Act used to legitimatise loan

A CONSULTANT has told the Commission of Inquiry (COI) into the Union Bank of Switzerland (UBS) K3 billion loan deal that the Loans Overseas Borrowings Act 2 (2) was the vehicle used to legitimate the UBS transaction.
Jimmy Maladina, who was the consultant and lawyer with Pacific Legal Group (PLG) when the UBS transaction was being handled by PLG, made that known to the COI hearing yesterday.
PLG was the local legal adviser to Norton Rose Lawyers of Sydney.
“I was with the transaction team, (PLG, Norton Rose, Ashurst Lawyers and UBS) when there were disagreements over whether parliament should approve this (UBS) loan or not and it came down to section 209 of the Constitution,” he said.
“When section 209 was brought up, I believed that the whole transaction was not going to take place because it prevents such loans as the UBS loan, however, the transaction team, including UBS, Norton Rose, Ashurst said we should use the Loans Overseas Borrowings Act.
“And that opinion was dropped in Port Moresby with PLG. The only opinion I had was, that’s enough we can use that but we have to give it to government lawyers to vet it and if they approve going down that track then we can go down that track.
“When the government lawyers came back – State Solicitor Daniel Rolpagarea – he gave clearance that the Loans Overseas Borrowings Act can be used as a vehicle to legitimate the UBS transaction.
“The loan was cleared by the State Solicitor who is the government pinnacle lawyer, in that his office is independent, no man can influence his office, so when he gave his advice, I thought that clears the way for the transaction to proceed.”
When Maladina was asked if he was paid K1 mllion in April 2014 according to evidence last week by lawyer Emmanuel Asigau who is a partner of PLG, he said: “Yes.”
He admitted to being paid the money for getting the legal work ready for the UBS loan agreement and having introduced Norton Rose.
He also admitted that Treasury paid PLG K1.6 million as legal fees, of which he was paid K1 million.
“When K1.6 million was paid to PLG, I rendered my bills to PLG dating back to Sept 30, 2013, up until April 2014,” he said. Maladina will return to the COI tomorrow.