but because MRDC’s management fees are deliberately set below market rates based on each entities ability to pay. MRDC does not extract maximum fees from the companies it manages. It charges what is necessary — consistent with its mandate to manage landowner interests, not to profit from them. A comparison with PNG superfunds and regional investment managers managing comparable portfolios would show MRDC’s cost base to be among the lowest in the region based on the asset portfolio.

  03   MRDC AS INVESTMENT MANAGER — BALANCE SHEET VS. ASSETS UNDER MANAGEMENT 

A critical distinction must be understood by all stakeholders: MRDC’s corporate balance sheet is entirely separate from the assets it holds under management on behalf of landowners.

PGK 14.5 billion in assets under management — wealth that belongs to project area landowners. MRDC mandate is to grow wealth for its beneficiaries rather than profits for itself.

What MRDC actually does for its 22 managed companies goes far beyond typical investment management:

• Prepares and coordinates audited financial accounts for all managed entities
• Conducts quarterly board meetings, governance oversight and compliance for each company
• Manages tax affairs, statutory reporting and regulatory obligations across the portfolio
• Facilitates and governs the distribution of landowner benefits — conducting awareness programmes, ensuring disciplined and transparent distribution processes, and responding to the concerns of landowners and beneficiaries
• Identifies, assesses and develops new investment opportunities — including SMPL/Hilton Port Moresby, Heritage Hotels in Kikori, Kerema, Kutubu and Tari, PNG Air, Hevehe Petroleum and Dirio Power.
• Between the years 2022 and 2024 MRDC subsidiaries delivered PGK45m in Community Infrastructure Trust programmes on behalf of beneficiaries, — building schools, aid posts and community facilities, and administering scholarship and other community development programmes
• Between the years 2022 and 2024 MRDC subsidiaries through their scholarships program has sent in excess of 8,400 students to tertiary and technical schools costing almost PGK50m.

MRDC is not a passive fund manager clipping a fee. It is the full-service management backbone of Papua New Guinea’s most important landowner wealth structure — and it does this at a fraction of what any comparable private-sector manager would charge.