A loan granted by Switzerland's largest bank contributed to political upheaval in Papua New Guinea that is resonating to this day. UBS has now issued a statement outlining its view of the case.
Five years ago, UBS granted a loan worth $1.2 billion to Papua New Guinea, a country that shares a border with Indonesia.
Papua New Guinea used the money to buy a stake in Oil Search, a petroleum company. The deal went wrong as the oil price fell, forcing the government to sell the stake at a loss.
PM Replaced
The investment decisions resonates to this day. The country replaced its prime minister two months ago and his successor last week ordered a thorough review of the case.
UBS welcomed the move by the new PM, the bank said in a statement. The commission will provide a welcome opportunity to independently evaluate the strategic investments of Papua New Guinea.
Not at Fault
The bank added that a report by the country's ombudsman had revealed nothing untoworth committed by either the bank or members of staff. The loan had been granted in 2014 in accordance with local rules and regulation.
UBS added that an experienced local law firm, Ashurst, had been part of the negotiations at the time. The government received further assistance from KPMG and Norton Rose Fulbright, a global law firm.
