$13m Sydney Mansion Adds New Layers to UBS Loan Scandal

Revelations that former Prime Minister Peter O’Neill’s son is living in a $13 million waterfront home in Sydney’s most exclusive residential street adds new layers of intrigue to the UBS loan scandal.

The house in Sydney is owned, but never used, by prominent businessman Theophilus Constantinou, according to the Australian Financial Review.

The AFR describes Constantinou as one of Papua New Guinea’s richest men and ‘a close associate’ of Peter O’Neill. PNGi can exclusively reveal the relationship goes much deeper; the two men are partners in a company called Webb Street Apartments Limited and O’Neill has sold several of his companies to Constantinou in the last three years.

The AFR has suggested the UBS Commission of Inquiry should look into the use of the Sydney Mansion by O’Neill’s son as there are a number of intriguing links to the unlawful $1.24 billion loan saga.

The UBS loan is estimated to have led to losses of over $420 million for the government of PNG but generated considerable profits for a number of beneficiaries. In addition to the Swiss bank UBS, which lent the money, and Oil Search Limited, which received the funds, there were a number of international law firms that wrote the contracts and government approvals and were paid handsomely for their work, as PNGi has recently revealed.

One of those law firms was Norton Rose Fulbright. Partner Anthony Latimer, the AFR claims, was in charge of the team advising the PNG government on the loan borrowing and share purchase, which took place in 2014. The Ombudsman Commission claims 15 different laws may have been broken in approving the loan.

According to the AFR, it was another Sydney based partner for Norton Rose Fulbright, Vince Baudille, who acted on the house purchase for Constantinou in 2015.

O’Neill has disputed that the house was purchased by Constantinou in 2015. Instead, claims O’Neill, it was acquired ‘well before the UBS loan’. That version of events is not supported though by the Australian real estate website, Domain. An article titled ‘When billionaires go property investment shopping’ details Theophilus Constantinou’s purchase of the Point Piper mansion from Hong Kong businesswomen Irene Lee. The article was published on 31 July 2015.

Both Latimer and Baudille left Norton Rose at the same time in January 2018, says the AFR.

The AFR has also pointed out that Theophilus Constantinou’s brother, Kostas Constantinou, sits on the board of Oil Search. He has been a director since 2002. There are no suggestions of any impropriety on his part.

What the AFR has not revealed though is that Theophilus Constantinou and Peter O’Neill are in fact business partners, sharing ownership of Webb Street Apartments Limited, together with real estate agent, Ingrid Richardson.

Webb Street Apartments Limited was registered in March 2016 by Theo Constantinou. The company has four issued shares. One is held by Theo’s company Monier Allied Products, two are held by Peter O’Neill and his wife Lynda Babao, through their company Bluehaven No.41 Limited. The final  share is owned by Richardson, through her company Sudbiripa Limited.

Webb Street Apartments lists its business as ‘rental activities’ and has declared assets of K10 million.

Webb Street Apartments is described as an exclusive apartment block with stunning ocean views

‘Webb Street Apartments’ is also the name of a small block of executive apartments over looking Port Moresby’s iconic Ela Beach.

Is this apartment block the K10m asset owned by Theo Constantinou and Peter O’Neill through their eponymously named company?

As well as registering Webb Street Apartments Limited, there were three other significant business transactions between Theo Constantinou and Peter O’Neill in 2016.

First, Constantinou purchased Peter O’Neill’s controlling interest in Insurance Partners (PNG) Limited. In 2014, Insurance Partners was described by the Oxford Business Group as the second largest insurance broker in PNG, one that ‘specialised in government business’.

Constantinou followed up on this purchase by buying another two of O’Neill’s prime assets, the civil contracting company Wild Cat Developments Limited and the airline South West Air.

The purchase of Wild Cat was particularly timely for O’Neill as the company was then under investigation by the Anti-Corruption and Integrity office of the Asian Development Bank over the award of a bridge-building contract in West New Britain.

In 2018, PNGi and The Guardian newspaper revealed how Wild Cat won the $32m government contract in a process with “serious procurement irregularities” that may have violated anti-corruption guidelines. Implementation of the contract was also fraught with problems, requiring the ADB to temporarily stop payments and send in inspectors. Eventually, the contract was terminated and had to be re-tendered to a Chinese company.

If the AFR is correct in alleging Peter O’Neill’s son is living rent free in an unused S$13m Sydney mansion purchased by Theo Constantinou, using lawyers who were heavily involved in securing the UBS loan, then the facts presented above, that expose the closeness of the relationship between O’Neill and Constantinou, would  seems to make even more compelling the case for the promised Commission of Inquiry to look further into the circumstances surrounding the mansion’s purchase.

It is sure to also pique the interest of new Police Minister, Bryan Kramer. He has promised his own parallel investigation into the UBS saga to run alongside the Commission of Inquiry. He has also pledged to hold O’Neill accountable for the ‘corruption and decay’ during his seven years in power; seven years during which, says Kramer, the former Prime Minister was at the centre of patronage networks.