O’NEILL IS LYING ABOUT THE UBS LOAN.THIS CORRUPT LOAN IS A NATIONAL SCANDAL OF HIGHEST MAGNITUDE.

By:REGINALD HAUREVA- Kokoda

On Wednesday 19th March 2014 the Prime Minister Peter O’Neill took out a full page advertisement in the Post Courier stating that his unilateral decision to borrow AUD$1.2 Billion from UBS Bank to purchase 10. 1% shares in the public company Oil Search Limited (“OSL”) was the... “Best decision for Papua New Guinea”. He sought to explain the circumstances surrounding the availability of finance (intended for the IPIC share buyback) leading to the decision to buy more OSL shares.

The Prime Minister also made the following points in the Press Release:

1. There is presently a dispute with IPIC (the Dubai Lenders for the previous loan secured by Arthur Somare to finance State’s equity in the PNG LNG project) that could potentially cost the State upward of USD70 Million, relating to the buy-back valuation differential on the underlying value of OSL and its current trading share price.

2.  He is aware that “our people want their government to hold shares in Oil Search, one of our largest investor and employer...this was bound to affect investor and business confidence in the
country (if the State didn’t buy the shares).

3. The Value of shares is likely to double over the next few years.

4. The 10.1% share purchase was to “have the full benefit of “our resources at every opportunity.

5. O’Neill was aware of OSL interest to purchase Interoil shares and took advantage of the situation,

6. O’Neill knew OSL would go to the market to raise finance to purchase shares in Interoil so with the availability of the UBS loan, he took advantage of it.

7. NEC with advice from Bank of PNG, Dept. of Treasury, IPBC, approved the loan.

8. The NEC Decision is Final and cannot be undermined.

9. This loan does not add to or increase our overall national debt as the IPIC Loan was $1.6 Billion, this UBS loan is only $1.2 Billion, and the State is housing this off balance sheet by vesting it with Petromin.

10. We have achieved the impossible, and have become a major player in oil and gas.

The Prime Minister is once again telling lies to the people of PNG, just as he did when he denied approving the Paraka pay-out. He has obviously misled the NEC, MPs, the business community and Papua New Guinea citizens. This is a matter of national importance. The fact that the PM is lying and is seeking to pool the wool over our eyes makes it a national scandal of highest magnitude.
In a sense it is not so bad to lie to those who are literate and can read between the lines, or those who may know what is really going on. (At least they can laugh at him). But what about the poor
gullible public who trust what comes out of a Prime Minister’s mouth? What about the 80% of the population living in rural areas, or those who are illiterate, who trust the office of Prime Minister? To lie to them and mislead them is like stealing from the blind.

The Prime Minister, of a country such as ours, owes a special obligation to the 80% of our people to speak the truth. It is a breach of the most sacred trust, as that between a child and a parent, or
the blind and the guide, to even slightly detour from the whole truth. It is clear to us observers that this Prime Minister does not have the ability to speak the truth and be truthful.

Sadly, he has been telling us untruths upon untruths, plying layer upon layer of deception. In his published Press Statement he is clearly talking and sounding like someone trying to justify himself. His untruths have severed that sacred trust between his office and the nation. He has caused us to doubt him and publicly ask questions about his personal character judgement and integrity once again since the NPF saga. In a sense he has forced it upon us to make a value judgement on his essential character. We find in such press statements there is no truth in him. “ Em giaman man”.

The fact that we are even asking these questions of his personal character and nature means he is no longer fit to be Prime Minister. Most of you have read Dr Patrick Onguglo’s Article in the PNG Blogs. I have too. This article, whilst is attendant with minor discrepancies of fact, has triggered an avalanche of protest that should be noted by the Prime Minister. I find that article and the dynamics of the relationships mentioned with OSL and Interoil personalities, and the supposed kickbacks paid to the Prime Minister to be credible. The Least the Prime Minister could do is publicly deny it. He
has not denied, nor has he contradicted it which now cements his place as the most corrupt and dishonest PM.

Against the PM’s Press Statement, Dr Onguglo’s Statement stands unchallenged; particularly as it relates to personal benefit by the PM and his associates from this loan. In fact the PM’s Statement
of the basic facts is as Dr Onguglo first broke the story, except the PM is silent on his benefit, what the fees and commissions are, and who received it. An interesting fact that lends further credibility to Dr Onguglo is that, and I am aware, upon Oil Search and the PM agreeing to terms in a secret meeting at Airways on 14th March 2014, the PM was so happy and over the moon, that in an orgasmic moment he ordered the Government owned Kumul Falcon Jet fly Mr Peter Botten the CEO of OSL Free of Charge to Sydney where he would have missed another engagement but for the
PM’s kind gesture.

[Pardon the slight detour but the Falcon Kumul Jet is not certified to do Commercial Charters or Fly persons other than State Ministers or the Prime Minister. The Pilots are not certified to Fly Oil Search executives or other commercial clients around.] What the Prime Minister did was highly illegal. The Pilots responsible were forced to fly the aircraft against their will and against the PNGCASA regulations and the Insurance requirements.

This, if anything, clearly demonstrates what State of mind the Peter O’Neill was in on or around the 14^th March 2014, when he also took the decision to move Senior State Ministers aside for not approving the $1.2 Billion Loan. The Prime Minister was clearly excited, and energized by something, and his hand was clearly willed against those who stood in the way of this deal. It is clear that the PM did not sit down with his senior Ministers and reasoned with them, or heard their side of the
story concerning their fears about the loan. He didn’t bother to consult Duma or Polye.

O’Neill was operating at another level and on another cloud. Something else was consuming him, and driving him. In this sense I am more inclined to believe Dr Onguglo’s poignant assessment and observations of massive corruption. It would have been incentive enough for the PM to unceremoniously dump senior Ministers and assume the positions himself rather than reason with them.

The manner O’Neill is explaining this loan tends to make him look like a liar and begs more questions than answered. Let us deal with the points he raised in his Press Statement:

1. I must make the point that Peter O’Neill is now seeking to shroud the “approval” of the loan as being something independently done by the Central Bank, The Treasury Department, and IPBC, which is not true. The proper and responsible officers of these relevant government agencies were not aware of the full terms until the very last minute. None of these government agencies I have spoken to know the full terms of the loan saw any loan documents or did any independent analysis.
It was forced upon them in the last minute. It was the same with the State Solicitor. The State Solicitor was forced to give an advice that did not make it mandatory for the State to obtain prior
Parliamentary approvals.

So it is a complete lie by Peter O’Neill to say this loan was a “deliberate decision” of the State, and that it was taken after “independent advice” from these State agencies.  What “independent advice” is Peter  O’Neill talking about? If he can remove State Ministers for questioning the loan that he unilaterally imposed on the nation, what Central Bank Governor, Department Secretary or State Lawyer would want to stick his neck out and be a hero? Mr O’Neill must think this country is made of stupid people. Whatever these officers did was out of fear for losing their jobs, not out of love and duty to their nation, and because it is the right thing to do.

2. In similar vein O’Neill says this was a NEC Decision to borrow the $1.2 Billion and NEC decision is final and cannot be questioned. “Yes Prime Minister”, pull the other one and he will hear jingle bells. What NEC is he talking about? The Ministers I have spoken to have all admitted they didn’t know anything about it until it was sprung on them by the PM. He introduced the subject and he had it moved it to be passed. They didn’t have the benefit of any in-depth analysis. No loan documents were tabled for them to read and appreciate the deal. It was just O’Neill talking and waving his
hands about. The so called Departmental advice from Treasury and Central Bank is useless without their Minister’s consent and approval. In his acting capacity as Acting Minister for Treasury, he did as it were, serve the ball in a volley ball match, ran around to the other side to receive and return his own serve, in NEC. He used Cabinet PNC numbers to move the approval, and the Ministers
from the other Party’s knew the PM was making money on the deal so didn’t want to get in the way, particularly as he did not create an atmosphere or allow for open debate.

As a critical example show us the Attorney General’s approval letter of advice. What was his advice?
And this is what O’Neill calls “NEC has approved it and its decision is final”? Who is he trying to fool?
It is clearly disingenuous and misleading of the public to give us the impression that NEC went through this loan proposal thoroughly and approved it. In this hypocritical charade O’Neill has made a mockery out of NEC and has undervalued its role. The NEC Decision is not genuine, and is really a fraud upon the nation. Peter O’Neill used NEC to rubberstamp a questionable loan- a loan that the nation did not need.

3. Peter O’Neill said he borrowed and spent $1.2 Billion is OSL shares because he believes the value of  OSL shares is likely to rise in the next few years. That is a big Statement. Peter O’Neill is admitting as Prime Minister of PNG, he was prepared to, and he took a gamble with the assets and the lives of people of his country. It is called speculative share trading.

Speculative share trading using the funds (whether borrowed or otherwise) or assets of the State is not allowed by the Public Finance Management Act, or the Constitution.
The Independent State of Papua New Guinea is not Peter O’Neill’s private company. What underlying investment analysis did he rely on to make this investment decision, and who were the analysts who provided this advice? He does not say so and I suspect there was none. This loan was purely driven by Peter O’Neill’s interests. The Prime Minister needs to disclose and make available to the public for the public to appreciate the assumptions and valuation parameters relied on for us to be convinced that the Prime Minister was motivated by the national interest, and not his own personal
greed.

If IPIC is disputing the underlying value of the OSL shares, discounting it by $70 Million, and is even prepared to go to Court over its analysis, what independent analysis did Daire Vele and the Central Bank Governor use to advise the PM, or is it the other way around, and they were told what to say?

4.  O’Neill made the sweeping statement “We are fully aware our people want their government to hold shares in Oil Search...” Ha ha ha Peter Peter Peter...so it’s THE PEOPLE WHO HAVE MADE YOU TO BORROW THE MONEY !!! What a low life you are Mr Prime Minister to blame the people for your own unilateral decision borne out of your own selfish greed! The people of PNG are honourable my dear Sir. But as for you, you stink!

What people is Peter O’Neill talking about? Where do they live? Is he talking about the Ialibu-Pangia people? What people in this country who have their basic needs in health, education, and
infrastructure taken care of so well, they living in the lap of luxury, such that they could afford to borrow $1.2 Billion to speculate on the stock market? Is Peter O’Neill living on the same planet and in the same country as us, or is he blind and so impervious to the condition of the people?

And just how did he become “aware” of the people’s burning desire to borrow money and buy Oil Search Shares? Did he conduct a nationwide awareness campaign and survey? Did the people appear to him in his dreams? Did the people send subliminal messages to him while he is having closed doors meetings with Interoil, Oil search and UBS executives? Or was it a simple process of osmosis from the water he drinks, he suddenly becomes “aware” of the people’s needs and desires?
The Prime Minister of PNG should not stop so low to incorporate the people to justify his corrupt activities. It is unbecoming of that office, and we the people are not altogether as stupid as he
thinks. It is the emperor who wears the invisible clothes, not the laughing and  jeering subjects.

5. The fact that O’Neill admits he was given specific and definite information that the Board of OSL was planning to purchase the Interoil Shares, that certain shareholders holding a large batch of shares in Interoil were selling their shares at highly inflated price, that OSL were planning to go to the market to raise debt to buy the shares, makes O’Neill looks like one of the players in the equation being privy to strategic and privileged corporate information. As Prime Minister, he has to explain how he came to be aware of such intimate Board information from two public companies. Under what circumstances did Peter O’Neill become aware of the respective intentions of two Boards of totally unrelated companies, concerning issues that are not within the regulatory purvey of the PNG Government?

This is beginning to make me believe there is more that O’Neill is not disclosing, that he is hiding his true role in this loan to help OSL purchase Interoil shares. If he is hiding his role, then he is also hiding his reward.

This raises three burning questions for all Papua New Guineans:

(a)          If the PM was so aware, why didn’t he buy the shares from Interoil directly?;

(b)          Why couldn’t the State wait to use the funds to fund the government’s share (22.5%) of  Capex on the Interoil’s Pac LNG?.

(c)           Why borrow now using State assets to fund Oil Search’s acquisition of strategic   interest in Interoil?

Unless, to protect Oil Search against unfriendly takeover, and for Interoil shareholders to receive greatly inflated share price?

These questions lend me to believe in the scenario forwarded as fact by Dr Onguglo that Peter
O’Neill is getting a handsome kick back from both Oilsearch and Interoil in the hundreds of Millions of Kina. This would make Peter O’Neill the most corrupt Prime Minister this country has ever seen, and would make even the founder of PNC Party, the late Sir William Skate, turn in his grave.

6.  The argument that this loan is not going to increase the total national debt, (the previous loan with IPIC was $1.6 Billion and the UBS loan is only $1.2 Billion), is an interesting one. It is also interesting to see the paper profit of K75 Million from lower placement price being used to justify the Share Purchase. Most people in the market know that naturally for such a huge capital injection to any public company the placement is usually at a discount. But to characterize this paper discount as a profit is absolutely laughable- when the shares have not been sold. This is not a cheap or good value loan as O’Neill wants us to believe. It is not something in which we won. Another massive debt from another loan with huge interest dues in the hundreds of millions pushing the national debt higher is not something to celebrate or brush aside as the PM is trying to do. The public debt has been increased as the very expensive Arthur Somare’s IPIC Loan was unnecessary. We could have taken an inter-government loan from a country like Japan (in consideration for Chiyoda being one of the main contractors to PNG LNG) for less than 1% interest. In Arthur’s youthful and inexperienced stupidity he failed to take this option for PNG. He exposed PNG unnecessarily to over 15% unnecessary interest, commissions and costs, and he made disappear in thin air 3 % of our 22.5% interest in the process. Only Arthur alone knows the deal behind the public deal disclosed to us, just like O’Neill alone knows about this unnecessary loan and public debt.

O’Neill has simply maintained this unnecessary debt level, instead of taking the opportunity to extinguish it. If O’Neill did not borrow from UBS, we would have no share related debt of US$1.2
Billion. We would have our 19% shares in PNG LNG totally unencumbered, and be prepared to enjoy our income stream from first export later this year. By mortgaging the PNG LNG Shares to UBS we will no longer enjoy the income stream. We will in fact be servicing huge debt and interest bill. Peter O’Neill says that is good? I don’t see it. Either the people of PNG are blind or they are stupid or he is hiding something.

Okay fair enough he buys 10.1% shares in OSL, but any dividend from OSL is subject to OSL share price and any OSL Board declaration of dividends. We parked 19% free unencumbered direct income stream
only to wait upon OSL Directors to make a decision on the level of dividends, if any, to pay us? WE EXCHANGED 19% UNENCUMBERED INCOME STREAM (from PNGLNG) FOR 10.1% DIVIDENDS FROM OSL, IF IT’S BOARD DECLARES A DIVIDEND! How stupid is Peter O’Neill? The fact is that he is not stupid. He knows what he is doing. His wheels must have been well greased and oiled to turn away, and disregard the best interests of the State and the people. O’Neill has been making so many decisions in the last 12 months to benefit his own interests. He has been cleverly cultivating the Australian government to buy their favour, so turn a blind eye to his money laundering and other shadowy activities. O’Neill also has a personal interest to take over the Ok Tedi Mine and Frieda Copper project for himself and his cohorts. That is why he took on PNG Sustainable and tore it to shreds. He didn’t do it for the people, or the Western Landowners, the environmentally affected people, or the best interests of PNG. No, he (being ably assisted by Israeli government unofficial representative, Dr Jacob Weiss), did it for a secondary deal which he and Dr Weiss have lingering in the wings. When it happens, he will make up another storyline, and feed us some more bullshit as he has done with this UBS loan.

He must think we are all stupid (and judging from the number of blind supporters he has, he could be right, at least in respect of them). Peter O’Neill being aware that the State has an existing obligation to fund its 22.5% share of the Capex (very soon) on the Interoil LNG Project in the magnitude of hundreds of Millions of Dollars. As such this unnecessary UBS loan has raised the national debt beyond unacceptable levels. The OSL share purchase of Interoil shares cost $900 Million. What happened to the balance of funds? Who got paid what fees and what commissions? Disclosure by the PM of these would begin to tell a story of its own.

OSL is a company that was almost bankrupt 15 years ago, until Trevor Kennedy, its former Chairman (of Alpine Offset fame), Pius Wingti and Norio Beangke got together and robbed the people of PNG by merging Orogen Minerals with OSL.

Trevor, Pius and Norio made their ill-gotten gains and sailed into the sunset, but the fact that they ransacked Orogen Minerals to rescue and resuscitate a failing OSL was never lost on keen observers. Sir Mekere was the PM who facilitated that day light robbery, and even KPMG the independent consultants openly certified that it was a very “unfair transaction”, in which the hungry cow devoured the fat cow. Orogen had USD70 Million cash and was valued at least 2 times more than OSL at that time that Trevor Kennedy and his mate Pius robbed the people. Norio facilitated Pius
and Mekere’s kick back. That’s how the State ended up with a meagre 18% shares in OSL when it should have owned the whole lot. At that time, OSL could have been taken over by the State and merged into Orogen for the value of its assets. The reason why that was not the case has to do with kickbacks to persons named. It’s now O’Neill’s turn to rob the State.

The fact that IPIC’s industry analysts have put OSL’s underlying valuation as a company at less than its current trading share price should come as a worry to O’Neill. They are confident enough to state it is valued at $70 Million less than the IPIC Loan. The fact that they are willing to go to court over this shows O’Neill is less than candid with the value of his OSl deal, and makes his paper profit look like papier-mâché. Borrowing more money to support OSL on top of the IPIC suit means the new loan is going to cost more than $1.2 Billion plus interest.

For now, the nation of PNG, (and the students of UNITECH) are finding out) O’Neill is very corrupt and he is a pretend Prime Minister. He is pretending to be Prime Minister while he steals from the people. He is not focussed on solving problems like Unitech. Instead he is busy making money for himself and his family. He can walk around in public and say lofty things and travel overseas and impress foreigners that he is someone, meet with foreign leaders and smile on camera, but we know he is a thief. ONCE A THIEF, ALWAYS A THIEF. The increase in the national debt affects, among others, poverty issues, encourages aid dependency, underdevelopment, disintegration of government services and overall development of the country.

There must be a public inquiry into this deal so that the truth must come out! Come on PNG, do you enjoy being fucked by your leaders? Where are the students and the Unions? Where are the National Haus Krai people? Where are the NGOs and activists? Where are our elected leaders?
Where is Kerenga Kua on this? Where is Powes Parkop? Where is Allan Marat? Where is Puka Temu? Where is Leo Dion? Where is John Momis? Where is Julius Chan? Where is the open clear leadership on this matter?

People, did we elect people like O’Neill to take advantage of us, tell us lies, and steal from us?

ED NOTE: The author of this article is not a Politician or MP.