Is it or is it not? Has the CEO of TDB, ‘Emeline Tuita stepped down or not? And how about rumors that the Chairman of the Board Peni Vea had been stood down as well?
As usual reports on allegedly traumatic events at the government owned bank is hard to verify. Most reports are on social media so one has to check if these reports are factual.
But the difficulty obviously is there has not been an official statement made either to confirm or deny the spiraling reports. Because of the lack or absence of official reports, the public therefore maybe fed with unconfirmed, or even inaccurate reports.
There are several local online news outlets that have run the news citing various “reliable and unidentified TDB” sources. Even a traditional media platform like Broadcom FM87.5 reported a decision by TDB top authorities to stand down Tuita along with Chairman Peni Vea.
But why; and what are the reasons behind the alleged standing down?
Others such as Tonga Independent News and Kaniva News out of New Zealand have reported of the allegation that TDB CEO Emeline Tuita has been stood down.
Whatever the details and the specifics of what is going on, there is definitely something abnormal happening at TDB.
Emeline Tuita is not averse to controversy as reported in 2013 when her term as CEO of Tonga Rugby Union was terminated alleging her recruitment did not follow proper procedure and there was no contract signed for her engagement as CEO.
IN 2018, her contract with the Ministry of Tourism as chief executive was terminated amid allegations of misconduct, abuse of power and disobedience in the Ministry. There were accusations at the time of Tuita using her position to benefit her own private business.
Latest allegations and issue with Cost Low
The latest allegation comes in the wake of speculation and controversy surrounding a proposal to construct a luxury centre on royal land in Tonga.
It is claimed that a proposal was made last year by Cost Low Company seeking funding from TDB. It is for a project at the king’s estate of Tufumahina, which has been stalled because of the alleged dispute between Cost Low and TDB.
The bank has announced the construction of a luxury resort on royal land at Polata’ane, and it appears they are funding the project.
The Tonga Independent has reported the Cost Low Company filed an application for an injunction on a mortgage notice issued by TDB.
The dispute appears to date from a meeting in March last year between TBC CEO Emeline Tuita and the head of Royco Group, owners of Cost Low, Charlotte Cocker Tu’i’ile’ila. Cost Low had secured a government construction contract in Tufumāhina. It is understood Cocker wanted to refinance Cost Low, requiring financial support from TDB.
On March 26, TDB invested $2.184 million into Cost Low. However, on March 27, an unexpected delay occurred when Mrs. Cocker’s accountant came to execute share transfer documents for the new SPV. There was still no progress by April.
Cocker claimed there had been a serious breach of confidentiality related to Cost Low’s banking affairs. She claimed a third party has been making enquiries regarding the contract held by Cost Low.
Cost Low’s legal representative sent letters to the Reserve Bank on April 12, alerting them to the confidentiality breach.
The Independent claimed there had been no official response, the Development Bank issued a Mortgage Notice, alleging defaults on securities and saying it intended to take possession of Cost Low’s property.
The National Reserve Bank steps in
An internal National Reserve Bank of Tonga document appears to show it was concerned at the amount of the TDB’s exposure to debt totaling $TP6.6 million through the Cost Low loan.
It said the TDB’s liquidity rate had fallen for, among other reasons, the acquisition of Cost Low assets and development rights at the Tufumāhina property.
The NRBT report said decisions around the Cost Low loan had been taken “without due diligence to protect TDB’s interests.”
According to reports Cost Low has taken legal action against TDB’s CEO Emeline Tuita. Cost Low has accused the bank and CEO Tuita of failing to perform their duties under an agreement to process a loan to fund the Special Project Vehicle (SPV) to consolidate the Cost Low and Royco businesses.
According to the statement of claim, Cocker submitted her business plan to the TDB and told the bank the royal estate agent had approved in principle the company’s application to lease lands at the king’s estate at Matatoa for 70 years. The lease value was $TP6 million and this was part of the company’s loan.
It was alleged that the bank had paid the TOP$6 million lease to the king from the bank and not from Cost Low, which had applied for the loan. It is alleged the kings’ agent said the payment should have come from Cost Low, not the bank.
It also showed CEO Tuita of the bank insisted the payment was still from Cost Low but since the bank would have shares of 80 percent in the SPV the bank could issue the payment directly to the king.
However, legal arguments are ongoing between the lawyers for the plaintiff and for TDB.
Whatever is happening to the TDB CEO and the Board Chairman needs official confirmation. But one thing for sure is undeniable, that TDB and Cost Low Company are in legal confrontation; and the Reserve Bank is now exercising their power to sort out what is allegedly a mess!
