LORENGAU – One of the men accused of beating an Iranian asylum seeker to death on Manus Island is walking free despite not being granted bail.

Salvation Army worker Joshua Kaluvia and security guard Louie Efi were arrested and charged with the murder of Reza Barati.

The attack happened inside the Australian-run immigration detention centre on Manus Island when guards and other staff attacked asylum seekers in February last year.

Kuluvia was arrested after a five-month manhunt and is awaiting trial.

However a source on Manus Island said the suspect had been seen walking free in the capital Lorengau.

“He was walking around Lorengau – he was very relaxed,” one source told the ABC.

Separately, Manus Island MP Ronnie Knight told Australian Associated Press that Kuluvia was out of prison and in the community.

Officials on the island said the court had not granted bail to the suspects.

“Both of them are remanded, there’s no-one granted bail,” said a court official, speaking on condition of anonymity because they do not have authority to speak to the media.

The murder case has twice been delayed because of a lack of legal representation for one of the suspects.

Manus Island’s police chief confirmed the suspects should be locked up.

“The two guys are remanded and are not allowed bail,” said provincial police commander Alex N’dranou.

“After the recent court hearing they’ve been moved back to the lock up and they are still there, waiting for the September hearing,” he said.

The provincial police boss dismissed the reports of the two suspects roaming free as “speculation”.

However, the ABC understands that in the past inmates at the provincial prison sometimes left detention during the day and returned to their cells at night.

In January, when some asylum seekers were detained without charge at the Manus Island police station cells for protesting, the ABC witnessed several of them walking in and out of large holes in the fence.

While security may be lax, Manus Island is a remote island province, located 800 kilometres from PNG’s capital Port Moresby.

The immigration detention centre on the island is part of Australia’s policy of processing asylum claims offshore to discourage dangerous boat journeys to the Australian mainland.

Several dozen asylum seekers on Manus Island have been granted refugee status but none have been resettled permanently in PNG.

A further 1000 male asylum seekers remain in immigration detention on the island.