SIG in a dilemma over its SBD140M land buy-back scheme, COL cautions that accepting the DOCA means paying off someone’s debt
THE GOVERNMENT appears to be in a dilemma over its hastily arranged $140 million scheme to buy-back prime land jointly owned by Levers Solomon Ltd (LSL) and Russell Islands Plantation Estate Ltd.
Commissioner of Lands, Alan McNeil, warned that accepting the Deed of Company Arrangement (DOCA) would mean paying off someone’s debt.
The thinly-veiled warning was contained in a letter the Commissioner McNeil, wrote dated 30 August 2024. The seven-page letter was requested by Deputy Prime Minister and Minister for Mines, Energy and Rural Electrification, Bradley Tovosia, according to the Commissioner’s letter.
In it, the Commissioner laid out the pros and cons of each of the five options and the benefits or otherwise to the Government and LSL/RIPEL.
He urged the Government to hear out the views of LSL/RIPEL – the joint owner of the land in question.
“It is important to know Patrick Wong’s views, as his cooperation may be required, depending on which option or combination of options SIG pursues,” he said in the letter.
But despite the Commissioner’s efforts in explaining the pros and cons of each of the options, the Government of National Unity and Transformation (GNUT) Coalition appears to have ignored the need for dialogue with LSL/RIPEL Board and Management.
Prime Minister Manele was briefed by the Commodities Export Marketing Authority (CEMA) Cabinet sub- committee last week.
The CEMA Cabinet sub- committee Director Simon Chottu provided the policy progress on the work done so far and the on- going goals to achieve the revamping of the Russell Island Plantations Estates Limited (RIPEL), Russell Islands Investment Forum (RIIF) and Levers Solomon Limited (LSL).
There was no mention of the need to meet the LSL-RIPEL Board and Management in the briefing.
“More specifically the update is to give an oversight on the on-going efforts to revitalize RIPEL coconut operations to its commercial undertakings, consolidates tapping RIIF investment economic potentials, and furthering the activities in line (with) the buy-back policy of all LSL land, which will see a return of these LSL lands to the government,” a statement issued by the Office of the Prime Minister after the briefing said.
PM Manele was quoted in the statement as having “emphasized the need to stand resolutely in resolving the matter and achieve this policy area with best-desired outcomes for all parties”.
Commissioner McNeil’s summary outline of the options appears below.
| OPTION | DESCRIPTION | GOOD FOR SIG? | GOOD FOR PW? |
| 1 | Forfeiture and compulsory acquisition | Unknown – Still in Court | No |
| 2 | Transfer FTES | Partly, Some FTES forfeited | Yes |
| 3 | Deal with Receivers | Yes, with 75% of LSL | Yes |
| 4 | Deal with Liquidator | As per (3) but costs more | Yes |
| 5 | Option 2 then 3 | Yes, and 100% of most FTEs | Yes |
The Commissioner of Lands said the Deed of Company Arrangement (DOCA) is one of the options open to the Government.
“The problem is, “SIG will be paying off someone else’s debts” – a position the Government has also rejected.
He warns that “if SIG goes down that Route via Liquidator and DoCA….people of Solomon Islands will be paying off someone else debts.”
“Patrick Wong prefers for either SIG to purchase LSL’s Fixed Term Estates (FTEs) directly from him or for SIG to deal directly with his receiver or Van Vlymen’s entities. These are two of the options SIG has been considering.
“This briefly sets out to explain the pros and cons of each of the options SIG has to retrieve ownership of LSL’s assets in Solomon Islands,” the Commissioner said.
“For completeness, in each option discussed below. SIG would be in danger of transacting without being able to assess claims by other parties against land owned by LSL.
“In transaction structures involving a deal with Patrick Wong (i.e. all structures other than Option (3) the DOCA structure) we recommend that terms are incorporated requiring Patrick Wong to disclose details of any such deals, and guarantee that there are no outstanding claims over these land parcels,” he said.
It is unclear what option has been recommended to the Government as this is subject to a report to be made to Cabinet by Deputy Prime Minister Tovosia. He was in New Zealand last week, reportedly attending to the death of a relative there.
Meanwhile, the Commissioner of Lands has disclosed other debts which SIG has incurred in its rush to settle the matter without even discussing it with LSL/RIPEL – the legal owners of the land in question.
These costs include fees and other charges incurred when SIG engaged an Australian liquidator, Hall Chadwick.
The Commissioner revealed that the Government owes Hall Chadwick – the Administrators, Deed Administrators and Liquidators of the Australian companies – more than AUD3.5 million [about SBD19.6 million] in fees and expenses.
“The Phase One Report recommended, based on independent accounting advice, that those amounts are discounted by more than AUD1.5 million [about SBD8.4 million]. Even if that was agreed, the net payment to Hall Chadwick would be around AUD2 million [about SBD11.2 million],” the Commissioner warned.
By Alfred Sasako
