The Tongan government has asked the Asian Development Bank (ADB) to conduct a full-scale investigation into the Tonga Development Bank (TDB), including any potential illegal activities and breaches of banking regulations, Deputy Prime Minister Taniela Fusimālohi said.
The decision follows the Public Enterprises Minister’s assertion that a TDB $14 million loan scheme intended to aid low-income earners, including fishermen and weavers, did not achieve its goals.
The Minister Piveni Piukala claimed that the bank provided the scheme to a larger number of individuals with good incomes.
The bank CEO, Emeline Tuita, previously denied the allegations to Kaniva News.
Deputy Prime Minister Taniela Fusimalohi confirmed the ADB investigation request last week, stating that a report alleges the TDB violated the single borrower’s limit set by law.
It has been revealed that the Prime Minister, who is also the Finance Minister, replaced the entire board of directors of the TDB in a surprising shake-up.
Before taking office, the Eke government criticised the former Hu’akvameiliku administration for negligence, claiming that it allowed the government’s two banks, TDB and the Tonga National Reserve Bank (NRBT), to face a legal issue in court.
It said the banks’ customers would ultimately bear the costs incurred.
Court case withdrawal
A Supreme Court ruling has reportedly allowed the TDB to withdraw its civil lawsuit against the NRBT.
This case accused NRBT Governor Tatafu Moeaki and local reporters of unlawfully leaking confidential banking information to the media and public.
The TDB had claimed the leak violated the NRBT Act, which carries penalties of up to four years imprisonment or a $20,000 fine, and accused Moeaki of defamation.
Local reports indicated that TDB CEO Tuita and former director Penisimani Vea challenged the decision to end the legal battle.
