By Oyintari Ben
In light of evidence from Papua New Guinea, Australia, and Singapore, the police in Papua New Guinea announced on Thursday that they were issuing arrest warrants in relation to a disastrous A$1.2 billion ($766 million) loan from Swiss bank UBS (UBSG.S) to the state in 2014.
The Pacific Islands nation, which is resource-rich but underdeveloped, has a past administration that used a loan to make a disastrous investment in an oil firm. In 2019, Prime Minister James Marape announced the investigation.
When the agreement was made, Marape served as finance minister in the Peter O’Neill administration.
In a statement, police commissioner David Manning announced that certain people would be detained and warned of the possibility of protests by supporters.
Without naming specific suspects, he added, “The charges intended to be laid have come about following extensive investigations and the analysis of evidence from Papua New Guinea, Singapore, and Australia over almost 18 months.”
In March 2022, a commission of inquiry report was delivered. O’Neill, now a legislator for an opposition party, claimed in June that he had been accused of perjury for his testimony to the committee, which he vehemently rejected.
Manning claimed that the offenses had cost the people of Papua New Guinea significant sums of public money and would be defined in accordance with the criminal code and the proceeds of crime act.
The government-sponsored investigation examined the manner in which a UBS loan was utilized in 2014 to purchase a 10% interest in PNG-focused oil and gas producer Oil Search Ltd. That made it possible for the company to purchase a stake in Elk-Antelope, the largest untapped gas resource in the nation.
The government purchased the interest just before the oil market collapsed and Oil Search’s shares dropped. To pay off the debt, the cash-strapped nation had to renew the loan and surrender the shares to the banks negotiating it.
At the time, UBS, which handled the loan through its Australian headquarters, had welcomed the investigation and stated that the PNG ombudsman’s report had not found any evidence against the bank.