Reference no: EM132236124

National Provident Fund (“NPF”) wanted to go into the copra oil milling business. It identified Bialla, Papua New Guinea, as the right place to set up that business. It did not, however, have the land required for the business. It therefore entered into a joint venture business with the local landowners through their landowner company, Ambusa Limited. This saw the incorporation of Ambusa Copra Oil Mill Limited (“Ambusa”) which was a joint venture company with NPF having 50% of the shares which was fully paid. The other 50% of the shares were owned by the landowners in exchange for their land. The majority of the board of directors of Ambusa came from NPF. The two landowner representatives attended only the first ever meeting of the board. It is claimed that they are illiterate and do not understand the business. NPF entered into negotiations with Odata Limited (“Odata”) to construct the mill at a cost of $100M. Mr. Mekere, of the NPF, was the man who conducted the negotiations and signed the contract with Odata in his capacity as executive director of Ambusa, which was a position he held because of his employment with the NPF. Even though this was being done for Ambusa, all communications were done on NPF letterheads. NPF subsequently decided to terminate the joint venture due to claimed, but unproved, deficiencies in the purchase agreement. Can Odata hold NPF liable for the monies owed by Ambusa? Please advise.