PNG sacked Treasurer Don Polye explained why he refused to sign K3b loan deal

By Issac Nicholas
Post-Courier,  20th March 2014

Hon Don Polye, MP

FORMER Treasury Minister Don Polye has finally broken his silence on why he refused to sign loan instruments of AUS$ 1.239 (K3 billion) loan to acquire 10.1 percent share in Oil Search.

The Kandep MP said with the best business and commerce knowledge he had, his view was that the commercial viability of the purchase of Oil Search Ltd shares at $A8.20 is a bad decision.

He said even if it is claimed to be a good investment there remains no credible information to substantiate the argument as no due diligence was done on the business transaction.

Mr Polye also called on Attorney-General Kerenga Kua to say whether he gave advice to the Government leading up to "various breaches of the laws" to secure the $A1.22 billion loan.

"We have to borrow money if we do in such amounts have got to be spent on tangible benefits to the people of this nation, but not on some speculative markets like buying shares.

"When I looked into this I as former treasurer, I simply could not sign a loan when I knew that those were the dynamics within which this loan will not be supported by any balance sheets, whether it be by SOEs (State-owned enterprises) or even by the State," he said.

Oil Search Ltd also came under scrutiny over what he claimed was "insider trading" by the company. "I would also like to mention here that Oil Search they did an announcement of PNG government supporting them in buying a 10.01 percent.

"Two weeks earlier on February 27, a media release overseas and in PNG that the PNG government bought 10.1 percent share in Oil Search.
"How could a company go out and announce a government decision when that was not done? That’s insider trading and that’s not right."

But Oil Search last night strongly refuted the assertion by Mr Polye that it was involved in "insider trading" with respect to the recently completed placement of Oil Search shares to the State.

On February 27 the company announced to the market both the proposed acquisition of licence interests in the Elk/Antelope gas resource and the intention to finance the acquisition by a share placement to the Government.

The company’s announcement made it very clear that the Government share placement was conditional on the Government obtaining the necessary approvals to proceed with the placement and finalising financing arrangements to pay for the shares.

In fact the company also announced it had secured alternative funding should the Government not be able to proceed with the share purchase within the deadline set by the Elk/Antelope acquisition terms.