ICSI: govt finalizing position on $140M buy-back scheme for LSL, RIPEL
A LEGAL team from Australia appears to have convinced the government to change its position on the much-talked about $140 million buy-back scheme of prime land jointly owned by Levers Solomon Ltd (LSL) and Russell Islands Plantation Estate Ltd (RIPEL).
This was revealed by the Government’s business arm, the Investment Corporation of Solomon Islands (ICSI) in response to a series of questions Solomon Star had asked about the scheme.
It is understood senior lawyer, Tim Klineberg (pictured) from the King and Wood Mallesons’ Sydney Office was in Honiara last week. The firm is multi-national and has “very experienced personnel in the field of liquidation, according to ICSI.
Mr. Klineberg leads the Restructuring and Insolvency team at King & Wood Mallesons. He has been involved in the most complex and difficult restructuring and insolvency assignments in Australia and is widely recognised as a leader of the Australian restructuring and insolvency market. He has experience advising secured and unsecured creditors.
Tim also has specialist cross-border restructuring expertise gained in the Asia-Pacific region and in the United Kingdom. He is regularly involved in situations involving thousands of jobs, debts in the billions, having worked on many of the major restructuring and insolvency situations over many years [and] is a trusted adviser to the major Australian banks, listed and private companies and many of the major insolvency practitioners in Australia.
He also has significant cross-border restructuring expertise in both England and the Asia-Pacific region, according to his profile.
ICSI declined to comment when asked whether the government is proceeding with the $140 million buy-back scheme.
“We cannot comment on that yet. SIG, is now finalizing its position on what to do with the recommendations made in the (lawyer’s) report,” ICSI said.
ICSI also confirmed the lawyer produced a due diligence report.
“Yes, they produced a due diligence report and no, we cannot give you a report. You will have to request [it from] SIG.”
“We hope this is of help – we cannot provide any more information at this stage.”
An ICSI spokesman said the lawyer, now known to be Mr. Klineberg, also briefed the Opposition and the Independent Group in Parliament in a separate briefing before he left for Australia.
“ICSI, too, has briefed the Opposition and the Independent Group in Parliament. We feel there is so much misunderstanding over this important matter and that it is important that the key players are fully informed,” the spokesman said.
Prime Minister Jeremiah Manele announced the $140 million buy-back scheme earlier this year but without consulting the Board and Management of the LSL-RIPEL entity, the legal owner of the prime land on Guadalcanal and at Yandina in the Russell Islands.
The $140 million, which the government does not have, would be raised through loans from State-Owned Enterprises (SOEs) such as the Solomon Islands National Provident Fund (SINPF), Solomon Ports and Solomon Power in exchange for Treasury Bonds.
The money would be used to pay off secured and unsecured creditors following the liquidation of an Australian company earlier this year.
But while all this sounds too good to be true, the legal team from Australia, which specializes in liquidation appears to have dismantled the idea of the buy-back scheme.
It is understood the team has also advised against compulsory acquisition because the value of the land could be as high as four times more. Its position is believed to be consistent with advice tendered to the Government by the Commissioner of Lands, according to those who are familiar with the matter.
The team was said to have been invited by the Investment Corporation of Solomon Islands (ICSI), the business arm of the government. ICSI holds shares in SOEs on behalf of the government.
It is understood one suggestion being put on the table as an option is for ICSI and the Lavukal Association, which represents the landowners in Russell Islands become shareholders in a new corporate arrangement.
In the event the suggestion is dismissed, the GNUT government would have little or no choice at all but to deal with the working Chairman of the LSL-RIPEL Board, Patrick Wong.
Mr. Wong has reportedly said earlier that the government would have saved up to $40 million in cost if it had dealt directly with the Board and Management of LSL and RIPEL in the first place.
The government has not openly responded to the reported overtures by Mr. Wong because of the mistaken belief it could apply the land grab approach which former Zimbabwe President Robert Mugabe had applied during his rule.
According to the British Broadcasting Corporation (BBC), thousands of white farmers were forced from their land, often violently between 2000 and 2001.
The seizures were meant to redress colonial-era land grabs but contributed to the country’s economic decline and ruined relations with the West, according to the BBC.
Meanwhile, Solomon Star contacted the Chairman of RIPEL Patrick Wong for comments, but he said he had no comments, as he has not seen a copy of the report.
Mr. Wong said he heard that an expat came to brief Cabinet and the Opposition in Honiara last week.
When Solomon Star asked Mr. Wong, about the rumours that he is meeting SIG, he confirmed that an invitation has been extended but did not wish to elaborate due to confidentiality.
By Alfred Sasako
