Central Bank Governor Loi Bakani confirmed that to Loop PNG today.
Bakani clarified that the release of the levy was done only after the request was in compliance to the trust arrangement.
He added that as a banker, compliance to the arrangement that was put in place at the time of establishing the trust account is paramount and sufficient for them to effect the transaction.
"There are 2 trustees or signatories to the trust account and both have to sign."
The confirmation came after Koroba Lake Kopiago Philip Undialu revealed the payment today describing the transaction as highly suspicious and in breach of relevant laws governing the management and distribution of the development levy.
“This transaction was done in total breach of Section 98 of the Organic Law on Provincial and Local Level Goverments (OLPLLG) and Section 160 of the Oil & Gas Act 1998.”
Undialu added that section 160(6) of the Oil & Gas Act states that development levies paid into the Trust Account “shall be disbursed only in accordance with an appropriation approved by Parliament.”
“As far as I know Parliament has not passed a Bill either in 1015 or 2016 that can allow for the release of the funds from the Central Bank where the money is keep in trust.”
He said, the Secretary for Finance Dr Ken Nangan wrote to the Central Bank on December 12, 2016 authorising the release of K45, 328,461.79 of the total K135m.
Loop PNG have contacted Dr Nangan several times to confirm but to no avail.
Undialu further revealed that the Central Bank acting on directions from Dr Nangan released the money on the 23rd of December into the Hela Provincial Government Operating Account.
Undialu said he already wrote to Finance Minister James Marape copied to Secretary Finance and the Governor of the Central Bank on Jan 13, 2017 after being informed of the transaction to immediately recall and withhold the money.
He said, the request by Dr Nangan to release funds from the PNG LNG Development Levy and its subsequent payment to the Hela Provincial Government Account contravenes Section 160(6) of the Oil & Gas Act 1998 and is unlawful and illegal.
Undialu said he will be referring the matter to the Ombudsman Commission and the Police Fraud Squad.