Former Papua New Guinean prime minister Peter O’Neill has been charged with providing false evidence in an inquiry into a multimillion-dollar government loss on an investment deal.

Mr O’Neill, who remains in the Pacific island nation’s parliament, denied the charges, which stem from when he was leader in 2014.

Mr O’Neill’s government obtained a $1.3 billion loan through the Swiss-based investment bank UBS to buy a 10.1 per cent stake in the Australian stock exchange-listed energy exploration company Oil Search Ltd.

The government eventually sold its stake at a loss and an inquiry into the deal this year recommended charges against Mr O’Neill for providing false testimony.

The charge carries a potential prison sentence of 14 years.

Mr O’Neill, who was replaced by the current Prime Minister James Marape in 2019, said he faced three charges of giving false evidence to the UBS Commission of Inquiry.

“As far as I know … I did not mislead the Commission of Inquiry. But we will test this in court,” he told reporters in Port Moresby.

“This is all part of the game that they are playing to try and intimidate me and harass me,” he added, referring to his political opponents.

Mr Marape, who was finance minister in Mr O’Neill’s government when the shares were bought, said the losses exceeded $340 million.

Police Commissioner David Manning said Mr O’Neill came to police headquarters as requested on Monday and was released on bail after being charged.

“This is the first arrest following on from the findings of the Commission of Inquiry and it will by no means be the last,” Mr Manning said in a statement.