Terry Wong’s mystery Solomon Islands $151bn offer

An offer too good to be true: a proposed $151bn loan from a mysterious Chinese broker to one of the world’s poorest countries.

Solomons MP Peter Kenilorea Jnr said his nation was increasingly being targeted by big-money schemes since the country’s switch in diplomatic allegiances from Taiwan to China. Picture: Supplied

It is an offer that’s too good to be true: a proposed $US100bn ($151bn) loan from a mysterious Chinese broker to one of the world’s poorest countries.

Purported Beijing-based financier “Terry Wong”, who could make $US11bn on the deal, urged Solomon Islands Finance Minister Harry Kuma to “act promptly” to secure the funds before other interested parties.

The windfall, if accepted, would send Solomon Islands debt to a stratospheric 77 times GDP.

But Mr Kuma told Mr Wong he was “very interested” in the proposed 20-year loan, offered at the nation’s cash deposit rate of just 0.025-0.05 per cent.

“Your 11 per cent brokerage fee for your organisation is noted and accepted in principle,” Mr Kuma wrote to Mr Wong last November.

“Again, note that we are very interested in this funding arrangement as it would certainly contribute to the improvement of our economy and the betterment of our people.”

The correspondence — about nine weeks after Solomon Islands severed diplomatic relations with Taiwan in favour of China — has rocked the country’s government, and added to growing concerns in Canberra over the country’s vulnerability to predatory interests.

Harry Kuma, Rick Houenipwela former prime minster Malcolm Turnbull and Rod Brazier at Parliament House in Canberra in 2018. Picture Kym Smith

Mr Kuma ordered his department to prepare an investment plan for the funds, based around US treasury bonds, diversified ­investments and term deposits.

His department advised “the rewards far outweigh the risk”.

“It would be regrettable if the Solomon Islands government did not strongly consider the acceptance of this opportunity as it would be a game changer for the nation with huge rewards,” the ­advice said.

Mr Kuma told the Solomons Star newspaper he was waiting to get more information on the deal and the proposal was yet to go to cabinet. He said any loan the government took “must generate a return so that we can repay it”.

Solomon Islands opposition MP Peter Kenilorea Jr said his nation was increasingly being targeted by big-money schemes since the country’s switch in diplomatic allegiances from Taiwan to China

“It really is extraordinarily stupid,” he said. “The fact the government was willing to entertain this is a clear sign that the switch was not in the national interest.”  The loan offer follows another proposal by a Chinese company seeking to lease an entire island with a deepwater port.

Lowy Institute Pacific program director Jonathan Pryke said the Sogavare government was under huge political pressure to get some tangible benefits from the diplomatic switch, leaving it vulnerable to scammers and carpetbaggers.

“It seems every opportunist is swarming in, trying to have agreements and MoUs signed left and right — all looking to get their slice of a deal,” Mr Pryke said.

“Frankly, this proposed loan is one of the more ridiculous I’ve heard of. There is no way China would lend Solomon Islands $100bn. If I was the Treasury secretary I would probably want to do my due diligence on it, just to see where the conversation leads.”

Former Australian high commissioner to Solomon Islands James Batley said the country faced serious fiscal problems but he didn’t believe the country would go through with the deal “given it is so fanciful”.

“The budget is in trouble. They have some pretty serious structural issues,” he said.

“But Solomons could borrow money from reputable organisations such as ADB and World Bank. Indeed they could borrow through (the government’s new) Australian Infrastructure Financing Facility for the Pacific.”

Mr Wong strongly denied to the ABC that the loan offer was a scam.