Papua New Guinea prime minister resigns amid government defections and looming questions over $832,000 UBS loan

FAZRY ISMAIL/AFP/Getty Images

Papua New Guinea Prime Minister Peter O’Neill resigned on Sunday after several members of his government defected to the opposition.
O’Neill, who has held the country’s premiership for seven years, will hand over the leadership to former prime minister Julius Chan.
O’Neill avoided a vote of no confidence earlier this month after senior ministers, including finance, defense and health, resigned from his government.
Switzerland’s financial regulator is in contact with global bank UBS over loans made by its Australian arm to O’Neill’s government, Reuters reported.

Papua New Guinea Prime Minister Peter O’Neill resigned on Sunday after several members of his government defected to the opposition.

O’Neill announced his resignation at a press conference in the capital city of Port Moresby, saying that the country’s parliament has a "need for change" after a string of MPs announced their resignations.

O’Neill, who has led the country for over seven years, will hand over the prime ministership to former prime minister Julius Chan, who held the position from 1980 to 1982, and again from 1994 to 1997.

"We have agreed to a change of direction," he said.

His resignation will need to be approved by the Governor-General, a representative for Queen Elizabeth II who formally holds head of state in the Commonwealth nation.

Australia’s Prime Minister Scott Morrison told journalists in Canberra that he looked forward to working with Chan "in the same way [he has] enjoyed such a strong friendship and relationship with Peter O’Neill".

O’Neill avoided a vote of no confidence earlier this month after senior ministers resigned en masse from his government. Parliamentarians, including Finance Minister James Marape, had expressed dissatisfaction with several of O’Neill’s policies, including his handling of a multi-billion dollar gas deal with French petroleum company Total which they claimed was not in the country’s interests.

On Friday, members of the opposition said they would push for an investigation in Australia and Switzerland over a $AU1.2 billion ($832,000) loan arranged by the Australian arm of Swiss financial institution UBS for the PNG government, which saw the Pacific island nation lose millions of dollars and potentially breach local laws, according to documents seen by the Australian Financial Review.

Reuters reported in March that the Swiss Financial Market Supervisory Authority is "in contact with the bank" about the loan to the PNG government.

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