PAC LNG did not declare assets worth US$900mil: Koim

COMMISSIONER GENERAL of the Internal Revenue Commission Sam Koim has told a Commission of Inquiry into the Union Bank of Switzerland (UBS) K3 billion loan that the PAC LNG did not declare assets worth US$900 million (about K3.16 billion).
He said earlier that the PAC LNG group of companies had a total aggregate interest of 22.835 per cent in the Papua LNG (PRL15).
The group is made up of PAC LNG Investments Ltd, PAC LNG International Ltd, PAC LNG Holdings Ltd, PAC LNG Overseas Ltd and PAC LNG Assets Ltd.
All the companies are registered with the Internal Revenue Commission and have a tax identification number (TIN).
Koim said from the returns submitted for 2011, 2012, 2013, and 2014, “it appears that the total assets declared in each of the returns are significantly lower”.
“Their declarations only disclosed the mining information bit but not the land-rich assets worth US$825 million (about K2.89 billion),” he said.
“In the 2013 corporate income tax declarations, they claimed that their aggregate assets immediately before selling to Oil Search were around K65.9 million.
“They declared that they had K65.9 million assets, but disposed them off at a whopping US$900 million.
“It may mean that they may not have declared or under-declared their asset value to the Internal Revenue Commission, which we will be pursuing.”
Koim said as in every contract, “you give up something of value in exchange for something of value”.
“Did the State give up its ownership of the subsurface resource in PRL?” he said.
“If so, what did the State get in return?
“If the State had given up its ownership rights to the intrinsic value of the land-rich asset, then PAC LNG failed to declare it.
“It cannot be equity participation because it is simply a right to participate but not a stake in itself.”