The Papua New Guinea government will be seeking damages from Swiss bankers UBS, who are alleged to have overcharged PNG AU$175 million.
A Commission of Inquiry investigated the UBS structured AU$1.3 billion financing arrangement that was for buying shares in Oil Search. The bank ended up making millions while the PNG government lost up to AU$600 million.
According to the Commission of Inquiry the loan was pushed through against Cabinet advice and not put before the PNG parliament until after it was in place.
PNG Prime Minister James Marape said he planned to bring in a team of investigators, including Transparency International, to study the findings and decide who should face criminal charges.
The Commission of Inquiry recommended former Prime Minister Peter O’Neill be prosecuted for giving false information to it.
It also recommended that he be referred to the Independent Commission against Corruption and the Leadership Tribunal.
In response, Mr O’Neill has said he was ready to face any action against him and said the moves were politically motivated.
The commission’s 576-page report was presented to members of parliament last Wednesday. The findings are the culmination of an investigation that lasted almost three years and cost the government AU$12 million.
The report also stated that UBS and law-firm Norton Rose Fulbright Australia did not cooperate with the inquiry. It was recommended that the firms be banned from acting for state related entities for ten and five years respectively.
In response, UBS said it refuted the AU$175 million figure.
The deal which was brokered by the Sydney-based consultants of the Zurich-based investment bank, led to a net loss of AU$600 million for the PNG government.
UBS reportedly profited around AU$115 million in fees, interest and trading revenue from the deal.