TONGAN DEPUTY PM TUPOU RESIGNS OVER OFFSHORE TRUST FUND ROW

NUKU‘ALOFA, Tonga (September 29, 2001 - Tonga Star/PINA Nius Online)---Tongan Deputy Prime Minister and Justice Minister Tevita Tupou has resigned as a result of the continuing controversy over the management of the kingdom's US$ 33 million offshore trust fund.

His resignation was accepted by Princess Regent Salote Pilolevu Tuita, the Secretary to Cabinet, ‘Eseta Fusitu‘a, told a news conference.

Mr. Tupou also resigned as justice minister and attorney general.

Police Minister Clive Edwards has been named new deputy prime minister, Mrs. Fusitu‘a said.

An MP filed a motion in the Legislative Assembly on Monday to impeach the minister over the management of the fund, of which the minister was a trustee. At least one other minister is also expected to face an impeachment motion, according to parliamentary sources.

The fund was built up through the sale of Tongan passports, mostly to Chinese worried about their future ahead of the British colony's return to Chinese rule in 1997.

Questions about the condition of the funds became public when a People's Representative in Tonga's Parliament asked for a full report from Minister of Finance Siosiua ‘Utoikamanu on millions of dollars said to be in jeopardy.

Ha‘apai MP S. Teisina Fuko requested the Minister to report on the management of the account, the trustees' involvement, investment activities, and the current financial status.

He also requested a report on a trip the Minister went on to the United States earlier this year, supposedly to verify the stability of the account.

In previous debates in the Legislative Assembly, MP Fuko expressed his concerns over three questions:

These were:

In 1988, the Government passed the "The Tonga Trust Fund Act"; which set up the account with three trustees to manage the operation.

The act required that a separate "Foreign Reserves" account should be established. This would be where the Kingdom would save its reserves to be used for national emergencies, or major developmental projects in the future.

The Prime Minister was appointed chairperson, and the other members were the Minister of Finance and Minister of Justice/Attorney General.

The Prime Minister and Minister of Finance have changed due to retirement or new appointments. The only remaining original trustee member was Minister of Justice/Attorney General Tupou.

It cannot be determined what the real current status of the funds are in today's volatile money market uncertainties.

The Legislative Assembly has not received the financial report for the financial years 1998/99, 1999/2000 and 2000/2001.

"We also expressed to the Acting Secretary our dissatisfaction that there was no definite time or methods in which the Government is required to repay their loans from the Foreign Reserves account," said MP Fuko.

"These loans amount to $14.9 million as of March 31st, 1998 and it is accounted for in the Audit Report of 1998 as a Government short-term loan. From an audit point of view, it's important to state clearly and precisely the repayment methods and time, and the loan should be listed in the Government account, as a loan from an external source.

"Regardless of this, the financial report for March 31, 1999, has not been submitted to Parliament so that action can be taken accordingly."

Pacific Islands News Association (PINA) Website: http://www.pinanius.org 

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