THE secret land deal, hatched by top advisors to the former Democratic Coalition Government for Advancement (DCGA) carried an element of surprise in the planned execution of the land-grab deal.
It was intended to keep businessman Patrick Wong and the Levers Solomon Ltd (LSL) and Russell Islands Plantation Estates Ltd (RIPEL) in the dark until all the elements of surprise in the deal were in place.
Then and only then would LSL and RIPEL – joint owners of prime land on Guadalcanal and Russell Islands and Mr Wong – their working chairman, be advised.
A team of three top advisors, Attorney General John Muria Jr and Chief of Staff, the late Robson Djokovic headed the secret negotiations, which ended in endorsing the decision by creditors to appoint Hall Chadwick as liquidators.
Now, the deal shrouded in secrecy and intended to handover the ownership of land titles to the government is turning into costly nightmares for Prime Minister Jeremiah Manele. It raises the question of whether PM Manele was adequately briefed about the deal.
The liquidators now argue that Orbis Commodities Pty Ltd (‘Orbis’) was a party to a joint venture arrangement with Overseas Shipping Trading and Investment Pty Ltd (‘OSTI’).
Orbis indirectly owns 37.55 per cent of the shares in LSL. OSTI likewise indirectly owns 37.55 per cent of the shares in LSL. The DOCA transaction would result in SIG obtaining control of the combined 75.1per cent ownership of LSL currently held by Orbis and OSTI. That 75.1per cent shareholding would therefore confer on SIG control of LSL,” the liquidator argued.
The engagement of Australian Law firm, Kings Wood Mallesons, by SIG simply adds extra headache for Prime Minister Manele’s GNUT government.
In an effort to get to the bottom of this murky deal, Solomon Star has applied a question-and-answer format with the liquidators.
SOLOMON STAR: (In your media statement you referred to the Alternative Transaction. Solomon Star believes would give SIG 100 per cent control, verses your proposed 75.1 per cent control. Can you explain why a 75 per cent is better than 100 per cent control?)
LIQUIDATORS: The commitment from SIG to proceed with the DOCA Transaction has previously been reported in the Solomon Star (Gov’t announces $140m buy-back of LSL, RIPEL – Solomon Star News). In addition, the liquidators of the Companies have numerous items of correspondence from representatives of SIG confirming its commitment to proceeding with the DOCA Transaction – as recently as 23 October 2024.
SOLOMON STAR: (Could you share with Solomon Star copies of these alleged correspondence, including the most recent one just last week – on 23 October 2024, to be precise)
LIQUIDATORS: The Companies are in possession of valuation reports regarding the fixed-term estate land interests owned by LSL (‘Land Holdings’). The valuation reports were obtained for the benefit of SIG, and were procured by an Australian company established to implement the DOCA Transaction on behalf of SIG
SOLOMON STAR: (Who is this Australian company established to implement the DoCA? If indeed there is a third party, shouldn’t that Australian company just propose the DoCA and not involve SIG in terms of cost, that is paying for the production of the valuation (reports)?
OR how is SIG involved? Assuming this Australian company proposed the DOCA, does this mean SIG will need to lend or pay money to this third party. Does this also mean, it is Not SIG who is proposing a DoCA?) In that regard:
LIQUIDATORS: The reports value the Land Holdings at SB$1,267,510,000.00 (which converts to approximately AU$229,112,000.00)
SOLOMON STAR: Please share a copy of this valuation:
LIQUIDATORS: The Companies’ 37.55 per cent indirect interest in the Land Holdings is therefore valued at SB$475,950,005.00(which converts to approximately AU$86,031,500.00); and the proposed Alternative Transaction has been reported to be for SB$90,000,000.00 (which converts to approximately $16,465,000.00).
SOLOMON STAR: if you say the Companies in Liquidation are entitled to 37.55 per cent of LSL, which is valued at AUD 86,031,500 – why don’t the Liquidator go and enforce their rights?
LIQUIDATORS: The above figures clearly demonstrate that the proposed Alternative Transaction is an undervalue transaction capable of being injuncted or otherwise overturned.
The proposed Alternative Transaction fails to properly address and compensate the Companies for their 37.55 per cent indirect interest in the Land Holdings.
SOLOMON STAR: If SIG proceeds with the Alternative Transaction, won’t your two companies under Liquidation be entitled to 37.55 per cent of the Price paid for the Alternative Transaction?
LIQUIDATORS: The amount payable pursuant to the Alternative Transaction will be insufficient to result in the flow of any funds to the Companies.
SOLOMON STAR: As a Solomon islander, if SIG on behalf of the people of Solomon Islands, could get 100 per cent control for a lower price, why should the Liquidator be against that?
And, as such, prejudices the interests of the Companies and their stakeholders (does SIG owe any obligation to Creditors of Orbis and Pacific Holding, the two companies in Liquidation?
LIQUIDATORS: Addressing the interests of the Companies and their stakeholders is an essential requirement of any transaction designed to return control of the Land Holdings to SIG.
SOLOMON STAR: Solomon Star has learned that SIG has engaged another Australian Law firm, Kings Wood Mallesons. SIG could get independent advice if what you said is correct?
LIQUIDATORS: It is therefore an essential requirement which SIG must address, and any failure to do so renders the Alternative Transaction liable to injunctive relief or being overturned.
SIG has previously committed to proceed with the DOCA Transaction.
SOLOMON STAR: Could you show Solomon Star some proof and evidence of this?
LIQUIDATORS: The Liquidators of the Companies are ready to proceed with the DOCA Transaction. The DOCA Transaction is the only transaction that satisfactorily addresses the essential requirement referred to above.
SOLOMON STAR: This should be a question SIG should ask their Australian Lawyers. It does so by reason of the payment of monies to the Companies (‘Deed Fund’) that compensates the Companies for their interest in LSL and the Land Holdings, and results in the interests of all stakeholders of the Companies being satisfactorily addressed.
LIQUIDATORS: The statement by the Commissioner of Lands that SIG is paying “other people’s debts” is factually incorrect and demonstrates a fundamental misunderstanding of the DOCA Transaction.
SOLOMON STAR: From a Solomon Star point of view, if and whether SIG pays money into a Deed Fund or the Australian company implementing the DoCA and in turn it is used to pay the Companies Creditors, can you explain what is the difference?
LIQUIDATORS: Whilst the Deed Fund has been calculated by reference to the claims lodged by creditors in the liquidation of the Companies, the Deed Fund is the minimum amount required to be paid by SIG to acquire the 75.1 per cent shareholding in LSL owned by Orbis and OSTI and thereby acquire control of the Land Holdings.
SOLOMON STAR: From SIG’s perspective, if the sum for 75 per cent control is X and if SIG can get 100 per cent control for a fraction of X, please explain why shouldn’t SIG consider this?)
LIQUIDATORS: SIG is not paying the creditors of the Companies; it is paying the ultimate controlling owners of LSL and the Land Holdings. The application and distribution of the Deed Fund by the Liquidators of the Companies is secondary to the acquisition by SIG of control of LSL and the Land Holdings. The distribution of the Deed Fund is a statutory requirement under the applicable Australian legislation.
SOLOMON STAR: Finally, it would appear the fundamental question raised in my initial post (that is, my request for a copy or copies of letters of commitment by SIG representatives, was skirted. Why? Is it because it is not the case that there never were SIG letters of commitment?
There was no response to this question from the liquidators.
By Alfred Sasako
