Tongan government to sell satellite orbital slots

Kiliki heni: ke lau a e ongoongo ni 'i he lea faka-Tonga

Claims that the Tongan government is in the process of selling two of its orbital slots have prompted calls to review the constitution and legislation to prevent government from selling national assets without Parliament’s approval.

The Tongan Public Service Association (PSA) wants Prime Minister Lord Tu’ivakano to terminate the sale and has called on the government to review the agreement between the government and Tongasat Company over the orbital slots.

PSA Secretary Mele ‘Amanaki said PSA had obtained a copy of Lord Tu’ivakano’s Cabinet Decision No. 365 of May 23, 2014 which confirmed the approval of the outright sale of the two orbital slots. 

A team of government officials has reportedly been sent overseas to negotiate the sale.

‘Amanaki said the cabinet document also noted the options for the division of the sale proceeds between Tongasat and the Government. 

It approved that TP$4 million [NZ$2,493,380.91 / AU$2,166,000.00] be assigned for Tongasat to pay Government if the sale goes through, subject for further negotiation.

The Prime Minister’s office could not be reached for comment

Claim

‘Amanaki said the PSA was concerned that government budget relied heavily on overseas donors and grants despite the fact “there are many people in Tonga who are poor and struggling to make ends meet.”

She said although it is unknown how much money would come from the sale of the slots theTP $4 million agreed for Tongasat to pay Government as shares "is a very small amount".

'Amanaki said, according to government document, agreement signed between Government and Tongasat on 30 April 2009 had figures that shows the total revenue Tongasat collected from third parties who have leased the two orbital slots since 2009 to date was around US$10.4 million (TP$17.4million / NZ$16,116,035.46).  

Democratic Leader ‘Akilisi Pohiva who has been a long-time critic of Tongasat and its owner, Princess Pilolevu Tuita,  said the orbital slots should have stayed under the control of the  government and not the royal family.  

US business magazine Forbes has estimated Princess Pilolevu’s personal take from Tongasat at $US25 million (TP$46 million; NZ$29 million) and said she had moved the company to Hong Kong “beyond the fail scrutiny allowed by Tongan law.”

Pohiva claimed the princess’s father, the late King Taufa’ahau Tupou IV, breached the constitution when he allowed his daughter to make money from Tonga’s orbital slots.

He referred to Tonga’s constitution clause 17 which says:

“Government to be impartial – The King shall govern on behalf of all his people and not so as to enrich or benefit any one man or any one family or any one class but without partiality for the good of all the people of his Kingdom.”

Tongasat

In the 1980s Princess Pilolevu, Tongan businessman Kelepi Tupou and American citizen Jerry Fletcher were partners in an airport catering business. It was established mainly to teach the princess about running businesses.

In 1987 Fletcher’s friend, the Spanish-born Dr Matt Nilson, an expert on satellites, arrived in Tonga and was introduced to Princess Pilolevu.

Dr Nilson told the princess he believed the Government of Tonga should apply for a number of orbital slots.

The princess took up the idea with his father, King Tupou IV, who agreed to meet Nilson in November 1987.

The king was interested in the idea and in April 1988 His Majesty’s Privy Council authorised Nilson to establish the Friendly Islands Satellite Communications Inc. and does business as Tongasat.

Dispute

A letter dated in January 1998 by former Minister of Justice and Attorney General Lord Tevita Tupou, which was published by local media, revealed the government was concerned about its agreement with Tongasat over the orbital slots.

The letter said there was an agreement between Tongasat and government to share the net income from the company on a 50/50 basis. However the government was not paid anything from Tongasat nor supplied with an audited account in 1997.

The Attorney General accused Tongasat’s management of financial mismanagement, misrepresentation and conflict of interest and recommended its exclusive agency be terminated.

Financing

Nilson invested US$2 million (TP$3.7 million; NZ$2.3 million) in Tongasat and claimed he was the only one who spent money on the set up of the company. 

Nilson said he: "founded, funded, initiated, developed, marketed and financed Tongasat over six and one-half years from October 1987 to February 1994."

Nilson  was fired as Tongasat’s managing director in February 1994 for an alleged conflict of interest after he signed up Rimsat Ltd., a Fort Wayne, Indiana, start-up formed in April 1992.

He filed a lawsuit against Pilolevu, Fletcher and Tongasat in the U.S. District Court in the District of Columbia.

His claim was settled with an agreement for Tongasat to make payments to Nilson.

The government became concerned about the Nilson settlement as it would affect the financial viability of Tongasat and its ability to perform the agency duties to Government and pay its proper dues to Government.

Payment

In 2008 the then Prime Minister, Dr Feleti Sevele, told the Tongan Parliament Tongasat had settled all of its outstanding debts to government.

He did not give any details of the payment and critics became suspicious after it was revealed in 2012 that Chinese grant money totalling of US$49 (TP$90 million/NZ$55.5 million) had been transferred to Tongasat after Princess Pilolevu wrote to Sevele and asked him for the money to help revive her satellite company.

The first payment of TP$22 million (NZ$14 million / US$12 million) was paid by the government in 2008.

The PSA and the Democratic Party declared last week they had taken Tongasat and the Tongan government back to court in a fight to have the Chinese aid grant money returned to the government.

At the same time it was revealed Princess Pilolevu has sued Pohiva for malicious prosecution.

The legal action comes after previous litigation by Pohiva against Her Highness who he accused of theft and embezzlement.

Princess Pilolevu is seeking $US135,000 (TP$249,00; NZ$155,000) in compensation, saying Pohiva had damaged her reputation.

The main points

  • Claims that the Tongan government is in the process of selling two of its orbital slots have prompted calls to review the constitution and legislation to prevent government from selling national assets without Parliament’s approval.
  • The Tongan Public Service Association (PSA) wants Prime Minister Lord Tu’ivakano to terminate the sale.
  • PSA Secretary Mele ‘Amanaki said she had obtained details of options being considered for the division of the sale proceeds between Tongasat and the Government. 
  • Tongasat is owned by Princess Pilolevu. The company and the princess have been at the centre of a scandal over the transfer of Chinese aid money to her company.
  • As far back as 1998 a report by the Attorney General accused Tongasat’s management of financial mismanagement and recommended its exclusive agency be terminated.

For more information

Tongasat’s flawed genius’

‘Letter from Tevita Tupou to privy Council regarding Tongasat’

Tonga’s Princess Pilolevu speaks of love letters and business

Tonga's royal family battling for control of satellite fortunes’

LEAVE A REPLY

Please enter your comment!
Please enter your name here