No need to get loan: Polye

By BOURA GORUKILA
THE Royal Commission of Inquiry into the Union Bank of Switzerland (UBS) loan has been told that there was no need for the Government to obtain the K3 billion loan to buy shares in Oil Search.
Kandep MP and former Treasurer Don Pomb Polye said the Cabinet paper did not have any due diligence report of any State-owned enterprise board decision.
He said the ministerial economic committee in particular charged with the responsibility of scrutinising and vetting Cabinet papers was avoided.
“As Treasurer then, I confirmed during a meeting dated March 6, 2014, that I was not informed of the Cabinet paper,” he said.
“The Department of Treasury had not been informed on processing the paper earlier.
“Other systems of governance had been avoided along with the National Executive Council’s own ministerial committee system.
“I did highlight in the discussion of my position that the acquisition of 10.01 per cent of Oil Search shares at AU$1.239 billion (K3.251 billion) was a gamble in a speculative market, hence was not prudent.
“The reasons being that the collar loan is securitised against the 10.01 per cent Oil Search share which means that in the event the State is unable to repay the loan through national budgetary allocations, the UBS will sell their shares and recoup the amount of AU$904 million (K2.372 billion) and that the bridge loan is the additional loan securitised against the NPCP LNG cash flow outside the Sovereign Wealth Fund and the parliamentary budgetary process,” Polye said.