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International News

UBS to repay

Investment bank UBS asked to repay tens of millions of dollars to PNG
ABC Radio Australia, On Pacific Beat

The Australian branch of international investment bank UBS is being asked to repay tens of millions of dollars to Papua New Guinea, after a royal commission in the country was told the bank "preyed" on the "poor country".

In 2014, the PNG Government took out a $AUD 1.2 billion loan through the Sydney office of UBS to buy shares in the ASX-listed company Oil Search.

The commission has heard that then-Prime Minister Peter O'Neill championed the deal to the exclusion of other ministers, a claim he denies.

The current Prime Minister James Marape was the Finance Minister at the time.

In exclusive interviews with the ABC outside the hearing, Mr O'Neill and Mr Marape both call for restitution.

"If all of us who were implicated for our criminal culpability we face prosecution, and I am dead serious about this one, but more importantly we're seeking restitution for loss of revenue to our country," Mr Marape told the ABC.

The commission has been told PNG lost almost $300 million, with UBS accused of taking advantage of the country.

Expert testimony from US consulting firm The Brattle Group describing the loan as "overly complex".

Brattle's Toby Brown gave evidence that PNG had actually paid nearly $175 million more than it would have "if the prices had been fair".

"The transactions were not fairly priced, so the state paid UBS more than it would have done if the prices had been fair. The total value transferred was $174.8 million," he said.

In earlier evidence Brattle had said UBS earned $81 million in excessive profits

"If that's true they should repay it," former Prime Minister Peter O'Neill told the ABC.

He denies suggestions from counsel assisting the inquiry James Renwick that he was the driving force behind the deal with UBS at the "exclusion of all other ministers".

This week Dr Renwick told the Commission the investigation was being hampered by limited cooperation from UBS and law firm Norton Rose Fulbright Australia.

The inquiry may now be extended, and Commissioner Margaret White said they may explore alternative ways to obtain evidence from witnesses who have so far refused to appear.

UBS said it's provided a comprehensive statement and a suite of supporting documents to the inquiry.

Australian authorities will also be called on to assist in the matter, according to Prime Minister James Marape.

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