25 Mar 2014

PNG Ombudsman puts halt on government loan deal

8:13 am on 25 March 2014

Papua New Guinea's Ombudsman Commission has blocked a move by the government to take up a massive loan to buy back the state's shares in PNG's largest oil and gas company.

The Prime Minister, Peter O'Neill, had looked to take out a US$1.2 billion loan with Swiss bank UBS to buy back the government's shares in the company, Oil Search.

The former treasurer, Don Polye, was sacked by the government last week over his opposition to the loan.

Our correspondent in PNG, Todagia Kelola, says the commission has used its special powers to stop the loan because it has concerns with the way in which the loan was taken out.

"Everything is frozen until the Ombudsman Commission does its investigation and checks if the leaders that have made this loan followed all the procedures and processes of the law."

Our correspondent in PNG, Todagia Kelola.