The Papua New Guinea Government has directed the Securities Commission of PNG to investigate the sale to an Australian company of a substantial local shareholding in Trukai Industries.
International Trade and Investment minister Richard Maru said that the agreement to buy 100 percent of Trukai Industries Ltd is a national concern, as that will place 80 percent of the country’s rice market in the hands of a foreign company.
Maru said the Melanesian Trustee Services Ltd (MTSL) proposed to sell its 33.77 percent shareholding for about AUD$17.5 million (about K42 million) to SunRice Group which already owned 66.23 percent of Trukai shares.
“The Government has now directed the Securities Commission of PNG (CSPNG) to conduct an investigation into the proposed sale to determine whether or not the MTSL has a valid Capital Market Licence to operate as the trustee of Pacific Balance Fund (PBF),” he said.
“SCPNG will also investigate into whether MTSL has a legal mandate to act as a trustee in such a transaction without a valid license and if it has complied with the regulatory processes under Section 36, 37 and 189 of the Capital Market Act 2015.”
The Government has further tasked the SCPNG to ascertain whether all unit holders have approved this transaction or not.
“SCPNG is tasked to carry out an investigation within 21 days and report back its findings for appropriate actions,” Maru said.
He said the share buy-back agreement that MTSL is pushing to sell off PBF shareholding in Trukai to SunRice, an Australian owned global rice food company, is a big concern.
“Since its incorporation in 1970, Trukai had grown to be the number one rice brand in PNG and it is the leading supplier of rice, amounting to 80 per cent besides other competitors,” he said.
“Ordinary Papua New Guineans pride themselves as having ownership stakes (unit holders) through the 33.77 percent in Trukai through PBF.”
Maru said MTSL had no powers to act on this sale because its trustee license expired in 2017 and it was yet to renew or be granted the license.
“The unit holders of PBF have not been consulted,” he said.
This is a very significant transaction, and the unit holders did not come together in the annual general meeting and agree on the transaction.
“Their interest is being compromised and the sale is not in their interest according to the formal complaints that we have received. “This transaction will dilute PNG ownership and allow for a foreign company to own and control 80 percent of PNG’s rice market,” he said.