Former Prime Minister Peter O’Neill has launched a blistering attack on the government’s decision to switch its banking arrangements from Bank South Pacific (BSP) to the newly formed National Banking Corporation (NBC), describing it as “economic treason” that has wiped billions from Papua New Guinean investors overnight.
In a strongly worded statement, O’Neill said the move has devastated ordinary Papua New Guineans, superannuation funds, and landowner companies that collectively own the majority of shares in BSP, a bank that has served the country for nearly 70 years.
“Papua New Guineans are the biggest losers in this Marape-made madness,” O’Neill declared. “With the stroke of his pen, Prime Minister Marape has cost Papua New Guineans more than K2.2 billion in just one day. This is a cruel blow to workers, retirees, and landowners.”
The government announced earlier this week that all public accounts would be transferred to NBC, which was licensed as a commercial bank only eight months ago. The decision shocked investors and triggered a sharp fall in BSP’s share price.
O’Neill said the fallout was immediate and brutal. “86 percent of BSP shares are owned by Papua New Guineans. Yesterday, that value was wiped out as markets reacted with alarm to the government’s interference. This is not just bad policy—it is a national disaster,” he said.
The former Prime Minister singled out the Mineral Resources Development Company (MRDC), which only two months ago bought a 70 percent stake in BSP shares previously held by MVIL. The acquisition brought MRDC’s holding to 15 percent, making it the second largest shareholder in BSP.
“The Prime Minister himself, as sole trustee shareholder of MRDC, oversaw this deal in July,” O’Neill said. “At the time, MRDC proudly declared BSP was the best performing blue-chip company in the Pacific. Now those very landowner companies—Gobe, Moran, Kutubu, Hides, Angore, LNG Pipeline, and others—are left horrified as their hard-earned investments are gutted in less than two months.”
O’Neill accused the government of betraying landowners and engaging in what he suggested could be insider trading. “They knew when they sold those shares that their value was about to be destroyed. This is a massive breach of trust.”
He also warned that the repercussions extended beyond PNG. “Workers and retirees across the Pacific—in Solomon Islands and Fiji—have seen their superannuation funds crumble because they invested in BSP. This Marape decision has sent a financial tsunami across the region.”
The former Prime Minister raised a series of pointed questions:
Who owns and controls NBC, and is it still fully a subsidiary of the National Development Bank?
How did NBC obtain its license in record time? Were proper capital requirements met?
Why override the advice of MRDC, which just weeks ago expanded its BSP holdings?
Is the government trying to gain direct control of public funds ahead of the 2027 election?
“This is not financial management—it is economic vandalism,” O’Neill said. “It undermines investor confidence, accelerates our slide toward grey-listing, and destroys the cornerstone of investment in Papua New Guinea.”
He also linked the decision to PNG’s broader economic woes, citing sliding kina, rising debt, and increasing dependence on the IMF. “The timing could not be worse. Jobs are evaporating, our reputation is sinking, and now this government is dismantling the very institution that underpins regional financial stability.”
O’Neill ended his statement with a stinging rebuke: “This government must be held accountable. Perhaps the only silver lining is that the new Waigani National Court Complex is big enough to process those responsible for this scandal. Our people deserve justice.”
He called on Prime Minister James Marape to resign. “Enough is enough. Every decision he makes hurts Papua New Guineans. He should hang his head in shame.”
The government has yet to issue a detailed response to O’Neill’s accusations, but the financial sector is bracing for further volatility as the markets digest the implications of the sudden banking shift.
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