OC’s UBS loan report tabled in Parliament

THE Ombudsman Commission report into the controversial UBS loan was yesterday tabled in Parliament and Prime Minister James Marape called for a Commission of Inquiry into it.
The 179-page report and additional attachments of more than 100 pages was earlier leaked to the public during recent political manoeuvring. It was signed off by Ombudsmen Michael Dick, Richard Pagen and Kevin Kepore.
The report stated that the conduct of the then Minister for Finance James Marape was wrong and improper when he approved the payment direction deed for National Petroleum Company PNG when it was not properly established.
The report also found that the then prime minister Peter O’Neill’s conduct was wrong and improper when he committed the State to purchase 149, 390, 244 shares in Oil Search Limited without proper approval from the NEC.
It was found that he also failed to present the government’s proposal on the borrowing of the loan in Parliament for debate and approval as required by the Constitution.
In finding three, O’Neill was wrong in personally sponsoring and submitting NEC policy submission No 67/2014 to mislead the NEC to approving the borrowing of A$1.239 billion from UBS (Australia branch) to buy Oil Search Limited shares and the prime minister (O’Neill) also failed to consult Petromin Holding Ltd to be the State’s subscriber and nominee to acquire shares in OSL, the report said.
The report found that the existence of the National Petroleum Company of PNG (NPCP) was questionable as it was not legally established as the proposed PNG Petroleum Company (Kroton) Act and had not been rectified by the governor-general in order to fully come into force at that time.
It was also found that there was a conflict of interest situation in regard to Frank Krammer, the chairman for the NPC of PNG board, when he as director and shareholder of Pacific Capital Ltd, a company engaged by Dairi Vele to provide financial consultancy services to the State, for the borrowing of the loan.
It was also found the conduct of Chief Secretary Isaac Lupari was wrong and improper when he advised the Independent Public Business Corporation managing director of the NEC decision No 79/2014 for the State to acquire the shares.
Secretary for Treasury Dairi Vele was also found to have acted illegally when he engaged UBS as the sole financial adviser and lead arranger in relation to the management of the investment of the State in Oil Search Ltd without NEC approval, for misleading the NEC regarding the NEC policy submission 67/2014 that it was in order and for issuing such directives and instructions to the Independent Public Business Corporation chairman and management.
Vele’s conduct was also found illegal when he requested Central Supply and Tenders Board for a Certificate of Inexpediency to be issued for the engagement of consultants and that it should have been applied retrospectively which was contrary to the Public (Management) Act 1995 and the Finance Management Manual.
He was involved in requesting that the attorney-general be left out briefly from legal services to engage private law firms.
Others who have been implicated are Philip Eludeme, the chairman of Central Tenders and Supply Board, Loi Bakani, the Governor of the Bank of PNG for failing to independently provide due diligence check in the process of selecting financiers for the IPC Exchangeable Bond buy-back and advice against the UBS appointment as the leader of the loan.
The Secretary for Finance Dr Ken Ngangan was also implicated, as well as Carl Okuk.
The report recommended that Peter O’Neill, James Marape, Isaac Lupari, Daire Vele, Philip Eludeme and Wapu Sonk be all referred to the leadership tribunal and Okuk to be referred to the PNG Law Society to be investigated.