IT has emerged that a Caretaker Cabinet approved the DOCA deal with Hall Chadwick liquidators in February 2024 – just two months before the joint elections in April this year.
By then, the DCGA government – under the leadership of Manasseh Sogavare – was already in a caretaker mode after the 11th Parliament rose on 31 December 2023.
The decision also raised the question of whether the Government had the legal standing to commit the nation to such a costly undertaking. Such an undertaking pre-empts the decision of a new government which may not necessarily feel obliged to honor the agreement
That February Cabinet decision also gave birth to the secret $140 million buy-back scheme of prime land jointly owned by Levers Solomon Ltd (LSL) and Russell Islands Plantation Ltd (RIPEL) on Guadalcanal and Russell Islands and how the money would be raised, according to those in the know.
It would appear New Prime Minister Jeremiah Manele was not adequately briefed about the details of the deal. Manele was the candidate of OUR Party for the PM’s position, which he won on Thursday 2 May 2024.
“Only when news of the secret deal came through the mainstream media, was the Prime Minister was heard to have said, oh I too I’m not fully aware of all the details.”
At the time, it was said that Cabinet approved that the settlement with RIPEL must proceed and be completed, according to insiders.
It would seem Cabinet’s decision had been conveyed to the Australian liquidators.
In the arrangement to raise the $140 million for the secret buy-back deal, Cabinet appeared to have agreed to raise the money from the sale of Treasury Bonds to financially healthy State-Owned Enterprises (SOES) such as the Solomon Islands National Provident Fund, Solomon Power and Solomon Ports.
Under the arrangement, SINPF would provide $80 million and Solomon Power and Solomon Port would each lend $30 million each. But the deal came unstuck when the Board of Solomon Ports decided against lending the money to the government.
Meanwhile the Australian liquidators are adamant there was agreement with the government to proceed with the DOCA transaction.
In response to a series of questions raised by Solomon Star, the Liquidators said they could not provide a copy of the written agreement with the Solomon Islands government, citing commercial in-confidence.
The liquidators have also threatened to sue if the government decides to walk away from the DOCA transaction.
Now the cash-strapped government is being placed between a rock and a hard place, one commentator said.
All this and more have been revealed, after Solomon Star sent the Liquidator a series of questions to which the Liquidator has responded.
Spokesman Mike Willesee responded in the following manner.
In your media statement you referred to the Alternative Transaction. Solomon Star believes would give SIG 100 per cent control, verse your proposed 75 per cent control.
Solomon Star: Can you explain why a 75 per cent is better than 100 per cent control?)
Mike Willesee: “75.1 per cent ownership delivers control of the asset. The point is not about how much ownership is better, but what the underlaying transaction achieves and the Alternative Transaction does not satisfy the interests of all parties involved, particularly in achieving value for the land.
Solomon Star: Can you share correspondence with SIG?
Mike Willesee: “No, we cannot, as these are commercial in confidence.
I reject your accusations these documents don’t exist. I remind you again of your own reporting about the announcement by SIG of their intention to enter into this transaction (https://www.solomonstarnews.com/govt-announces-140m-buy-back-of-lsl-ripel/). This is well known, and no one is denying it.
If required, these documents will be presented in court and will assist in any legal challenge should SIG not proceed with the DOCA transaction.
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)?
Solomon Star: please share a copy of this valuation);
Mike Willesee: This is not able to be shared as it is commercial in confidence, and again will be presented in court and assist with any legal challenge should SIG not proceed with the DOCA transaction.
Solomon Star: If SIG proceeds with the Alternative Transaction, won’t your two companies under Liquidation be entitled to 37.55% of the Price paid for the Alternative Transaction)
Mike Willesee: Yes, however the Alternative Transaction is undervalued, and the amount payable pursuant to the Alternative Transaction will be insufficient to result in the flow of any funds to the Companies. The Alternative Transaction is also capable of being injuncted or otherwise overturned.
Solomon Star: Does SIG owe any obligation to Creditors of Orbis and Pacific Holding, the two companies in Liquidation?)
Mike Willesee: No, and it is important to understand SIG is not paying the creditors of the Companies; it is paying the owners of LSL and the Land Holdings.
The distribution of any funds by the Liquidators of the Companies is not relevant, in the first instance, to the acquisition by SIG of control of LSL and the Land Holdings.
“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 SIG’s perspective, if the sum for 75% 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?
Mike Willesee: “Because the Alternative Transaction is an undervalue transaction capable of being injuncted or otherwise overturned.”
