Updated: 08/13/2014 12:26 | By Agence France-Presse

Papua New Guinea leader under fire over loan: reports

Papua New Guinea's Prime Minister Peter O'Neill has been referred to the public prosecutor for alleged misconduct over his government's purchase of shares in an oil and gas company, reports said Wednesday.


Papua New Guinea leader under fire over loan: reports

Papua New Guinea's Prime Minister Peter O'Neill (R) with his Australian counterpart Tony Abbott, pictured in PNG's Port Moresby in March, 2014 - by Ness Kerton

O'Neill criticised the Ombudsman Commission's move as disappointing, adding that he had not been given adequate time to respond to the complaint, The Post-Courier newspaper reported.

"This is a case of 'sour grapes' by former ministers who have been pushing this issue with the ombudsman," O'Neill said in a statement quoted in the newspaper.

"I will see to it that these claims are fully tested through the court system and if there has been undue interference in this process it will be exposed."

O'Neill said the referral relates to the government's decision to raise a bank loan to buy back shares in Australian-listed resources company Oil Search -- a major employer in PNG, and a partner with ExxonMobil in a massive Liquified Natural Gas project in the Pacific nation.

The ombudsman has alleged that proper processes were not followed over the deal or the recent sacking of Treasurer Don Polye.

Polye had reportedly refused to sign off on the Aus$1.2 billion (US$1.1 billion) loan to buy back some of the shares the government had offloaded in March.

O'Neill denied the allegations, saying the government had fully disclosed the process to acquire the shares which he said had already risen in value.

"In politics there will always be spoilers who seek to cause trouble for the democratically-elected government," the prime minister said.

"But we will not let this distract us from our economic development agenda. My only concern is that investors are not put off by ongoing political attacks."  

Earlier this year O'Neill faced possible arrest over corruption claims which he also said were politically motivated. He has said he will cooperate with any investigation into those allegations. 

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