Australian branch of UBS faces 10 year ban from PNG

9:32 am on 21 April 2022

The Australian branch of UBS could be banned from Papua New Guinea for up to 10 years over a controversial loan.

Bloomberg reports this is over the bank's role in organising the loan of about $US1.2 billion to the PNG Government in 2014.

A branch of UBS

A branch of UBS Photo: Supplied: Wikipedia

This loan, to buy shares in oil and gas company, Oil Search, has been the subject of a royal commission.

The deal, brokered by the Sydney-based consultants of the Zurich-based investment bank, led to a net loss of $US432 million for the PNG Government.

UBS reportedly profited around $US83 million in fees, interest and trading revenue from the deal.

The commission of inquiry has been told the loan was pushed through against cabinet advice and not put before the PNG parliament until after it was in place.

Lawyers assisting the commission have recommended the Swiss bank's Australian unit, law firm Norton Rose and certain individuals involved in the transaction be banned from conducting business in PNG for up to 10 years.

A final submissions report also recommends UBS be asked to repay the money it overcharged the PNG government, which would be $175 million plus interest, according to evidence in the royal commission.

And it said the commission should refer UBS to the Australian Securities and Investments Commission to consider whether action should be taken against current or former staff.

The report said this referral relates to UBS' excessive overcharging, misleading and deceptive conduct and failure to have adequate arrangements in place to manage its conflicts of interest.