THE Whole House Committee has approved the Receivership Bill 2015 after a robust debate over the power of the receivers’ and the Courts in executing receivership matters.
MPs also have different opinions on the purpose of the Bill. Government insisted it applies only to big corporate companies and not small businesses.
Ha’apai MPs reckoned the Bill will impact the most disadvantaged people in Tonga and not the investors only as claimed by the Government.
According to the Hon. Minister of Labour, Commerce & Industries Pohiva Tu’i’onetoa who introduced the Bill, the Receivership applies when a company or statutory corporation or person is in trouble financially and the Supreme Court orders that its property be placed in the hands of a receiver.
A receiver is a person or manager who is appointed through a term of an agreement or by an order from the Courts.
Tu’i’onetoa said the Bill is to provide systematic procedures in place relating to receiverships.
“If a company secures a loan from a bank and cannot repay it back, the Bank can appoint a receiver to demand and recover income of the property in receivership. So the Bill is to help revive businesses,” maintained the Hon. Labour Minister.
It took five days for MPs to discuss the Bill.
The Cabinet maintains the receiver’s job is to insure, repair and maintain the property in receivership.
“The receivers’ job involves taking control of property, sort out the company and then return it to normal management, or to pay creditors or it may proceed to restructuring of the company,” explained Hon. Pohiva Tu’i’onetoa.
The powers of receivers are also to issue receipts for income received in respect of the property in receivership.
Tu’i’onetoa insisted that the Bill deals only with the business people who cannot afford to repay debts and a receiver steps in to recover debt collection.
Meanwhile Vava’u 15 MP Samiu Vaipulu had a reservation that donor agencies influenced for a Bill in place as a condition for approval of aid funding to Tonga. The Minister of
Finance, Dr. ‘Aisake Eke refuted the claim and saying Tonga is not controlled by aid donors.
Ha’apai 13 MP Veivosa Taka said the Bill would only benefit the rich people and not the grassroots level.
He also had reservation that such Bill put the people at risk when their loan are being secured by their land.
Dr. Eke thought otherwise and said the poor are not impacted in this Bill.
“It creates revenue in the form of taxation to fund projects like wharf construction in Ha’apai,” maintained Dr. Eke.
Tongatapu 9 was in favour of the Bill for reasons it would definitely help operators to revive their businesses.
On that same note, Ha’apai 12 MP is adamant the Bill is not as it seems as advocated by the Government for the purpose of safeguarding investors that will inject millions to Tonga.
He also maintained the Bill is not applicable here in Tonga for it works well overseas after taking into account their economy.
He claimed the Bill also puts the private properties of those at the grassroots level in Ha’apai on risks as well. In the case of Ha’apai, a local shop owner can acquire a receiver to recover debts and income from creditors for cash flow needed for more supplies for the shop.
Ha’apai 12 MP said the Bill is likely to initiate contracts between the shop owner and customer when purchasing goods on credit in shops
Vili Manuopangai said the Bill will directly impact the most unfortunate ones in his constituency when a receivership is in place.
“When shop owner wants more supplies for the shop and customer are penniless, a receiver may step in to recover debts through possessing the creditor’s private properties like tax and bush allotment. This could break the way of community life in the community,
He also had reservations about clause 15 subsection 2 of the Bill. A receiver has the power to make calls on shares such as uncalled capital. This includes the amount of any unpaid premium payable in respect of the issue of shares.
“I am gravely concerned about this for the sake of the most disadvantaged people. The Cabinet proposed such Bill to safeguard millions of dollars injected by investors into the country yet it is not protecting the interest of its citizens,” said Ha’apai 12 MP
Manuopangai said the purpose of the Bill is good, but it’s not applicable in Tonga.
The Justice Minister corrected Ha’apai 12 MP and said the Bill is setting the rules of the games for a receiver to conduct its business for big corporations.
The Inland Revenue Service Minister Hon. Tevita Lavemaau also asserted MPs it is a good Bill that intends to promote foreign investment in Tonga.
“The Receivership Bill is not intended for private matters for individuals, but it’s targeted to big corporation with a multi million investment potential in Tonga. The Bill also encourages companies and business people overseas to invest in our country,” explained Hon. Lavemaau.
Meanwhile Tongatapu Number one Noble Representative Lord Vaea said this is a very dangerous Bill tabled in Parliament by Government.
“Such Bill impacts our way of life in the society,” said Lord Vaea.
Both Vaea and Samiu Vaipulu as well as Ha’apai 13 MP called for a deferral of the Bill and resubmit it in future for its provisions impact the life of the people.