The warrant was issued two weeks ago after an investigation by the country’s anti-corruption agency Taskforce Sweep into Mr O’Neill authorisation of government payments to the Paraka law firm of about $28m.
Justice Eric Kariko rejected the legal argument that the issue of the warrant was an abuse of power requiring the court’s intervention.
The prime minister has denied he authorised any fraudulent payments and is expected to appeal today’s court decision.
Acting Police Commissioner Geoffrey Vaki, appointed by the O’Neill Government since the warrant was issued, says he does not plan to enforce the warrant.
In a turbulent three weeks in PNG politics, Mr O’Neill has faced calls to resign as his government disbanded the country’s anti-corruption agency, dismissed his attorney general and suspended or sacked several senior law officers.
Yesterday the acting Solicitor General Jubilee Tindiwi was sacked by the newly appointed Attorney General Ano Pala.
Last week the head of the disbanded Taskforce Sweep Sam Koim met with Australia’s Foreign Minister Julie Bishop in Canberra to warn Mr O’Neill was undermining the rule of law in PNG.
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