The motion of no confidence against former Prime Minister Hu’akavameiliku has alleged that the Tonga Development Bank (TDB) had violated the established loan limits for clients.
It also claimed that the bank’s financial status remains uncertain due to the inability of companies with government-guaranteed loans to fulfil their repayment obligations.
The former Hu’akavameiliku administration has been accused of legal violations due to its failure to present evidence of the loan guarantee to the House. It has also been accused of failing to prevent the two banks, TDB and Tonga National Reserved Bank (TNRB), from entering into a legal dispute, which is currently awaiting a court decision.
The allegations come at a challenging time for TDB as it faces a court battle while also confronting a wave of misinformation that it claims is damaging to its public image on social media.
Earlier this month, the bank urged its clients in an effort to maintain their trust following police executing a search warrant at the bank for the second time within a few months.
Vote of no confidence motion
One of the seven motions presented to the Parliament as part of the vote of confidence accuses Hon Hu’akavameiliku of failing to uphold the rule of laws which govern TDB and TNRB.
The motion, which had been listed as number four, raised concerns among the Opposition MPs after it had been reported that in 2022, the TDB allegedly breached the lending limits set for the bank when processing a loan application. As a result, a subsequent agreement was established in which the government eventually acted as a guarantor in 2022 with a mission to resolve this matter by May 2024, the loan guarantee’s end date.
The motion said the government has yet to submit any proof of the guarantee.
As seen by Kanivca News, the motion and a copy of the TDB 2022 Annual Report have been submitted as an appendix. It specifically referenced page three, item 39, paragraph two of the report as supporting evidence for the claims made by the movers.
Government as owner
The motion emphasised the legal obligation of the government to appoint the two banks’ boards of directors and chief executives.
It also said that the government failed to manage a dispute between the two banks, which escalated to legal proceedings that resulted in substantial fines and costs.
It said the Lord Chief Justice had ordered that TNRB and its Governor pay TOP$15 million to TDB as part of the dispute between the two banks. It appeared that the defendants subsequently initiated a legal challenge against this ruling.
“The costs incurred will be financed through the banks’ proceeds, which may have been reserved for their development projects intended to benefit the people”, the motion said in Tongan of the banks’ legal dispute.
The motion said that this was the first time in the history of Tonga that the two banks had engaged in a conflict that ended up in court.
In his response, Hon Hu‘akavameiliku said in Tongan: “It is important to note that the two banks operate as separate legal entities that function independently from government decision-making processes”.
Regarding the bank’s court disputes, the former Prime Minister said waiting for the court decision would be wiser since they were still in progress.
