The Asian Development Bank (ADB) has finalised its audit of the Tonga Development Bank (TDB), addressing concerns over alleged loan breaches that have raised significant questions about the institution’s lending practices, Deputy Prime Minister Taniela Fusimālohi said.
The audit follows criticism by the Eke government of the former Hu’akavameiliku government regarding the bank.
In last year’s proposed vote of no confidence, it stated that the previous administration failed to resolve legal disputes between the two government-owned banks, the TDB and the National Reserve Bank of Tonga (NRBT).
After Prime Minister Eke assumed office in January, he quickly began reforming the TDB.
This included replacing the board of directors, appointing a new chairperson, and resolving the legal dispute with the NRBT that had escalated to court.
The government successfully demanded that the case be discontinued.
Eke said the banks’ customers would ultimately bear the costs incurred.
In response to Eke’s accusation, Hu’akavameiliku previously stated that TDB is a government entity that operates independently.
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. TDB chief executive ‘Emeline Tuita previously denied Piukala’s claim to Kaniva News.
Parliamentary Select Committee
Concerned after a report alleging a breach of loan policy by the TBD, a Parliamentary Select Committee was established to investigate, Fusimalohi said last week.
He stated that the alleged breach involved loans, which would take too long for the TDB to receive repayments.
The Committee recommended that the Eke government appoint a reviewer for the TDB, which led to involvement from the ADB.
The review aimed to clarify what had occurred and which policies and regulations may have been breached, Fusimālohi said.
“The ADB’s assessment has been finalised, and the report has been submitted. The new TDB board has begun following up on the report,” Fusimalohi confirmed in Tongan.
However, he stopped short of disclosing specific findings.
