ZURICH - UBS Group AG, Switzerland's largest bank, has commented on the K4 billion loan granted to Papua New Guinea that contributed to political upheaval still resonating today.
The multinational investment bank and financial services company has a presence in all major financial centres has issued a brief statement outlining its view of the case.
Five years ago, UBS granted a loan worth US$1.2 billion (K4 billion) to PNG, which used the money to buy a stake in petroleum company Oil Search.
The deal went wrong as the oil price fell, forcing the PNG government to sell the shareholding at a loss.
Since PNG’s prime minister Peter O’Neill was replaced two months ago, his successor James Marape has ordered a thorough review of the case.
UBS said it welcomed Marape’s move to establish a commission of inquiry into the loan.
The bank said this will provide a welcome opportunity to independently evaluate PNG’s strategic investments.
UBS added that a report by the country's ombudsman had revealed nothing untoward on the part of either the bank or its employees.
It said the loan had been granted in 2014 in accordance with local rules and regulations.
UBS said an experienced local law firm, Ashurst, had been part of the negotiations at the time.
The government had also received further assistance from KPMG and Norton Rose Fulbright, a global law firm.