This article was added by the user . TheWorldNews is not responsible for the content of the platform.

Reserve Bank board members worried by possible conflict of interest with finance company tied to Lord Sevele

Reliable sources have told Kaniva News that members of the National Reserve Bank of Tonga’s board queried possible conflicts of interest if Lord Sevele was appointed to the country’s most important financial institution.

As Kaniva News has reported over the past few days, Minister for Finance Tatafu Moeaki wrote to the board reassuring them that Lord Sevele would “manage any perceived conflict of interest on his part and any other members of the board.”

It is understood the board had queried the Minister over Lord Sevele’s appointment because Lord Sevele owned Rowena Financial Services.

This company’s services included money transfer and this appears to be a direct conflict of interest with Sevele’s role.

The National Reserve Bank of Tonga Act says:

“No director shall act as a delegate of any agricultural, commercial, financial, industrial, professional or other interest, or receive or accept directions therefrom in respect of duties to be performed under this Act or by virtue of such capacity under any other Act.

“All directors shall fully disclose to the Board . . . .  any agricultural, commercial, financial, industrial, professional or other interests with which they or any person with whom they have personal, family, business or financial relations may at any time be directly or indirectly connected and shall refrain from voting on any matter related thereto which becomes the subject of Board action.”

Rowena Financial Services is registered with the Tonga Business Registry. The director is Lord Sevele’s wife Ainise and the shareholder is their daughter Marianne Rowena Tohi. The shareholder was changed from Feleti Sevele, who is Lord Sevele, on 22 July 2020.

Several other corporate entities listed on the Business Registry appear to be tied to Lord Sevele either directly or through family directorships and shareholdings. Not all of these appear to be still functioning.

These include Molisi Tonga Ltd, Sevele Education Foundation, Tonga Travel and Tour Ltd and Citywide Tech Tonga Ltd.

Kaniva News  makes no imputations as to the legality of these company’s arrangements.

A leading Tongan figure has expressed concern that apart of a conflict of interest with the Reserve Bank, potential conflicts of interest may also exist with Lord Sevele’s other positions.

Our source suggested that a conflict of interest may arise when a person who is a Lord and an advisor to the king owns a  businesses that could benefit from royal or Privy Council decisions.

Chinese loan

One of the most serious concerns raised about Lord Sevele’s previous actions was his decision to borrow $118 million from China to rebuild Nuku’alofa after the 2006 riots.

The amount borrowed was later criticised as being too much and it was claimed by some economic analysts that the damage to Nuku’allofa could have been rebuilt with for a few million.

When Lord Sevele was questioned about this by the Tonga Broadcasting Commission, he said he thought China would turn the loan into a grant, an idea China rejected despite many requests.

Businesses whose property was destroyed in the riots were allowed to borrow from the loan. It was later reported that some of them refused to pay back the money they owed because they thought that China would one day turn the loan into a grant.

Much of the loan money was used to renew the royal palace in Nuku’alofa, even though it was not affected by the 2006 riots. The Vuna wharf, which was not affected by the riots, was also funded from the loans.

Lord Sevele’s company, Molisi Tonga also benefitted from the loan, which had not been approved by Parliament.

The Minister of Finance was contacted for comment. Lord Sevele ‘O Vailahi could not be reached for comment.