6 May 2010 - THE Independent Public Business Corporation (IPBC) has sold one-fifth of its shareholding in Bank South Pacific (BSP) to the International Finance Corporation at a below market value. The sale at this time represents a loss of K12.7 million.
This was revealed by the Opposition Leader Sir Mekere Morauta in Parliament during question time yesterday.
His questions were prepared for the Minister for Public Enterprise Arthur Somare but forwarded to the Deputy Prime Minister Sir Puka Temu since the Minister was absent from the chambers.
Sir Puka said he would advise Mr Somare to present a more comprehensive report of the IPBC's decision on the floor of Parliament.
Sir Mekere said as reported to the Port Moresby Stock Exchange, IPBC sold these shares at 63 toea when the current market price was 69 toea and questioned why it was necessary to sell BSP shares in such a hurry at lower than the market price.
"If the Minister wanted to sell BSP shares, it could have been sold a year ago when the price was at K1.30 - it even hit K1.40 in 2008. Had it been sold before at K1.30, IPBC would have received K275 million, not K133 million - more than double the current deal," Sir Mekere said.
He told Parliament that the sale by IPBC at lower than market price had the potential to bring down the market price, wiping thousands of kina off the value of investments in BSP shares held by many small Papua New Guinea investors.
Sir Mekere said the sale of shares just 17 days before BSP's Annual General Meeting (AGM) scheduled for May 21, did not seem to be a good time due to loss of dividend entitlements to IPBC, which should be a sizeable amount.
"I hear that IPBC is strapped for cash. Is it broke, like many of the animals in its cage including Telikom, bemobile, Post PNG and Air Niugini.
"And if IPBC is strapped for cash what confidence could anyone have in IPBC's management capacity and investment knowledge to hold PNG's 19 per cent share in PNG LNG (Kroton), Oil Search, BSP and in the other animals I just mentioned...this country should be very worried."
Sir Mekere also asked why IPBC was operating in an office in Brisbane on Level 19 of the Brisbane Club Towers, 241 Adelaide Street and whether it was to get around the labour laws, so foreigners could be employed without work permits.
He asked whether it was for the convenience of the absentee CEO and asked Mr Somare to justify the existence of this office and how much it was costing the people of Papua New Guinea - the total cost, rental, running costs and staff.
PNG Post Courier per Simon Eroro 05-06-10
