K3bn loan on hold

 By HELEN REI

THE Ombudsman Commission has directed the State to freeze the processing of the K3 billion loan from the UBS Investment Bank “to ensure compliance with relevant laws and guidelines”.

Chief Ombudsman Rigo Lua said the intention was “not to impede any (Government) development initiative” but to “protect the preserve the integrity of leaders”.

The K3b loan to buy a stake in Oil Search Ltd was signed by Prime Minister Peter O’Neill in his capacity as acting Treasury Minister on March 11. He had sacked Treasurer Don Poyle the previous day for refusing to sign the loan documents.

Lua said in a statement yesterday the commission based its decision on Section 27 (4) of the Constitution to direct O’Neill and the National Executive Council “to stop all further transactions on the loan arrangements”.

He urged O’Neill and Cabinet “not to obstruct the commission and to cooperate to the best of your ability” in its investigation conducted under the Leadership Code and the Organic Law on the duties and responsibilities of leaderships.

Lua warned that anyone failing to comply with the directive “will be guilty of misconduct in office and liable to prosecution before a leadership tribunal and subject to penalties including dismissal from office”.

In a letter dated March 17 to Public Enterprises and State Investment Minister Ben Micah, Lua directed the State to “stop further loan arrangements with UBS nominees and their agents in PNG and abroad until investigations are completed and the commission is satisfied with compliance to justify the loan”. 

The letter was signed by Lua and Ombudsman Phoebe Sangetari.

“The first purpose of the commission is to ensure all Government bodies are responsive to the needs and aspirations of the people,” the letter said.  “The commission’s concerns are for the best interests of the people for whom and by whom the State is and for the compliance aspect of this magnitude of loan commitment by the State.”