PM’S ILLEGAL UBS-OIL SEARCH SCAM COSTS PNG A BILLION KINA
Prime Minister Peter O’Neill’s illegal and
corrupt deal with UBS to buy 10 percent of Oil Search is now a full-scale
disaster.
It is threatening the viability of the 2016
Budget and could further undermine Government finances, which are already at
crisis point.
The State’s 150 million shares were bought
in March 2014 for $8.20 each.
That is a total $A1.2 billion, or about K3
billion at the exchange rate early that month.
A few days later, on 14 March 2014, the
Prime Minister boasted that the country had already made a profit on the shares
of $A75 million (about K170 million).
Today, the losses on the purchase are
stupendous.
Those 159 million shares were worth
slightly less than $A5.70 today.
That is a loss of $A400 million. At today’s
exchange rate that is about K850 million.
Peter O’Neill, Peter Botton of Oil Search
and UBS have cost Papua New Guineans almost a billion kina.
Worse still, the disastrous slide in the
value of Oil Search shares may cost Papua New Guinea even more.
To finance the purchase of the shares, the
State borrowed $1.2 billion (K3 billion) from UBS in Australia.
The security for the loan is the Oil Search
shares.
When the value of a security falls below a
set point, it is common for big banks to make what is known as a margin call.
Margin calls are when the holder of a
security that is falling in value calls on the borrower to pay cash to maintain
an equivalent.
Or the lender can call on the borrower to
sell certain assets, such as the shares, or other assets that the borrower has
agreed to form part of the security arrangements.
The value of margin calls could easily run
into many millions of kina, putting even more pressure on Government finances,
which are already at the point of collapse because of the Prime Minister’s corruption,
waste and mismanagement.
SO THE PRIME MINISTER MUST COME CLEAN.
HE MUST TELL THE PEOPLE OF PAPUA NEW GUINEA
WHETHER UBS CAN MAKE MARGIN CALLS ON THE STATE UNDER THE TERMS OF THE LOAN, THE
DETAILS OF ANY MARGIN CALL ARRANGEMENTS, AND THE TOTAL OF ANY MARGIN CALLS MADE
TO DATE.