Princess Pilolevu takes China’s $25.45 million grant for her private owned company

    The Government of Tonga transferred a grant money from China to Tongasat Company following a request from the  owner Princess Pilolevu to help revive her business, a document submitted to court has revealed.

    Tonga’s Leader of the Democratic Party Akilisi Pōhiva sued Princess Pilolevu Tuita, Hon Prime Minister Lord Tu’ivakanō and Justice Minister Hon Clive Edwards for allegedly committing crime of larceny and receiving stolen property.

    The plaintiff claimed the trio involved in an alleged illegal transference of  US$25.45 million Chinese money to the Tongasat company on May 5,  2012.

    But the accused were eventually released last week Friday 26 with police magistrate Sālesi Mafi ruling that the plaintiff’s evidences provided could not back up his claim against the defendants.

    Agreement

    Pōhiva submitted a letter of agreement signed by Lord Tu’ivakanō and a representative from the People’s Republic of China on the 19 April 2011.

    It was an “Agreement on Economic And Technical Cooperation Between The Government Of The Kingdom of Tonga And The Government Of The People’s Republic Of China”

    It says “In accordance with the needs of the Government of the Kingdom of Tonga the People’s Republic of China shall provide the government of the Kingdom of Tonga with a grant aid of USD$25,450,000 (say USD Twenty Five Million Four Hundred and Fifty Thousand Only.”

    “This agreement shall come into force on the date of its signature and remain valid until the fulfilment of all their obligations stipulated hereinabove by both sides”.

    The grant money

    The alleged  illegal transference of the grant to Princess Pilolevu and her company was first reported by Kaniva Tonga News after Lord Tu’ivakanō’s former Finance Minister Sūnia Fili resigned leaving the government for the Democratic  Party in 2012.

    Leaked documents reported at the time  believed to be from MP Fili state an agreement between the Government of Tonga and the Princess’s satellite company where any proceeds from the company’s “sale will be split 50/50 between the Government of Tonga and Tongasat”.

    This led ‘Akilisi Pōhiva to believe the government breached its agreement with the Republic of the People of China for the fund to be granted for the development of the Tongan society.

    A press statement by the Government of Tonga on 2 November 2012 says “On the 6th of August 2008 His Majesty’s Cabinet under decision no. 840 agreed to accept USD49.9 million aid grant from China for economic and technical developments. This amount was to be paid in 2 lots, one for USD25.45 million and the other for USD25.45 million.

    “The first payment of USD24.45 million was made on the 5th day of September 2008. It was agreed by the parties that the division on the amount would be on a 50/50 basis. The second payment was received on the 19 April 2011.

    “On the 16th of November 2010 the former Government through Hon. Dr. Feleti Sevele agreed that the second payment of USD25.45 million be paid to Tongasat (less the USD6 million for tax to Government). The 50/50 division did not apply to the final tranche payment.

    The present administration did not alter the agreement with Tongasat or vary the payments which were approved by the former administration under Hon Dr Feleti Sevele. The payments to Tongasat were pursuant to the agreements and decision by the former administration”.

    Princess request

    ‘Akilisi submitted to the court a letter signed by Princess Pilolevu on the 16 November 2010 in which the Princess asked the former Prime Minister of Tonga, Dr Feleti Sevele for  the payment of the $25.45 million grant from China.

    She said Tongasat needed the money because of its duty to pay the CECEC including its tax liabilities to the Inland Revenue.

    “I write in respect of the final tranche payment of the grant by the People Republic of China in respect of the Satellite Agreement entered into between Friendly Island Stallite Communication Limited (Tongasat) and CECEC, which payment is to be made in the near future,” says the letter.

    The princess also reminded Prime Minister Sevele that her private owned company has come through consistent “financial expense and hardship” since the beginning and that she has discussed this matter with Sevele from time to time.

    Her Royal Highness however was concerned on the basis that her request to use the money for her private business would jeopardise her position with Tongasat as other private companies in Tonga would see it as an unfair and a discriminatory practice.

    “Tongasat should not, in my view be treated or categorized as similar to all Tongan registered companies, because all revenue generated by Tongasat is foreign earned revenue, as opposite to all other companies trading and operating within Tonga,” the Princess  said in her letter.

    Sevele did not sign

    Princess Pilolevu asked Dr Sevele to also sign a confirmation statement she provided in her letter to make sure the grant will be accordingly given to her.

    “I kindly ask whether confirmation to the understanding that we both shared in our most recent discussion can be affirmed by government,” says the letter.

    But ‘Akilisi submitted to the court a copy of Pilolevu’s letter and it shows that Sevele did not sign the confirmation statement provided by Pilolevu.

    Nevertheless Sevele  made an affidavit this year  on February 18 saying that he “recall signing the agreement” and that letter could be obtained from his office.

    Akilisi submitted that Sevele’s affidavit cannot be accepted in court because it contained the word “recall” implying that the former prime minister was not sure about signing any agreement with Tongasat.

    Kaniva News was trying to understand why was it difficult for the defendants to submit to court that letter claimed to have been an agreement between the former government and Tongasat and signed by Sevele but instead lodged an affidavit that based on recollection by the former prime minister.

    Payment made to Tongasat

    A copy of a letter from Tongasat to Tonga Government dated on the 18 April 2011 was also submitted to the court by the plaintiff. It was signed by the company’s Managing director Semisi Panuve and Marketing and Finance Director Lucy Anna Ilaiu.

    The letter was made one day before the final payment of the grant aid from China to Tonga. It mentioned to Prime Minister Tu’ivakano the letter from Princess Pilolevu to Former Prime Minister Dr Feleti Sevele on the 16 November 2010 and “the second tranche payment” of the grant aid expected to be paid on 19 April 2011.

    The letter put it to Lord Tu’ivakano  that “upon receipt of the fund from China” the government was requested to transfer USD$6,000,000 to the Inland Revenue Department to pay for “all outstanding tax matters of Tongasat and Princess Pilolevu”.

    It also asked that a USD$500,000 be deposited into a loan account with the Tonga Development Bank under an account name Global Trading Company Ltd.

    The remaining USD$18,950,000 to be transferred to Friendly Islands Satellite Company Limited (Tongasat) account in the Westpac Bank.

    All these payments were approved and paid  according to Tongasat’s requirement on May 11, 2012 while MP Sunia Fili was Tonga’s Finance Minister.

    Kaniva News noted however a scribble at the end of this letter saying that an e-mail by Former Deputy Secretary to Cabinet Paula Ma’u said this matter did not go through the cabinet.

    Plaintiff appeal – magistrate in question

    In his ruling Judge Mafi said that if “I have a machete and the neighbour would like to borrow it I have the freedom to take it back anytime I need it even if the neighbour was not made aware of it” as Kaniva News translation of his statement of decision into English.

    Akilisi was reported saying he will appeal the police magistrate’s decision.

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