THE Royal Commission of Inquiry has commenced its first stage of hearing into matters concerning the government’s obtaining of the UBS loan of Aus$1.2 billion (K3.2 billion) including the loan of Aus$1.6 billion (K4.3 billion) obtained from the International Petroleum Investment Company (IPIC).
The first stage of hearing was basically the presentation of evidence received from a number of witnesses on the introduction phase of the inquiry.
Chief commissioner of the Royal Commission of Inquiry, Sir Salamo Injia who spoke during the hearing on the 30th of March said that both loans involve the government’s decision to make direct investments in a private company.
“With regards to the IPIC loan, the government obtained the loan to purchase shares in the PNG LNG Project, using the issuance of Exchangeable Bonds in respect of the State’s 196.6 million shares in Oil Search to secure the loan.
“With regards to the UBS loan, the purpose of the loan was to purchase 149,390, 244 shares on a 10.01% stake in Oil Search and to meet the associated expenses.
The Commissioner further stated that it would be necessary to trace the source of the government’s existing shares in Oil Search, the subject of the exchangable bonds used to secure the IPIC loan.
“From information that is available, it appears, the existing Oil Search shares came from the merger in 2002 of Oil Search and other company by the name of Orogen Minerals Ltd, a wholly State-owned company, that was formed as a vehicle company to drive the government’s investments in the mineral and oil industry,” the commissioner said.
Meanwhile, the commission of inquiry has recently announced an update roadmap for the future conduct and prompt completion of the inquiry.
In a media statement released on Tuesday, the commission states that the month of April and May will be spent analysisng documents, concluding phase 1 of the hearings, and preparing for oral hearings of phases 2 and 3 which respectively concerns the 2009 IPIC transactions and the UBS/Oil Search transactions in 2014 and 2016.
The three phases of the hearing include:
- Phase one, the commission will consider the governmen’s policies and strategies on its involvement in the private business enterprises since Independence.
- Phase two involves an examination of the IPIC loan. Questions to be addressed include: What, if anything went wrong with the IPIC loan? Did the government incur a loss of its shares in Oil Search?
- Phase three deals with the main subject of the inquiry. The questions set out in the terms of reference adequately cover an investigation into all aspects of the loan transaction and matters related to or incidental to those questions.
Senior counsel assisting the commission, Dr James Renwick in his opening statements into phase one of the hearing on March 30, has made a call to the whistle blowers and others who wish to give evidence to come forward and make contact with the inquiry secretariat.
Hearing of oral evidence for phases two and three will take palce on June 8 to 11 and on the 15 to 18th June. The hearing will further be heared on July 20 to 23 and on the 27 to 30th July respectively.
The commission has assured the public that it will deliver its report as soon as practicable after the hearing is concluded.