The seventy (70) per cent (%) Motor Vehicle Insurance Limited (MVIL) shares in BSP sold by the State was purchased by the Mineral Resources Development Company (MRDC), a Papua New Guinean buyer and not a foreign investor as speculated following the announcement recently. This was revealed by the Minister for State Enterprises, William Duma this week, putting it out there for the public and business community to know and easing some concerns that were raised regarding the future of the MVIL and its ownership. “Ownership of these shares in BSP remains within our country, giving the opportunity for everyday Papua New Guineans to own part of BSP,” stated the minister. “The sale has provided much needed funding to enhance State Owned Enterprise as part of reforms to modernize technology and service delivery without having to rely upon allocations form the national budget and expensive borrowings from banks requesting State guarantees. More specifically, more of the proceeds of the sale will be used to invest in improving the reliability and efficiency of services provided by PNG Power Ltd and Water PNG Ltd mainly in Port Moresby and Lae.” He went on to say that decision of the National Government is timely. “This decision is properly timed and grounded in economic prudence. It further takes into consideration the investment principles in KCH (Kumul Consolidated Holdings) Strategic Asset Allocation in terms of exposure and the Marape- Rosso Government’s vision to re- invest in the infrastructure asset stock of the country towards doubling GDP over the next 10 years.” However, the Opposition on the other hand is calling this transaction illegal. The Member for Sine- sine Yongomugl and Opposition member, Kerenga Kua, explained that this purchase should not be the case because the MVIL should not be classified as a State-owned Enterprise, giving the State authority to do so with the sale of shares. “Very important point, we must understand that MVIL is not a State-owned Enterprise (SOE). MVIL is a Trust company,” stressed the MP. “The government can never act like a shareholder which it has been doing right up to now. When you go through the law, you will find out that the government owned enterprises are those companies where the initial operating capital is paid for by the government. That is the definition of a state- owned enterprise.” In the case of the MVIL, Mr. Kua said it came from a statutory organization called the Motor Vehicle Insurance Trust (MVIT). “It was a trust entity and the fund in that rust was not contributed by the government, but by the motor vehicle owners at that time, way back in the seventies (70s)." "When the MVIT started, the contributing start-up capital was paid for by the motor vehicle owners at that time." “That insurance premium was collected and that was converted into operating capital and every year, all insurance premiums, has been paid into that pool that the trust has been operating on.” He said all that changed in 2010 when NVIT merged with BSP when all the trust money went into BSP. However, the now MVIL still remains as a trust company and still gets new contributions from motor vehicle owners. “It continues to be a trust company. At no point ever did the government contribute to the start-up capital. That what makes the big difference.” He claims the government has been illegally getting dividends and has been acting like a shareholder too, making decisions about the investments of MVIL, which is not an SOE. Meanwhile, the Mineral Resources Development Company (MRDC) yesterday announced that the Group has increased its shareholdings in Bank South Pacific Financial Group Limited (BSP) by acquiring a large portion of the bank’s shares that were on offer to the public by the MVIL. MRDC Managing Director Mr. Augustine Mano confirmed the purchase of 70 per cent of the shares sold by MVIL through the Port Moresby Stock Exchange. As a result of this acquisition, an incremental boost in MRDC Group’s shareholding in BSP from 13 per cent to 15 per cent underscores landowner companies expanding position, making it the second largest shareholder after Kumul Consolidated Holdings.