BSP, partners ordered not to touch MVIL shares

National, Normal

The National, Monday, June 6th 2011

THE Independent Public Business Corporation has won a National Court order stopping Bank South Pacific and Kina Finance Ltd stockbrokers from doing anything with the 530,105,000 ordinary shares belonging to Motor Vehicles Insurance Ltd (MVIL).
The corporation, in its substantive court proceedings (WS No. 1252 of 2010), said ministerial approval had not been not sought and received involving K100 million transaction that allegedly took place between MVIL (first defendant) and the Nominees Niugini Ltd (NNL) as second defendant.
Last Wednesday, Justice Don Sawong granted the order following an urgent application hearing brought before it by the corporation lawyer, Posman Kua Aisi.
Making his ruling, Sawong said: “The defendants – Kina Security Ltd, BSP Capital Ltd, Bank South Pacific Ltd and NasFund Ltd and or by their agents servants or employees – are restrained from dealing with MVIL’s 530,105,000 ordinary shares owned by it in the capital of BSP Ltd and any other shares owned by it (MVIL) in any manner until the determination of this proceeding.” 
The court set the next hearing for Friday when all parties concerned are expected to be heard.
Sawong’s orders noted the affidavit statement made by (corporation boss) Glen Blake on June 1 and another by a Philip John Wright sworn on May 31, in support of the exparte application for the interim injunction the corporation sought.
The substantive matter involves the corporation versus MVIL as first defendant and NNL as second defendant. The matter involves BSP and its entities and the Kina Finance Ltd, which deals in stock broking.
The corporation is a major shareholder in MVIL, the third party motor vehicle insurer.
NNL is a financier and nominee company.
The corporation is claiming that on or about July 24, 2009, MVIL entered into an equity monetisation contract with NNL in which the financier purportedly agreed to lend to MVIL K100 million against the underlying security of the BSP shares.
The corporation claims laws were not followed when the K100 million transaction took place.
In filed court documents, the corporation said: “Pursuant to section 46B of the act, a majority state-owned enterprise (as is MVIL) shall not, except with the approval of the minister referred to in section 61 of the Public Finances (Management) Act 1997 and on the recommendation of the managing director of the corporation, enter into any contract involving the payment or receipt of an amount, or of property to a value (or both) exceeding K1 million.
“Despite the requirements under section 46B of the Act, no such recommendation was made and no such approval was given in respect of the above transaction or any aspect thereof.”