PNG will soon be feeling the effect of Oil Search Price Slump, State Spent K3 Billion, has lost K300 Million in recent Months, Ratings Forcast "gloomy"
The Prime Minister’s illegal USB-Oil Search deal, which he has so proudly boasted was a great deal for the people of PNG, is now in ruins, confirming predictions of economic and financial disaster because of his reckless disregard for the Constitution and the welfare of the nation.
Just who will suffer the consequences of the Prime Minister’s contempt for the people and for the laws of Papua New Guinea? Not Peter O’Neill. While he is lining his pockets and living the high life with property, bank accounts and other assets in Australia and elsewhere overseas, the people are suffering. Prices are rising to intolerable levels for the basic necessities of life, unemployment is rising, the 2015 Budget is already collapsing and the value of the kina continues to fall. People get poorer and poorer every day while politicians, konmen and cronies get richer and fatter.
The Prime Minister’s illegal and financially irresponsible secret arrangements with USB and Oil Search have now cost Papua New Guinea in excess of K500 million, and the cost is rising by the day. The reason is that the Oil Search share price of $7.29 at close of business today (Monday) was 91 cents lower than the $8.20 the State paid for them less than 12 months ago.
The State illegally bought 10% of Oil Search, or 150 million shares, under the K3 billion USB kon deal. Analysts estimate that as well as the huge paper loss on the shares, a similar amount will have been eaten up in interest costs, fees, charges, commissions and so on. All up, therefore, the losses so far will amount to between $200 million and $300 million, or about K500 million. This is money that should have been spent on health and education and the delivery of other essential services and infrastructure. The only people to benefit are Oil Search, USB and the unknown kon men who took secret cuts along the way.
Today the share price of Oil Search closed at $7.29 - and worse news is expected in coming days. For the information of the Prime Minister’s puppet media - the 100% corrupt National and the 100% corrupt Post-Courier - losses were $75 million on Friday and a further $87 million today (Monday). That's $162 million - or K350 million - in two days!!!
Analysts are tipping more bad news: the company’s “sell” rating was reissued by analysts at Citigroup Inc. in a research report issued on Thursday. Analysts at Morgan Stanley reiterated an “overweight” rating on Oil Search in a research note on November 12th. Two equities research analysts have also issued the stock with a sell rating.
The stench of corruption surrounding this illegal deal is the reason the Prime Minister is facing a Leadership Tribunal, which is set to begin early next year. Public Prosecutor Pondros Kaluwin said he had found sufficient and credible evidence to refer the matter for a Tribunal to investigate. Mr Kaluwin said his request for the Tribunal was based on Ombudsman Commission evidence that Mr O'Neil failed to comply with administrative and financial processes including the normal overseas borrowing process in the approval of the UBS loan. There was further evidence that the purchase of the shares was in the interest of Oil Search and not in the interest of the country or the people.
The Constitution absolutely and unarguably requires State loans as well as taxes to be approved by Parliament. The illegal UBS loan, which was overseen and arranged personally by the Prime Minister before he took it to National Executive Council, had no such approval when it was implemented, and the Prime Minister further defied the Ombudsman Commission when it called for all direct and indirect payments to be halted until it completed its investigation.
It is not only the illegal involvement of the Prime Minister that has attracted the interest of the Ombudsman Commission - both Oil Search and UBS are believed to have been questioned during the investigation, and other authorities in PNG and overseas, possibly including Interpol, have looked at the illegal deal in their investigations into international money-laundering.
Legal experts are now raising the possibility that if the Prime Minister is found guilty by the Leadership Tribunal, he may be held personally liable for the costs and losses incurred by the State, including share trading losses. If the State does pursue Mr O’Neill over its costs and any losses incurred, there are international precedents, for example the case of the former Nigerian President Sani Abacha, which indicate that Mr O’Neill’s assets and property in PNG, Australia and elsewhere may be seized as being part of the proceeds of crime. It is equally possible that Oil Search and UBS executives and the companies themselves may be similarly prosecuted, as well as others involved.
The first lesson for Papua New Guinea is that when an individual, especially one in a position of great power, abuses tried and tested processes and abuses the law, disaster is sure to follow. The unfortunate fact for all of PNG now is that the inevitable has happened and that law-abiding, honest citizens will be the ones to suffer now and into the future. But for the time being at least the Prime Minister can avoid the consequences of his illegal and immoral actions by continuing to use his office to spin his web of lies and deception and wrongfully spend millions of taxpayers’ funds on parasite lawyers and other kon men cronies.
The second lesson is that by acting as puppets and failing to insist on robust and well-informed NEC debate, Cabinet Ministers are equally to blame for the financial disaster that the illegal UBS deal has heaped on the long-suffering people of PNG. If Ministers had taken their Constitutional duties and responsibilities seriously, rather than acting as greedy Prime Ministerial sycophants, this disaster would not have happened. The current Cabinet has deserted the people of PNG because of their silence, as have ordinary MPs almost without exception.
Likewise other important sections of PNG society. While TI and NRI have made some noise, theirs are lonely voices. Parts of the business community, in particular companies run by the Prime Minister’s cronies which have lined up to profit from corruption, plus the obvious case of Oil Search, are complicit in and beneficiaries of official corruption. Other sections of business and commerce are complicit as urgers and supporters of the Prime Minister’s economic and financial recklessness, or by their deafening silence.
The media is also complicit, especially the National and the Post-Courier and to a similar extent radio and EMTV. Other sections of the media such as the NBC and Kundu 2, have been bullied and threatened into submission. There has been virtually no attempt whatsoever to investigate or otherwise treat seriously the many publicly available examples of official corruption within the O’Neill Government and within State-Owned Enterprises and Authorities.
Very well-informed media sources over the years have confirmed that successive Governments have been able to strike immoral deals with the powers that be at the Post-Courier, the National and EMTV, and with individual journalists though blatant cash for comment and other forms of bribery. There is also evidence that sections of the judiciary and other parts of the legal system are likewise compromised, along with parts of the the RPNGC and the Defence Force.
The illegal UBS-Oil search deal directly touches on many of these issues. In the face of corrupt and spineless politicians, corrupt and spineless members of the business community, and corrupt and spineless mainstream media, the investigations by the Ombudsman Commission and the future investigations by the Leadership Tribunal take on momentous importance. It’s now or never for PNG, because no one else will stand up for what is right and good.
