Thursday, 25 May 2017

Bank of PNG Governor Loi Bakani is hell-bent with O'Neill regime corruption and will face axe when Opposition forms the next Govt

SINCE the O’Neil-Dion PNC-led government took office five years ago, their mismanagement of the economy has been acknowledged by myself, representing the Opposition, on countless occasions, from the illegal UBS loan and a substantial decrease in foreign reserves, to the lack of education and health foresight bestowed on Papua New Guineans.

The lack of teaching facilities and lack of medicine as well as the manipulation of economic information on the status of our economy, is enough to inform Papua New Guineans that the O’Neil PNC government hasn’t prioritised the welfare of PNG’s population and the economy.

Certain public servants are also responsible for their negligence, in conforming to the ill will of the coalition government and one of these public servants is the Governor of the Bank Of PNG (BPNG), Loi Bakani.

His recent outrageous comment that the economy shouldn’t be a topic of discussion during the election, can only reflect his guilty conscience when visible struggling by the employed and companies struggling to make ends meet by sacrificing their workforce, is a daily occurrence.

The silent majority are well informed that their coffee, tea, sugar and rice has increased in price, due to a high inflation rate and Bakani’s statement alone implies that he has not been running BPNG, independent of the politics of the day.

A new government after the 2017 elections, will investigate if he assisted in bringing PNG’s economy into its current status, a professional negligence to PNG of the highest form.

No Governor of BPNG who places importance on the successful running of the economy because he has a fiduciary duty to the country and its people would say the outlandish comment that Bakani has made because one of the most critical components of this election is the actual management of PNG’s economy.

There is no coincidence regarding the economic mismanagement and the Governor of Bank of PNG, Loi Bakanai, being at the head of our Reserve Bank during this period, the following are very specific and real examples of his professional negligence and there is no media statement from him, that will digress from his involvement:

1. UBS Loan
Bakani and BPNG advised the O’Neil PNC Government on the illegal UBS Loan but at no time did BPNG understand or provide all of the information that was required for NEC to demonstrate that the PM and Acting Secretary for Treasury were forcing what is the greatest crime and fraud committed on the people of PNG. Bakani did not advise on the market risk or the debt burden or the foreign exchange factors that would be a result of the Australian Dollar Borrowing against what was already a weakening kina in the foreign exchange market.

2. LR Group

The Governor himself signed and authorised the K50M transfer to LR Group for “generators” and also changed the exchange rate that suited LR Group better rather than applying market rates to the transfer. The Governor is directly connected to this theft of public monies and further, there is no allowable circumstance where the Governor can decide an exchange rate price for a foreign currency conversion. The Governor did this for political points and not for the best outcomes for PNG.

3. Paper Notes
The paper notes story is just that, a story to cover up a large discrepancy of the process associated with removal of currency from the system, ie. demonetisation. If the story of stolen containers was true, where is the global incident report issued by BPNG, the Governor and where is the immediate acknowledgement of the funds being stolen? Is there an insurance claim against the transport company and an international Anti Money Laundering report issued? The answer is NO.

4. Foreign Exchange

To date, Bakani has no understanding or grasp on the foreign exchange problems and is continuing to issue directives to the banks to slow down the process and limit the foreign exchange market. The truth is, any foreign currency transfer for the ordinary Papua New Guinean or a company at the designated rate by the Governor of BPNG rate is not working and living under the rule of law of international trade is nonexistent, a clear reason as to why professional negligence, on the Governor of BPNG’s part should be investigated.

5. Bank Exposure

The Governor has allowed Bank of South Pacific Ltd. (BSP) to lend excessively, mostly to the O’Neil Government, its associated State Owned Entities (SOE’s) and allowed them to report those debts differently so that BSP does not have to report its breach for the exposure to its prudential limits.

The Governor is giving favourable treatment and terms to BSP, without using the law of what BPNG as an independent body has set. There is no level playing field where Bakani is concerned and with reasons only known to him, he willingly turns a blind eye to the law and its application.

The economy of PNG has been mismanaged since 2012 and “keyboard warriors” conveniently forget that I was making regular statements on the O’Neil government and their corrupt practices on the state of the economy to the current status we are faced with now; I have made numerous bold statements on where our economy was heading, much to it falling on deaf ears, and some of those have been centred directly at Loi Bakani.

The Governor of BPNG does not want any talk about the economy as he does not want Papua New Guineans to know the true extent of his involvement but when Pangu Pati forms Government three things will happen:-

i) The removal of Loi Bakani as Governor of BPNG and an automatic freeze on all his accounts and assets to determine his level of involvement that has led to the economic downfall of PNG and our currency;

ii) A frank and transparent report to PNG of the level of economic mismanagement at BPNG, the banks in PNG to determine their risk exposure to the Government and the SOEs and in what forms those deals have been done and the fees paid to politically sensitive people as well as public employees;

iii) A complete assessment of all managers and departments at BPNG, to determine the level of corruption that has been growing and freezing all the accounts and assets of those people that are found to have participated in the negligence and mismanagement of the economy.


Of the assets and illegal moneys recovered, Pangu will have them sold and will use the money as a start point for economic rebuilding. For those who say I have no experience in commenting on the economy, my actions in rebuilding PNG’s economy after the 2017 elections will show my capabilities.

Hon. Samuel H Basil, MP
Pangu Pati Lida & 
Deputy Opposition Leader 
Press Release - 25/05/17.



Loi Bakani without due diligence of the office his occupies, he politicised the integrity of the PNG's Reserve Bank and loves front pages of the newspaper with the polies.


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