UBS Investigated for Tax Fraud and Money Laundering- PNG DEAL IN HOTWATER


The Swiss Bank behind Prime Minister Peter ONeill’s’s illegal and corrupt loan to buy 10% of Oil Search is facing new allegations of money-laundering and financial fraud.

UBS is being investigated over money laundering and serious organised tax fraud in Belgium.
A statement from prosecutors said: "The Swiss bank is suspected of having directly, and not via its Belgian subsidiary, approached Belgian clients to convince them to set up constructions aimed at evading taxes."

UBS said it would "defend itself against any unfounded allegations".
The prosecutors' statement said the judicial investigation came after "excellent" help from French authorities, who had been looking at allegations that UBS had been encouraging clients to open accounts in Switzerland to avoid tax between the years 2004-12.

The US has also been looking into whether the bank allowed its US customers to hide their wealth from the Internal Revenue Service (IRS) to avoid paying full tax.
In 2014, Belgian police carried out raids both at the bank and at the homes of UBS Belgium chief executive Marcel Bruehwiler and a client.

Mr Bruehwiler was also charged at the time.

UBS denied that its Belgian division had ever supported tax evasion. UBS is facing new financial fraud allegations in the US after it paid $US780m in 2009 to settle a separate Justice Department tax-evasion probe. More recently one of its traders.

UBS has made hundreds of millions of kina out of the Oil Search loan, personally arranged by the Prime Minister and the Oil Search MD, Mr Peter Botten. The refinancing of the loan earlier this month cost Papua New Guinea almost K1.5 billion in losses and penalty payments.

According to leaks from the PM’s Department and the banks, led by UBS, that have made millions from the deal, the refinancing is for a total of about $A1 billion (K2.10 billion). But only about $600 million (K1.26 billion) has gone towards the refinancing itself. 
The balance of about $400 million (K840 million) is a PENALTY - payable to UBS and its agents - imposed on the PNG Government for not being able to settle the original deal by the due date. 
Under the original sweetheart deal, personally arranged by the Prime Minister and Oil Search CEO Peter Botten, the State’s 150 million shares were bought in March 2014 for $8.20 each. At the time the deal was agreed to, on or about February 13 Oil Search shares were worth $6.65. So the State has also lost about $232.5 million (K488 million) on the shares themselves. 
There is a further foreign exchange loss of K143 million, so the total kina loss is about K631 million. When the K631 million losses are added to the PENALTY, the total cost to Papua New Guinea is K1.47 billion. The only people to benefit out of this illegal and corrupt deal are the Prime Minister and his cronies, UBS and Oil Search. Ordinary Papua New Guineas have been left to bear the burden of their greed.

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