The Securities Commission of Papua New Guinea says it is not in the national interest for Kulim Malaysia to increase its stake in New Britain Palm Oil Limited (NBPOL).

NBPOL’s palm oil processing facility in the United Kingdom. (Credit: NBPOL)

Kulim is already the major shareholder in NBPOL and wants to raise its stake from 48.97% to 68.97%, as Business Advantage PNG reported in June.

The Securities Commission has put Kulim’s offer of K20.38 for up to 30 million ordinary shares in NBPOL on hold until 10 September. It asked for submissions on its ruling to be made by yesterday.

In a letter to Kulim’s lawyers last week, the Commission’s Acting Chair, Alex Tongayu, said the offer was not in the national interest because it would dilute PNG shareholders’ interests and reduce liquidity in the PNG stock market. In addition, he claimed there was a risk of job losses at what is one of PNG’s largest employers and there would be a greater chance of a full takeover.

‘It is in the interest of the country that the NBPOL does not fall in the hands of a single holder,’ he wrote.

Tongayu said there would no longer be a minimum of 300 local shareholders and NBPOL would have to delist from the Port Moresby Stock Exchange and may have to delist from the London stock exchange.

He also fears future major decisions will be made by Kulim and that NBPOL would lose its independence.

‘Even the West New Britain Provincial Government with its 12.08% shareholder is not likely to make any difference in the operation of the company,’ the Acting Chair wrote.

‘The Commission sees that PNG and its shareholders will be marginalised by a foreign company on their own land.’

The Commission has also noted a discrepancy of one million shares on the share registries; that Kulim and NBPOL had failed to notify the Commission of the partial takeover bid; and that Kulim had failed to tell the Commission of its takeover notice.