”Watchdog group Transparency International Papua New Guinea says it will keep an eye on PNG Prime Minister James Marape over the inquiry into the Union Bank of Switzerland US$1.2 billion loan, RNZ has reported.
The broadcaster reported that chairman Peter Aitsi said Mr Marape, then finance minister when the deal was done in 2014, had instigated the inquiry.
“We will be watching him very carefully in terms of how he honours that commitment, as and when the commission of inquiry is concluded and any resulting action coming out of the recommendations made by the commission,” Mr Aitsi said.
According to the report, the commission of inquiry was told that the loan was pushed through against cabinet advice and not put before parliament until after it was in place.
Mr Aitsi said the group was concerned since many of the people involved in the UBS deal were those that set up the investigation.
The deal, broked by Sydney-based consultants of the Zurich-based investment bank UBS, led to a net loss of US$432 million.
UBS reportedly profited around US$83 million in fees, interest and trading revenue from the deal.
The prime minister at the time, Peter O’Neill, who had driven the deal through, told the inquiry earlier this month that parliamentary approval wasn’t required.
He told the inquiry on June 17 that “in my recollection, Parliament has never sat for every specific loan approval or transaction”.
“It does not require special sessions as and when transactions of Government are being made. Parliament approved through the budgetary process.
“As I said in 2014, I am certain that the budget papers took into noting this transaction taking place.
“I can assure you that every minister and treasurer expressed their views in respect to this submission in Cabinet.
“Officials took charge of the negotiations, Cabinet considered those submissions on March 6. Transactions were completed on March 12.
“I certainly did not hear concerns from anyone else. Nothing was said before the transaction took place,” Mr O’Neill said.
Meanwhile, PNG Treasury Secretary Mr Dairi Vele said the Central Bank had recommended the UBS re-finance an exchangeable bond, according to reports from The National on Monday.
Governor of Bank of PNG Loi Bakani had written to UBS regarding the re-financing of the International Petroleum Investment Company (IPIC) loan and advised that PNG accepted its proposal to re-finance the IPIC exchangeable bond by a rollover collar and term loan.