UBS loan inquiry extended

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THE Government has extended the Royal Commission of Inquiry into the Union Bank of Switzerland (UBS) loan into next year and added more items for the inquiry.
Listed in the latest gazette for the commission are the Orogen Minerals merger with Oil Search in 2002, the PNG LNG Project and the loan to secure State equity participation, the purchase and sale of Oil Search shares and the Elk/Antelope Petroleum Retention License (PRL-15) deal.
A Government statement said: “For the Orogen Minerals merger, the commission is to look into whether there were alternative transactions considered, and if so, why they were rejected.
“What the impact of the merger had on Oil Search and how this in turn affected the relationship with successive governments.
“With regards to the PNG LNG project, how the State financed its equity participation in the project, whether due and proper legal processes were followed to obtain the IPIC loan in 2009 and how and why IPIC was selected, including the terms of the loan,” the statement said.
“Of the four additional stipulations added for the royal commission, the theme of enquiry questions the rationale as to how and why these deals or projects were carried out the way they were and how this had directly or indirectly affected the State.
“For instance, what was the rational as to why Kumul Petroleum Holdings Ltd sold the Oil Search shares in 2017, why the State decided to use the UBS loan to purchase shares in Oil Search and who stood to gain the most from these transactions.
“With these added terms of reference, the Government looks to take a stance on more accountability looking back at pre-existing natural resource ventures and with state-owned enterprises.”
The changes were gazetted on Nov 5, with amended terms of reference for the commission with the additions and the final report to be presented on March 31, next year, to Prime Minister James Marape.
As a result to the additions, the Government decided to extend the period of the Royal Commission of Inquiry into the UBS loan.
The statement said the extension decision, made on Oct 12, to obtain an off-shore loan from UBS had become controversial following the tabling of the Ombudsman Commission investigation report in Parliament in May 2019.
The objective of the inquiry was to find out why the Government (at the time) decided to obtain the loan of US$1.3 billion (about K3 billion), the parties involved and whether or not these individuals breached mandatory constitutional requirements. The next steps of the commission will be made shortly, the statement said, but according to the amended terms, the commission will look into previous deals, loans and projects carried out in the interest of the State.