Friday 5 July 2024
The Minister for State Owned Enterprise, William Duma, has assured the country that shares held by the Motor Vehicles Insurance Limited (MVIL), in Bank South Pacific (BSP) have not been sold.
Minister Duma was responding to a recent news article, claiming MVIL has sold its BSP shares, which he asserted was not correct.
“The Marape-Rosso Government is a financially responsible government and the National Executive Council (NEC) has directed due diligence be undertaken for an option of selling shares,” Minister Duma said.
“This is a strategic business position that would only come into play in the best interests of MVIL and further approval by NEC.”
He further added, the article claiming conclusion of the transaction is simply incorrect.
“No sale has been concluded, and the shares have not been sold to overseas interest as has been falsely reported.”
Minister Duma clarified that NEC has directed MVIL to include, as part of its activities in 2023, to work with Kumul Consolidated Holdings (KCH) to undertake an investment due diligence assessment of the risks of overexposure to equity shares in BSP.
“This is smart business as KCH, through the General Business Trust (GBT), holds over 20 percent of BSP and any sale will not affect this holding.”
Minister Duma has expressed concern over the misreporting and is seeking a correction to be published in the newspaper.
He has also emphasized that any sale will have to meet stringent processes as regulated by the PNG X and ASX as BSP is a listed public company.
“In the event of any future sale taking place all proceeds will accrue to the shareholder, Kumu Consolidated Holdings, which will be utilised for the benefit of the GBT.
“None of the proceeds will accrue to the Government as SOEs are trading companies that unlike other state entities, do not receive rents.”
He said SOEs carry the country’s core business infrastructure and have to trade on their balance sheet.
“KCH has ensured that all its SOEs now pay a dividend to the State annually without fail since 2022 following internally driven reforms and balance sheet restructuring.
“KCH paid a dividend of K80 million in 2022, K77 million in 2023 and is set to pay another dividend in 2024 as budgeted for in the 2024 National Budget”, Minister Duma said.
“This trend is an impressive record given the last dividend KCH paid was in 2015 from a BSP borrowing of K200 million”, added Minister Duma.