LEAKED OMBUDSMAN COMMISSION REPORT ON THE 1.2 BILLION UBS LOAN
1995
1.
On 5 December, the Investment Promotion Authority
(IPA) registered Pacific Capital Ltd whose Shareholders also include Mr Frank
Michael Kramer.
2.
On 5 March, the Government of PNG (GoPNG) mortgaged
its shares in Oil Search Ltd with International Petroleum Investment Company
(IPIC), Abu Dhabi and acquired the needed funding and it financed the State‘s
share of the capital expenditure for the PNG LNG project.
3.
On 1 July, the IPA registered Pertusio Capital
Partners Ltd whose Shareholders also include Mr Dairi Vele.
2013
4.
On 25 June, Prime Minister Hon Peter O‘Neill, CMG,
MP (Prime Minister) advised Hon Kerenga Kua, MP, the then Attorney-General that
a Brief-Out on legal services should be publicly tendered.
5.
On 6 August, the National Executive Council (NEC)
appointed Mr Dairi Vele, as the Acting Secretary for the Department of Treasury (DoT).
6.
On 12 August, the DoT officials met with Union Bank
of Switzerland, Aktiengesellschaft, Australia Branch (UBS AG) officials at
Sydney, Australia.
7.
On 13 August, the DoT officials met with Morgan
Stanley officials in Sydney, Australia.
8.
On 14 August, the DoT officials met with JP Morgan
officials at Sydney, Australia.
9.
On 15 August, the DoT officials held a second
meeting with UBS AG officials at Sydney, Australia.
10.
On 16 August, the DoT officials met with Credit
Suisse officials at Sydney, Australia.
11.
On 19 December, the NEC during a Special Meeting No:
37/2013 in its Decision No: 479/2013 that the BPNG provide final evaluations on
the proposals from Citi Bank and UBS AG to re-finance the International
Petroleum Investment Company (IPIC) Exchangeable Bond.
12.
On 20 December, Hon Ben Micah, MP, Minister for
State Enterprises and State Investment (SE&SI) wrote to Mr Loi Bakani, CMG,
CBE, the Governor of Bank of Papua New Guinea (BPNG) and requested the BPNG to
evaluate the potential financiers‘ proposals to re-finance the IPIC
Exchangeable Bond.
13.
On 22 December, Mr Bakani advised Minister Micah
that the four financiers should have been provided all the information and
requested to bid for the Exchangeable Bond re- financing facility.
14.
On 27 December, Minister Micah requested Mr Bakani
for clarification on the BPNG‘s advice on the four proposals by Hemsley
Capital, ANZ/Barclay, CitiBank and UBS AG in regard to the refinancing of the
IPIC Exchangeable Bond.
2014
15.
On 7 January, Mr Bakani advised Minister Micah that
the State re-negotiate the funding structure of the proposals with the two
Financiers, the UBS AG and Citi Bank in the event that the negotiations do not
meet the State objectives, the State should consider othr Financiers.
16.
On 9 January, Mr Bakani forwarded the BPNG‘s
recommendations to Minister Micah as requested that included the invitation of
other potential Financiers apart from Citi Bank and UBS AG to re-finance the
IPIC Exchangeable Bond.
17.
On even date, Mr Bakani requested the Prime Minister
to allow the BPNG the mandate to assist the State in meeting the basic
re-financing requirements in the negotiation
process.
18.
On 14 January, Mr Wasantha Kumarasiri of Independent
Public Business Corporation (IPBC), requested Mr Bakani to correct his advice
to Minister Micah as it was incorrect and misleading when the actual amount
should be AU$1.681 Billion and not AU$1.8 Billion.
19.
On 15 January, Minister Micah wrote to Mr Bakani and
requested that the BPNG provide its final recommendations on the two Banks, UBS
AG and Citi Bank.
20.
On 16 January, Mr Bakani requested all parties
including the BPNG, Minister Micah, IPBC, and the DoT to draft the Terms of
Reference to be used during negotiations with potential Financiers.
21.
On 17 January, Mr Bakani wrote to and advised Mr
Kumarasiri that the BPNG‘s evaluations and recommendations were based on
information provided in accordance with the NEC Decision No: 479/2013 in its
Special Meeting No: 37/2013 that approved for BPNG to provide final evaluations
on the proposals from Citi and UBS AG to refinance the IPIC Exchangeable Bonds;
that Minister Micah advice the Government of United Arab Emirates the GoPNG‘s
decision to redeem the IPIC Exchangeable Bonds and directed Miniser Micah to
report back to NEC by end of January 2014 with the final evaluation report
provided by BPNG.
22.
On even date, Mr Bakani requested Ms Natalie
Yacoubian of Banque Nationale de Paris Paribas (BNP Paribas) to resubmit PNP
Paribas proposal incorporating the refined terms.
23.
On even date, Mr Bakani requested Mr Mitchell Turner
of UBS AG to resubmit UBS AG proposal
incorporating the refined terms.
24.
On even date, Mr Bakani requested Mr Philip Graham
to resubmit Citi Bank‘s proposal incorporating the refined terms.
25.
On even date, Minister Micah advised Mr Bakani that
he expected a recommendation by Wednesday 22 January 2014.
26.
On 23 January, Mr Bakani recommended to the NEC to
request the Abu Dhabi Government for an extension of six months, to allow time
to improve on the proposal by BNP Paribas, the superior proposal, as well as
the UBS AG, Citi Bank and ANZ/Barclays.
27.
On 27 January, Hon Don Polye, Minister for Treasury
wrote to Mr Bakani and requested for a full brief on the implementation of the
NEC‘s Decision No. 479/2013 regarding the re-
financing of IPIC Exchangeable Bond.
28.
On even date, after its inconclusive asseement of
the proposals from BNP Paribas, UBS AG, Citi Bank and ANZ/Barclays, Mr Bakani,
recommended the UBS AG to Minister Micah, for the refinancing of the IPIC
Exchangeable Bond.
29.
On 30 January, Mr Vele engaged UBS AG to act as the
sole Financial Advisor and Lead Arranger, in relation to the management of the
investment of the State in Oil Search Ltd by way of letter.
30.
Mr Bakani informed the Directors for Investment
Banking, UBS AG that the State had accepted its proposal to re-finance IPIC
Exchangeable Bond worth AU$1.7 Billion and that UBS AG to confirm in writing
its commitment to fund the AU$1.7 Billion IPIC Exchangeable Bond.
31.
On even date, Minister Micah noted Mr Bakani‘s recommendations
but he advised that the six months extension recommended would incur costs and
was not possible.
32.
On 3 February, Minister Micah informed Mr Frank
Kramer, Chairman for National Petroleum Company of PNG Ltd (NPCP) Board
regarding the Exchangeable Bond and the appointment of UBS AG. At that material
time, the Speaker of Parliament was yet to certifiy Kroton Act.
33.
On even date, Hon Minister Micah accepted the BPNG‘s
recommendations and the NPCP‘s lead to re-finance IPIC Exchangeable Bond
process on behalf of the Independent State of Papua New Guinea (State), even
though NPCP had no legal basi to conduct business for and on behalf of the
country and the government of PNG.
34.
On 4 February, the Prime Minister advised HH Sheik
Mansour bin Zayed Al Nahyan that the State wanted to retain its shares in Oil
Search Ltd.
35.
On 7 February, Mr Bakani re-assured Minister Micah
on its recommendation to use UBS AG to re-finance IPIC Exchangeable Bond.
36.
On 13 February, a Mandatory Exchange Notice to
Deutche Bank AG, London Branch (Exchange Agent) indicated that the IPIC did not
want to sell its shares to Government of Papua New Guinea (GoPNG).
37.
On even date, Mr John Leahy, Head of Business
Assurance & Asset Serving, National Nominees Limited, consented and became
a member of Oil Search Ltd and undertook trading of Shares on the Australian
Stock Exchange.
38.
On 23 February, the Prime Minister, Mr Peter Botten,
MD of Oil Search Ltd, Mr Gerea Aopi, Board Chairman for Oil Search Ltd and Mr
Vele met at Grand Papua Hotel and decided over
a cup of coffee for the State to buy 149, 390, 244 shares which translated
to 10.01
% shareholding in Oil Search Ltd.
39.
On 24 February, Hon Rimbink Pato, MP, Minister for
Foreign Affairs and Immigration (FAI) advised HH Sheikh Abdullah bin Zayed Al
Nahyan, the Minister for FAI, Abu Dhabi, United Arab Emirates, that the GoPNG
wanted to retain ownership of the Oil Search Ltd shares.
40.
On 25 February, UBS AG wrote to Mr Vele and outlined
the terms of engagement of UBS AG as the Sole Financial Advisor and Sole Lead
Arranger that was effected on 30 January 2014, in relation to the management of
the investment of the State in Oil Search Ltd and associated matters flowing
from the issuance in 2009 of Exchangeable Bond in respect of the State‘s 196.6
million shares in Oil Search Ltd to the IPIC of Abu Dhabi. This is done with a
conflict of interest.
41.
On even date, trading in Oil Search Ltd shares
halted ahead of its announcement issuing shares to existing shareholders and
interested buyers.
42.
On even date, His Excellency Grand Chief Sir Michael
Ogio, G.C.L, G.C.MG, K.St.J the Governor-General of Papua New Guinea (GGPNG)
signed the document agreements which were witnessed by Mr Carl Okuk as a
Commissioner for Oath witnessing the agreement on the terms and conditions of
engagement of UBS AG. The action of the GGPNG was improper and unconstitutional
as per Section 2(1) and 3(1) of the Loans (Overseas Borrowing) Act (Chapter 133).
43.
On 26 February, Prime Minister wrote to Mr Botten
regarding the State‘s willingness to buy shares in Oil Search Ltd.
44.
On 27 February, four days after the meeting, the
Prime Minister wrote to Mr Guy Fowler, the MD for UBS AG regarding UBS AG
proposal to provide funding facilities to the State in connection with the
subscription by the State for approximately 149.39 million shares in Oil Search
Ltd at AU$8.20 per share. (Refer to said dated letter). Facts relevant to this
query are set out in page 38
45.
On even date, the Subscription Agreement was signed
between UBS AG (the Equity Derivative Financier) and Oil Shares Limited.
46.
On even date, Oil Search Ltd shares trading were
suspended ahead of its announcement.
47.
On even date, Oil Search Ltd announced that it had
agreed to acquire a 22.835% gross interest in PRL 15 (Elk Antelope) from the
Pac LNG Group Companies for US$900 million to be funded through a placement of
new shares to the State.
48.
On even date, the UBS AG forwarded a Commitment
Letter that was signed by the GGPNG which was witnessed by Mr Okuk.
49.
On 4 March, Ashurst Lawyers forwarded draft
documents for its client UBS AG to the State that outlined the financial
package that UBS AG was offering the State.
50.
On even date, Mr David Heathcote of KPMG presented
KPMG‘s analysis on the monetised collars relating to financing the purchase of
Oil Search Ltd shares.
51.
On 5 March, Mr Fowler requested the Prime Minister
to intervene in resolving the IPIC Exchangeable Bond, PNG LNG direction-to-pay
and Sovereign Bond take-out of the Bridge Loan.
52.
On even date, Mr Vele requested Mr Daniel
Rolpagarea, the State Solicitor to give legal clearance on the documents
relating to the transaction for the State to acquire 149,390,244 shares in Oil
Search Ltd.
53.
On even date, Mr Rolpagarea requested Mr Vele to provide
to him details of confirmation and clear instructions on the engagement of
Pacific Legal Group Lawyers and the breach
of Section 209 of (Parliament Responsibility) of the Constitution by the NEC.
54.
On even date, NPCP Board Chairman submitted a proposal
to the IPBC Board advising of the State‘s acquisition of 149,390,244 shares in
Oil Search Ltd and that UBS AG required NPCP to enter into a payment direction
between NPCP, PNGLNG Global Company LDC (GloCo).
55.
On even date, Mr Rolpagarea advised Mr Vele that the
NEC Submission needed approvals from the relevant Agencies‘ Boards and the
Parliament for the Bridge and Collar loans totalling AU$1.239 Billion.
56.
On 6 March, the UBS AG issued a Bridge Takeout
Letter to Mr Vele that outlined the terms of the fees payable to UBS AG as
Facility Agent under the Bridge Facility Agreement that was signed by the GGPNG
and witnessed by Mr Okuk.
57.
On even date the UBS AG as the Facility Agent for
the loan wrote to Mr Vele and requested for the State to pay the Facility Agent
fees as per the Bridge Facility Agreement that was signed by the GGPNG and
witnessed by Mr Okuk.
58.
On even date, the UBS AG as the Security Trustee for
the loan wrote to Mr Vele and requested for the State to pay the Security
Trustee fees as per the Bridge Facility Agreement that was signed by the GGPNG
and witnessed by Mr Okuk.
59.
On even date, the Prime Minister submitted an NEC
Policy paper No: 67/2014 to the NEC.
60.
On even date, the NEC in its Decision No: 79/2014
appointed Petromin as the State‘s subscriber and nominee for the transaction,
confirmed the authority of the Treasurer, execute the Payment Direction Deed by
NPCP, approved the payment direction by IPBC, Central Supply Tender Board
(CSTB) to issue a Certificate of Inexpediency (COI) and Authority to Pre-Commit
(APC) to be executed by the Department of Finance (DoF).
61.
On even date, Mr Vele advised Minister Polye that
the loan would not affect the State‘s debt program and that Petromin was the
subscriber and nominee.
62.
On even date, Mr Vele requested Mr Philip Eludeme,
the Chairman for CSTB to approve the request for COI at the earliest to cover
the advisory costs.
63.
On even date, the Prime Minister advised the GGPNG,
that the NEC approved the borrowing of a loan for the purpose of purchasing
shares in Oil Search Ltd and for the purpose of meeting the expenses of the
borrowing itself.
64.
On even date, Mr Okuk representing Mr Vele delivered
28 documents pertaining to the UBS AG loan to Mr Rolpagarea for his legal clearance.
65.
On 7 March, Mr Vele explained to Mr Eludeme that the
COI was needed to access funds to pay for fees pertaining to the State‘s
acquisition of the shares in Oil Search Ltd.
66.
On even date, Mr Vele requested Mr Rolpagarea to
issue legal clearance on the submission regarding the State‘s borrowing of loan arrangements.
67.
On even date, the Prime Minister informed IPBC of
the government‘s decision to enter into the agreement.
68.
On even date, Ambassador (Amb) Isaac Lupari, the
Chief of Staff to the Prime Minister, advised Mr Kumarasiri that the NEC
approved the State‘s intent to borrow from UBS AG to fund its acquisition of
shares in Oil Search Ltd.
69.
On even date, Minister Micah directed the Board of
IPBC to approve the Payment Direction Deed and to sign the Payment Direction
Deed on or before 09 March 2014.
70.
On 8 March, Mr Vele emailed to and requested Dr
Thomas Webster, the then Chairman for IPBC Board, to progress the documents to
the IPBC Board for its consideration and approval. The electronic mail included
electronic copies of documents that Mr Vele had prepared for the IPBC Board and
NPCP Board to endorse and approve. The attachments are as follows:
Memo with
explanation of Transaction and the Payment Direction Draft Payment Direction
Deed
Draft IPBC
Shareholder Resolution regarding Payment Direction Draft IPBC Director
Resolution regarding Payment Direction Draft NPCP Board resolution regarding
Payment Direction
Draft Power of
Attorney regarding Payment Direction.
71.
On even date, Mr Kumarasiri advised Dr Webster to
issue instructions to the management of IPBC Management to prepare documents in
anticipation to receive requests from the Board of NPCP with their resolutions.
72.
On 9 March, Mr Erastus Kamburi, the Chief Legal
Officer for IPBC, requested the IPBC Directors to meet and discuss on the
directives from the Minister Micah and Amb Isaac Lupari and the NEC Decision
No: 79/2014.
73.
On even date, an Explanatory Note was prepared with
the Board Circular Resolution outlining the purpose of the Special Board Meeting.
74.
On even date, the NPCP Special Board of Directors
Meeting No: 02/2014 resolved that the Company enter into any Transaction
Document to give effect to the Payment Direction Deed and authorised Mr Sonk
and Mr Wato with the Power of Attorney.
75.
On even date, the NPCP Board empowered Mr Sonk and Mr Rogen Wato, the Company Secretary for
NPCP with the Power of Attorney.
76.
On even date, Mr Sonk verified copies of the
Shareholder resolutions of the NPCP dated 09 March 2014, Minutes of a Meeting
of the Board of Directors and Power of Attorney of the NPCP.
77.
On even date, Mr Wapu R Sonk, Managing Director for
NPCP forwarded to Mr Kumarasiri an Extract of the Board Meeting Minutes.
78.
On even date, Mr Rolpagarea advised Mr Vele that the
Treasurer was the authorised person to execute loan agreements on behalf of the
State strictly in accordance with Section 209 (Parliament Responsibility) of
the Constitution.
79.
On even date, Norton Rose Fulbright wrote to the
GGPNG and the Minister for Treasury regarding financing of the acquisition of
the shares and possible options to re-finance following completion.
80.
On even date, Norton Rose Fulbright wrote to the
GGPNG outlining what documents needed to be signed in order for the State to
borrow AU$1.239 billion to purchase Oil Search Ltd shares.
81.
On even date, the GGPNG signed the document enabling
the State to borrow AU$335 million from UBS AG for the purpose of the purchase
of shares in Oil Search Ltd and for the purpose of meeting the expenses of the
Borrowing and for the services of the State.
82.
On even date, Mr Kumarasiri wrote to Hon James
Marape MP, Minister for Finance and requested him to approve the Memorandum of
Approval to enable NPCP to enter into the Transaction Documents.
83.
On even date, Minister Polye advised Mr Vele that he
will not sign the documents that enabled the State to borrow the said UBS AG loan.
84.
On even date, Minister Marape approved the
Memorandum of Approval that enabled NPCP to enter into the Transaction Documents.
85.
On 10 March, IPBC Board resolved that NPCP Directors
enter into the Transaction Documents and recommend to the Minister for Finance
to approve a proposal by NPCP to enter into Agreement to execute all documents
that gave effect to the Payment Direction Deed.
86.
On even date, the NPCP Board deliberated and
resolved and authorised Board to enter into Agreement to execute the
Transaction Documents.
87.
On even date, Mr Eludeme advised Mr Vele that the
CSTB resolved and approved the issuance of the COI for the awarding of
contracts to both local and international Consulting Firms.
88.
On even date, Mr Vele confirmed with Mr Rolpagarea
that the GGPNG and Minister for Treasury were to execute the transaction
documents to purchase Oil Search Ltd shares on behalf of the State.
89.
On even date, Mr Kumarasiri certified the Circular
Resolution of the Board of Directors of IPBC that authorised the execution of
the Payment Direction Deed by NPCP.
90.
On even date Mr Kumarasiri wrote a Memorandum of
Recommendation recommending Minister Marape to approve the NPCP to enter into
the Transaction Documents.
91.
On even date, the Prime Minister decommissioned Hon
Polye as the Minister for Treasury.
92.
On even date, Hon Polye accepted his decommissioning
as Minister for Treasury by the Prime Minister.
93.
On even date, the National Gazette No: G83 and G89
of 10 March 2014 confirmed the decommissioning and replacement of Hon Polye as
the Minister for Treasury by the Prime Minister.
94.
On even date, the Determination of titles and
responsibilities of the Prime Minister Hon Peter O‘Neill, MP also changed to
allow him to act as the Minister for Treasury that enabled him to sign the loan
contract agreements on the same date.
95.
On even date, Mr Vele requested Dr Ken Ngangan,
Acting Secretary for DoF to approve the payment to UBS AG in relation to the
acquisition of the shares.
96.
On even date, Mr Rolpagarea advised the GGPNG that
all documentations relating to the borrowing were in order and that Mr Vele was
satisfied with the Terms of the Transaction Documents.
97.
On even date, the State and Oil Search Ltd signed
and exerted the subscription Agreement.
98.
On even date, Mr Vele advised Mr Eludeme that the
local and international financial and legal Advisors should be paid for
services rendered.
99.
On even date, the DoT deposited K1,250,000.00 into
Pacific Capital Ltd Managed Account with ANZ bank (PNG) Ltd.
100. On even date, Hon
Don Polye, then Minister for Treasury was interviewed at the Ombudsman
Commission Office at Deloitte Tower, Port Moresby during which he stated that
it was during his term as Treasurer that the 2014 budget was compiled and
tabled in Parliament
101.
On 11 March, Mr Kamburi advised Mr Kumarasiri that
the Certificate did not include the Shareholder Resolution which was signed and
hence he sent an amended and verified Certificate for Mr Kumarasiri‘s signature.
102. On even date,
Minister Marape gave his approval for the NPCP to enter into Payment Direction Deed.
103.
On even date, Dr Ngangan and Mr Vele signed and
approved the APC form to release AU$14,555,759.00 to be paid to the Consultants
relating to the purchasing of Oil Search Ltd
shares.
104.
On 12 March, Mr Babaga R. Naime, Acting Board
Secretary for CSTB, advised Mr Rolpagarea that the CSTB awarded the Contract to
both local and International Consulting Firms.
105.
On even date, Mr Eludeme certified that the inviting
of tenders for the provision of financial, legal and technical advisory
services was impractical or inexpedient.
106.
On even date, Dr Ngangan approved the application
for the Department to complete and issue the APC for the above Procurement.
107.
On even date, the State, NPCP and UBS AG agreed to
the terms and conditions upon signing the Payment Direction Deed that directed
PNG Liquefied Gas Global Company (GloCo) to pay immediately available funds due
to NPCP to UBS AG as per the NEC Decision No: 79/2014, even though at that
material time the Kroton Act was yet
to be certified by the Speaker of Parliament.
108.
On even date, UBS AG confirmed with Mr Vele the
terms and conditions of the financing transaction that were entered into
between the State and UBS AG in respect of Oil Search Ltd shares.
109.
On even date, the Prime Minster, Mr Vele, UBS AG
(the Arranger), UBS AG (the Facility Agent) and UBS Nominees Pty Ltd signed the
Bridge Facility Agreement.
110.
On even date, the GGPNG witnessed by Mr Okuk signed
the Specific Security Deed (CHESS Securities - Collar) with UBS AG that
provided security to the loan acquisition.
111.
On even date, the GGPNG, witnessed by Mr Okuk signed
the Security Trust Deed with UBS Nominees Pty Ltd that provided security to the
loan acquisition.
112.
On even date, the GGPNG, witnessed by Mr Okuk signed
the Participant Sponsorship Agreement with UBS Nominees Pty Ltd.
113.
On even date, the Prime Minster, Mr Vele, UBS AG
(the Arranger), UBS AG (the Facility Agent) and UBS Nominees Pty Ltd signed the
Confirmation Side Letter.
114.
On even date, the GGPNG witnessed by Mr Okuk signed
the Nominee Deed with UBS AG, UBS Nominees Pty Ltd and UBS Securities Australia
for the Nominee (UBS Nominees Pty Ltd).
115.
On even date, the Substantial shareholders notice
prepared and lodged with Port Moresby Stock Exchange (POMSox) and ASX lodged on
17 March 2014.
116.
On even date, the State (Subscriber) represented by
the GGPNG witnessed by Mr Okuk signed the Subscription Agreement with Oil
Search Limited (Issuer).
117.
On even date, Mr Stephen Gardiner, the Chief
Financial Officer for Oil Search Ltd, advised that Goldman Sachs Financial
Markets Pty Ltd with a Bank Account number 011-112034- 041 was the recipient of
the Subscription.
118.
On even date, Oil Search Ltd announced completion of
share placement and file appendix 3B, Cleansing Notice and Completion Letter.
119.
On 14 March, the Substantial shareholder notice
prepared and lodged with POMSoX and ASX (lodged on 17 March 2014).
120. On even date, the Commission issued directives under Section 27(4) of the Constitution determined that it was
necessary to issue a direction under
Section 27(4) of the Constitution
to freeze all further progress on
the PGK3 Billion loan and requested
for collective cooperation from the Prime Minister; and the members of the NEC;
the Chief Secretary; the Minister for Treasury and the Minister for Finance; the Secretary,
DoF; and the Secretary, DoT; the Attorney-General; and the Secretary, DJAG; the Governor of BPNG; Petromin; and
IPBC; and Port Moresby Stock Exchange
Limited; and Oil Search (PNG)
Limited; and UBS Nominees Pty Ltd.
121.
On 15 March, the
Commission wrote to Mr Vele acknowledging receipt of his
letter dated 14 May 2014 and advised
that he will be advised on the Commission‘s
independence and proceedings under Section 217(5) and (6) of the Constitution.
122. On 20 March, Mr
Rolpagarea advised Mr Naime on his legal opinion on the request for the
issuance of Legal Clearance – CSTB COI 02/04 stating that the CoI shall only be
issued during Natural Disaster; or Defence Emergency; or Health Emergency; or
Civil Unrest and that the CoI cannot be applied retrospectively.
123. On 26 March,
during his interview with the Ombudsman Commission, Mr Rolpagarea stated that
he was not given enough time to thoroughly go through the documents and that he
was not present at the CSTB meeting that approved the issuance of the COI.
124. On 28 March, Mr
Eludeme advised Mr Vele that the State Solicitor declined the issuance of legal clearance.
125.
On even date, Mr Kumarasiri advised the Commission
that the IPBC gave its approval for NPCP to go ahead with the transaction and
referred the matter to the Minister for Finance to execute.
126.
On 31 March, Hon Kua, then Attorney-General was
interviewed at the Commission Office at Deloitte Tower, Port Moresby during
which he stated that he was never present at the NEC meeting that made the
decision to approve the borrowing, nor was he consulted on the matter.
127. On 3 April, Mr
Bakani was interviewed at the Commission Office at Deloitte Tower, Port Moresby
during which he stated that the BPNG was not involved in the second part of the
UBS AG loan in which the loan was obtained to purchase shares in Oil Search Ltd.
128. On 10 April, Mr
Eludeme advised Mr Vele that the Board effectively nullified the issuance of
the COI for the engagement of private Consultants.
129.
On 11 April, Mr Sonk directed Mr Peter Graham, MD
for GloCo to divert all distributions of payments payable to NPCP to be paid to
UBS AG (Singapore Branch).
130.
On even date, Mr Sonk and Mr Wato of NPCP directed
Mr Graham of Esso Highlands who was also the MD for GloCo to immediately pay
all available funds to UBS AG.
131.
On 22 April, Ashurst Lawyers advised Norton Rose
Fulbright of Australia that non- compliance with payment obligations would
constitute an Event of Default and UBS AG can commence enforcement processes
without further reference to the State.
132.
On 28 April, Hon Polye reiterated to Hon Theodore
Zurenuoc, the Speaker of Parliament, his position that the government‘s
borrowing UBS AG loan was bad.
133.
On 30 April, Hon Polye stated to the Commission that
the loan was an unplanned activity and it was not a prudent thing to do and it
breached the 2014 Budget Appropriation Bill and the Fiscal Responsibilities Act.
134. On even date, Ms
Tessa Hoser of Norton Rose Fulbright of Australia advised Mr Vele that in the
event of a default UBS AG would charge default interest on any unpaid interest.
135.
On 2 May, Hon Don Polye instituted proceedings in OS
142 of 2014 against the Hon Peter O‘Neill, Prime Minister, Hon Patrick Pruaitch
and the State.
136.
On even date, during his interview with the
Ombudsman Commission, Mr Vele stated that the State engaged UBS AG together
with the other financial and legal firms as they were already providing the services.
137.
On 8 May, the National Court (Salika, DCJ) OS 142 of
2014 ruled that Hon Polye‘s application be dismissed on the grounds of abuse of
process of the National Court rules.
138.
On 9 May, Mr Anthony Yauieb, Deputy Secretary for
DoT, stated to the Commission that the NEC Policy Submission on the UBS AG Loan
to purchase Oil Search Ltd shares was prepared outside by Mr Vele.
139. On 14 May, Mr
Vele advised the Commission that the State is required to make periodic
interest payments to UBS AG.
140.
On even date, Finance Forms number 3 & 4
(FF3& FF4) indicated AU$2,261,938.36 which is about K5,543,966.57 was paid
to UBS AG.
141.
On 15 May, Mr Luke Goldsworthy and Ms Celle Raguine,
Representatives of UBS AG pointed out to Mr Vele that failure to pay interest
breached clause 5.1(b) of the Agreement which states that all payments to be
made under the Commitment Documents shall be paid in the currency of the
invoice and immediately available, freely transferable cleared funds and shall
be paid without set-off or counterclaim or any deduction or withholding for or
on account of tax (a ―Tax Deduction‖) unless a Tax Deduction is required by law. If a Tax Deduction is required by law to be
made, the amount of the payment due shall be increased to an amount which
(after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction
has been required;‖
142. On even date, Mr
Vele requested clearance from Commission on the interest payment to UBS AG.
143.
On 16 May, Mr Vele instructed Mr Bakani to
immediately process and remit funds to the UBS
AG.
144.
On even date, Mr Vele advised Mr Bakani that
interest payment must be paid to UBS AG.
145.
On even date, Ms Betty Palaso, Commissioner-General
for Internal Revenue Commission (IRC) issued a Tax Clearance Certificate to the
DoT to transfer or remit moneys for the purpose of payment of interest on UBS
AG Loan.
146. On even date, a
copy of the Notification (transmission) of Original indicated that the BPNG
transferred AU$2,261,938.36 to the Reserved Bank of Australia.
147.
On 19 May, Hon Don Polye filed an application under
to Section 18(1) of the Constitution that
in SCCOS No. 1 of 2014 to be part of the Supreme Court proceedings relating to
the borrowing of the UBS AG loan.
148. On 23 May, the
Commission responded to Mr Vele‘s letter dated 15 May 2014 and advised that the
Commission‘s investigation into the UBS AG Loan was continuing and that Section
27(4) of the Constitution was still
in force and that it also applied to the interest payments to UBS AG.
149.
On 27 May, Dr Clement Waine, Acting Secretary,
Department of Public Enterprise (DoPE) explained that neither he nor his
Department were involved in the matter been investigated.
150.
On 3 June, Mr Kramer stated that NPCP was involved
in the execution of the Payment Direction Deed as per the IPBC Board request
and direction.
151.
On 5 June, Mr Vele wrote to the Commission and
stated that the Commission does not have the power to issue directives to stop
such interest payments. To fail to make the interest payments would simply not
be in the best interest of Papua New Guinea or its people.
152.
On even date, Mr Eludeme confirmed that CSTB
approved a request for application for COI by Mr Vele.
153. On 6 June, Mr
Vele as second Plaintiff and the Hon Peter O‘Neill, Prime Minister as First
Plaintiff filed proceedings in OS (JR) 383 of 2014 the National Court against
the Commission and the State seeking Courts powers under Section 18(2) of the Constitution to refer questions to the
Supreme Court on the Commission‘s power to issue Directions under Section 27(4)
of the Constitution and Section 23
and 27(5) of OLDRL.
154.
On 12 June, Dr Lawrence Kalinoe, Secretary for DJAG,
advised the Commission that neither he nor his Department was involved in the
UBS AG Loan transaction.
155. On 13 June, Hon
Kua categorically denied the allegations that he was personally involved in
giving clearance for the UBS AG loan and that he was not present in the NEC
Special Meeting No 37/2013 that approved the UBS AG loan.
156.
On 4 July, Mr Vele advised the Commission that the
UBS AG loan transaction was constitutional and had been lawfully undertaken by
the State and its related parties in every aspect including the decision made
over a cup of coffee at the Grand Papua Hotel by the Prime Minister, Mr Botten,
Mr Aopi and Mr Vele.
157.
On 7 July, Mr Ilagi Veali, MPS, Secretary to the NEC
forwarded copies of the NEC Special Meeting No: 08/2014 together with the list
of Cabinet Ministers who were present or absent at the Special Meeting.
158.
On 27 October, Pacific Legal Group Lawyers
representing the Hon Peter O‘Neill, Prime Minister and Mr Vele, mared the
proceedings in OS (JR) No. 383 of 2014 for the Court to refer certain questions
to the Supreme Court for interpretatin.
159.
On 3 December, the National Court granted the
application by the Hon Peter O‘Neill, Prime Minister and Mr Vele and referred
various questions to the Supreme Court for interpretation pursuant to Section
18(2) of the Constitution. The Court
also ordered that the proceedings in OS (JR) No. 383 of 2014 be stayed.
160.
On 8 December, the Ombudsman Commission issued the
Provisional Report to those implicated.
161.
On 11 December, copies of Provisional Reports were
delivered to Hon James Marape, Minister for Finance, Dr. Ken Ngangan, Acting
Secretary for DoF, Mr Dairi Vele, Acting Secretary DoT and Mr Loi Bakani,
Governor for Central Bank.
162. On 12 December,
copies of the Provisional Report were delivered to Hon Peter O‘Neill, Prime
Minister, Hon Ben Micah, Minister for State Enterprise and State Investments,
Mr Philip Eludeme, Chairman of CSTB and Amb Isaac Lupari, Prime Minister‘s
Chief of Staff.
163. On 16 December, a
copy of the Provisional Report was delivered to Mr Carl Okuk, legal consultant.
164.
On 22 December, Young & Williams Lawyers representing
the Prime Minister Hon Peter O‘Neill, MP responded to the Provisional Report,
refuting any wrong doing and that the Commission‘s investigations were fatally
flawed. The Prime Minister‘s Lawyers did not request for an extension of time
as required.
2015
165.
On 8 January, the National Court ruled pertaining to
OS No. 810 of 2014 that the Constitutional question be referred to the Supreme
Court and interim injunctions and a stay of proceedings on the leadership tribunal.
166.
On 22 January, Dr Ken Ngangan responded to the
Provisional Report.
167.
On 23 January, Mr Vele, Acting Secretary, DoT
responded to the Provisional Report.
168. On even date, Hon
Peter O‘Neill, Prime Minister made an application to the National Court seeking
referral of several questions for interpretation by the Supreme Court under
Section 18(2) of the Constitution.
169.
On 16 February, Mr Frank Kramer, Chairman, KPHL
responded to the Provisional Report.
170.
On 18 February, Mr Vele submitted his affidavit in
the matter SCR No.7 of 2014 relating to the Special Reference by Hon Ano Pala,
Minister for Justice & Attorney-General, MP before the Supreme Court.
171.
On 24 February, Mr Loi Bakani, Governor for Central
Bank responded to the Provisional Report.
172.
On 25 September, Young & Williams Lawyers
responded on behalf of Prime Minister Hon Peter O‘Neill, MP filed a schedule of
questions and proposed answers to questions in consolidated references pursuant
to Order made 11 August by the Bernard Sakora,
J.
173.
On even date, Young & Williams Lawyers
representing the Prime Minister Hon Peter O‘Neill, MP filed a Special Reference
7 of 2014 and SC References No. 1 and 2 of 2015 referring 13 Constitutional
questions to the Supreme Court to answer.
2016
174.
On 19 July, Justice Catherine Davani of the National
Court made reference to the Supreme Court under SCR No. 5 of 2016, eleven (11)
questions pertaining to whether the OC had the jurisdiction to investigate the
PM and whether or not the issuing of the OLOC Provisional Report ultra vires
the power of the Ombudsman Commission.
175.
On 28 July, Justice Catherine Davani submitted Facts
pertaining to the Supreme Court Reference SCR No. 5 of 2016.
176.
On 19 August, the Ombudsman Commission submitted an
Intervention to be part of the Supreme Court Reference SRC No. 5 of 2016.
177.
On even date, the Prime Minister Hon Peter O‘Neill,
MP submitted an Intervention to be part of the Supreme Court Reference SRC No.
5 of 2016.
178.
On 20 September, Hon Ano Pala, Attorney-General
submitted an Intervention to be part of the Supreme Court Reference SRC No. 5
of 2016.
179. On 26 September,
Hon Ano Pala, Attorney-General amended his statement of response and submitted
it as part of his Intervention to be part of the Supreme Court Reference SRC
No. 5 of 2016.
180.
On even date, the Prime Minister Hon Peter O‘Neill,
MP through his lawyers filed an injunction on the matter OS No. 15 of 2015 in
the National Court.
2017
181.
On 6 October, the Supreme Court dismissed the
Supreme Court Reference SCR No. 5 of 2016 made by Justice Catherine Davani and
returned the matter to the National Court.
182. On 15 November,
the Supreme Court conclusively determined that the Office of the Prime Minister
does fall within the OLOC functions of the Commission. There was therefore no
utility in the current proceedings. Therefore, the court dismissed the entire proceedings
with costs and
discharged any injunction that may have been issued against the Commission on
this matter.
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