KCH shares in BSP reach K1bil

THE value of the Kumul Consolidated Holdings (KCH) shares in the Bank South Pacific Financial Group Ltd (BSP) increased from K69 million in 2002 to almost K1.1 billion now, according to BSP.
BSP chief executive office Robin Fleming told The National that the bank had been paying dividends to KCH over a 20-year period totalling K1 billion.
On the privatisation of the State-owned enterprises, Fleming said April would mark the 20th anniversary of the privatisation of the PNG Banking Corporation and its amalgamation with BSP.
He said that privatisation exercise was very successful.
“Announcements by Government regarding privatisation of Telikom is a positive step towards a broader policy of privatisation of state-owned entities,” Fleming said.
“The Government via Kumul Consolidated Holdings retained 25 per cent shareholding in BSP, which has since been wound back to 18.6 per cent, and other government entities such as MVIL retained shareholding in BSP, with superannuation funds also taking up equity interest.
“Over and above this a profitable BSP has paid company tax of over K2.7 billion during a 20-year period, with BSP contributing over 17 per cent of the total company tax collected by IRC annually.
“This illustrates that with effective governance via an independent and professional board, and with competent management, a privatised entity can contribute significantly to government revenues by way of tax paid, dividends on profits and increased value of shares.”
Fleming said privatisation of State-owned entities in a structured manner would relieve Government of the burden of provision of capital to replace aging infrastructure, buy new infrastructure to support the expansion of service delivery, and investments in new technology.