The government has directed a stop to the proposed sale of Pacific Balance Fund (PBF) Shareholding Interest in Trukai Industries Limited by Melanesian Trustee Services Limited (MTSL), to protect the interest of local unitholders and safeguard the country’s part ownership of the major rice distributor. The Minister for International Trade and Investment, Mr. Richard Maru said that the Share Buy-Back Agreement that MTSL is pushing to sell off PBF shareholding in Trukai to SunRice Group, an Australian owned global rice food company, raises concerns in regard to Papua New Guinea’s national interest. In the agreement, MTSL proposed to sell its 33.77% shareholding for approximately AU$17.5 million to SunRice Group which already owns 66.23% of Trukai shares. Since its incorporation in 1970, Trukai had grown to be the number one rice brand in Papua New Guinea (PNG) and it is the leading supplier of rice, amounting to 80% besides other competitors. Ordinary Papua New Guineans pride themselves as having ownership stakes (unit holders) through the 33.77% in Trukai through PBF. Minister Maru said there were major concerns of national importance around this proposed transaction. “Firstly, MTSL has no powers to act on this sale because its trustee license expired in 2017 and it is yet to renew or be granted the license. Secondly, the unitholders of PBF have not been consulted. This is a very significant transaction, and the unit holders did not come together in the AGM and agree on the transaction. Their interest is being compromised and the sale is not in their interest according to the formal complains that we have received from them.” Thirdly, he said Trukai is 30% PNG owned through PBF and SunRice owns 70%, hence, this transaction will dilute PNG ownership and allow for a foreign company to own and control 80% of PNG’s rice market. This is a major concern to the national interest because it will give SunRice as sole owner the concentrated market power which may be used against the interest of consumers, employees, and the country at large. Minister Maru said this proposal was a surprise to the industry stakeholders, in particular the Ministry of International Trade and Investment and the Capital Market industry regulator, the Securities Commission of Papua New Guinea (SCPNG). “The documents with respect to the proposed Share Buy-Back were not disclosed to the Securities Commission of Papua New Guinea,” said Minister Maru. “The proposed sale of shares also has the potential to interfere with the Government’s plans to develop a local rice industry as opposed to importation under the Special Economic Zone aspirations of our country. Also, should this agreement be transacted as proposed it will certainly affect the welfare and job security of about 1, 000 Papua New Guineans who are employees of Trukai at present,” he added. “The Government has now directed the Securities Commission of Papua New Guinea to conduct an investigation into the proposed sale to determine whether or not the MTSL has a valid Capital Market License to operate as the trustee of PBF,” said the minister. The 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 Securities Commission of Papua New Guinea 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,” said Minister Maru.