Home News Caretaker Gov’t makes way for LSL and RIPEL takeover

Caretaker Gov’t makes way for LSL and RIPEL takeover

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There has been a lot of public comments in relation to the current caretaker government’s decision to secure and buy-back the full ownership of the Levers Solomon’s Limited (LSL) along with its subsidiary, the Russell Islands Plantation Limited (RIPEL) and return the rights to decide how these two pieces of important real estates are controlled and utilized, to the hands of the government and Solomon Island people, instead of foreign entities.

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The return of full ownership of LSL and RIPEL to the government holds significant cultural, social, and economic implications to the people of Guadalcanal, Russell Islands and to the wider long-term economic prosperity and peace and security of Solomon Islands. It has also been the call from successive Guadalcanal Provincial Government Assembly and the people of Guadalcanal that these alienated lands be returned to them.

This is particularly important in that the caretaker government is also very conscious of the concerns expressed by people of Guadalcanal that will never accept a foreign owner of what they consider to be their land, hence unless the ownership returns to the Solomon Islands government, there could be potential for further civil conflict in future if foreign ownership of the estates becomes permanent.

To provide a background, the LSL and RIPEL Real Estates had been under foreign ownership for a long time. Successive governments had tried different strategies to secure the return of ownership of these two real estates without success.

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A rare opportunity to secure the return of the full ownership of LSL and RIPEL has recently presented itself to the government, through the decision of the Australian Court that is handling the LSL Estate who recently appointed the Liquidator for the Estate.

The Liquidator visited the country in mid-February 2024. Their message was clear. The LSL estates was to be liquidated immediately. Whoever pays the $140 million dollars that is due, in order to pay off the creditors of the LSL estates will have the titles of the whole estates returned to them. The Australian Court directed that once paid off, the current creditors will no longer have any rights to the estates. They will have to handover ownership to be transferred to the investor that pays the $140 million dollars.

The Solomon Islands Government was accorded the First Right of Refusal by the liquidator after which they consider alternative buyers.

After decades of unsuccessful efforts to secure the return of full ownership of LSL and RIPEL estates to Solomon Islands ownership, this opportunity provided through the Australian Court and conveyed to the Caretaker government in mid-February 2024, offered the only, and final chance, the people of Guadalcanal, Russell and Solomon Islands has to finally regain full ownership these two estates.

The Liquidators have been instructed by the Australian Court to liquidate the estates within a very short timeframe. If the government does not buy off the creditors, any foreign investor that buys it will have the full ownership of LSL and RIPEL Estates, hence Solomon Islanders will lose LSL and RIPEL to foreign ownership forever. This is something that no government can take lightly.

However, thanks to the decision by the Australian Court to liquidate the LSL estate, the government has one final opportunity to secure full ownership of the LSL estate by settling the $140 million outstanding due. By the same token, if the government fails to settle the $140 million outstanding dues, the investor that pays it, will own LSL and RIPEL estates in perpetuity, hence Solomon Islanders will lose ownership of the estates forever.

Given that the liquidators must execute the Court instructions immediately, and the likelihood that Solomon Islands stands to lose the ownership of LSL and RIPEL estates to foreign hands for ever if it did not intervene, and noting the concerns raised by the Guadalcanal people, the caretaker government, through a Cabinet decision sought the assistance of three national institutions – the Solomon Islands Provident Fund [SINPF], the Solomon Islands Ports Authority [SIPA], and the Solomon Islands Electricity Authority [SIEA], to raise the amount required by the government to secure the return of full ownership of LSL and RIPEL estates.

The caretaker government made this decision to commence the process of seeking the necessary funds to buy-back the full ownership the LSL and RIPEL estates. The caretaker government cannot make the commitment of the funds needed to secure the full ownership of the two estates. The final government legal process to secure the fund and decision must rest with the incoming government to consider and to execute it if it wishes to regain the full ownership of the LSL and RIPEL Estates.

This simply means that regardless of which government comes after the National General Election, one of the first important decisions it must make is whether to secure and return of full ownership of the LSL and RIPEL Estates, or to allow another foreign investor to take full ownership of the estates thereby these estates being lost to Solomon Islanders forever.

The fact that the government had reached out to the three national institutions, had enabled the three institutions to already commence their respective due diligence processes, so that in the event they are prepared to be part of the journey to return the full ownership of these two estates to the hands of Solomon Islands people through the assistance they may provide to the government through agreed financial mechanisms, then if the new government wishes to execute the payment of the outstanding $140 million after it is sworn in to office, it can do so fairly quickly.

In conclusion, the Australian Court dealing with the LSL Estates had appointed a Liquidator for the LSL estate. The Liquidation process had commenced and will be completed within a very short time frame. The Solomon Islands government had been offered the last but importantly the only chance to regain the full ownership of not just LSL Estate but also RIPLE Estate if it was able to settle the $140 million in dues to pay off all creditors.

Once all creditors are paid off, the full ownership of the two estates will be returned to the government, hence returning for the first time to Solomon Islands the ownership and control of the two estates. If the government does not pay the $140 million, then any investor that pays the $140 million will have full ownership of the two estates, hence they are lost to Solomon Islands government and Solomon Islands forever.

Given the gravity of the situation, and the potential for civil conflict if the ownership of the real estates do not return to the hands of the Solomon Islands government, the Caretaker government, by a Cabinet decision, agreed to seek the assistance of its three national institutions while in caretaker mode to allow any incoming government the opportunity settle this critical matter of importance after it is sworn to office.

The actions taken by the caretaker government to ensure the people of this country and in particular the people of Guadalcanal and Russel Islands regain the full ownership and control of the LSL and RIPEL Estates is the only responsible action any responsible government can do to safeguard what belongs to the people of our beloved country.

The actions taken by the caretaker government are preparatory, so that any incoming government can move very quickly to settle this matter because the Australian Court will not wait for the government to find a solution. They may require the Liquidators to conclude the Liquidation even before the new government is elected.

However, the caretaker government hopes that the actions it has taken will give the Liquidators the confidence to wait several more weeks until the formation of a new government who would then address this matter appropriately to ensure the LSL and RIPEL Estates remain in the hands of Solomon Islands government and Solomon Islands people.

The failure of government to act may give rise to national security issues given the demands from the people of Guadalcanal. Having the Government control LSL and RIPEL as opposed to foreign ownership provides the necessary comfort to our people.

Investment in the long-term peace and security of our country is not cheap. Securing of the full long-term ownership of the LSL and RIPEL Estates back into the hands and control of the Solomon Islands government and its people, is an investment in the long-term peace and security of Solomon Islands that any new government coming after the national general election must consider seriously.

ENDS///

issued by Government Communications Unit

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