PNG to bring criminal charges over $A1.2b UBS loan

Papua New Guinea's police are obtaining arrest warrants over an ill-fated $A1.2 billion loan to the state from Swiss bank UBS in 2014, after seeing evidence from PNG, Australia and Singapore.

Prime Minister James Marape announced in 2019 an investigation into the loan that was used by a previous government in the resource-rich but underdeveloped Pacific Islands nation for a disastrous investment in an oil company.

Marape was finance minister at the time of the deal in the government of former Prime Minister Peter O'Neill.

Police commissioner David Manning said in a statement that some individuals would be arrested and warned of the potential for public disturbance by supporter groups.

"The charges intended to be laid have come about following exhaustive investigations and the analysis of evidence from Papua New Guinea, Singapore and Australia over almost 18 months," he said, without giving further details of suspects.

A commission of inquiry report was handed over in March 2022. O'Neill, now an opposition MP, said in June he had been charged with perjury over his evidence to the inquiry, which he denied.

Manning said the offences would be laid out under the criminal code and proceeds of crime act, and had deprived PNG citizens of large amounts of public funds.

The government-backed inquiry looked into how the UBS loan was used to buy a 10 per cent stake in PNG-focused oil and gas producer Oil Search Ltd in 2014. That helped the firm pay for a holding in the country’s biggest undeveloped gas field, Elk-Antelope.

The government bought the stake just before oil prices crashed and Oil Search’s shares fell. Hit by the commodities slump, the cash-strapped country had to refinance the loan and eventually had to extinguish the debt by giving up the shares to the banks that arranged the loan.

UBS, which handled the loan through its Australian offices, had welcomed the inquiry at the time and said a report by PNG’s ombudsman made no findings against the bank.

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