THE CARETAKER Finance Minister Rick Hou has accused Caretaker Prime Minister Gordon Darcy Lilo for the removal of former Finance Permanent Secretary.
In a statement on Monday Mr Hou said the removal of Shadrach Fanega was based on personal interests.
Mr Hou who came out publically for the first time described recent media reports on the issue as speculations.
“…the fact of the matter is that there was no reason given to remove PS Fanega from the MoFT,” Hou said.
Minister Hou then disclosed that prior to their departure for the overseas trip, the Gordon Darcy Lilo had been insisting on PS Fanega to deal with certain aspects of Pan Oceanic Bank (POB) licence, which the PM had been upset about.
He said, “it is clear the very reason for the removal of PS Fanega was in relation to the POB banking licence and ‘corresponding bank’ or their Relationship Management Arrangement (RMA) with overseas banks.
“But more especially, it was obvious there are strong personal interests in the other application by the Malaysian group. And to decline the application by the CBSI Board did not go down well with those political interests. The PM was not upset about anything else,”Hou revealed.
The Caretaker Finance Minister explained that in addressing the two matters of interest to the PM, the CBSI Governor and the CEO of POB have already explained their respective positions and what they have done last week.
Adding, with respect to the POB banking licence and RMA, it is a matter entirely in the hands of the Central Bank of Solomon Islands (CBSI).
“The law (the Financial Institutions Act) is very clear on this: that applications for banking license, their assessment and the decision to award or decline applications rest with CBSI.
“As explained by the CBSI Governor, the Central Bank has addressed this matter already and the CEO of POB has also made very firm assurances respect to questions about its corresponding bank arrangements and RMA last week,” Mr Hou added
Hou stressed that PS Fanega or any other PS for that matter has no role on behalf of the government on these technical matters.
“It is not clear on what aspect of the POB banking licence and RMA had to do with the PS. And why would the PMO be so interested in how and whether POB obtained its banking license after having passed CBSI’s criteria to obtaining a banking licence,” Hou queried.
The Caretaker Finance Minister said the reason(s) for declining the application by the group from Malaysia for an interim banking license by the CBSI Board has been clarified by the CBSI Governor last week.
“Therefore to demand that the PS deals with the POB issues or the new application, is out of step with the law and could border on political interference with the process of deciding with an application for a banking- licence.
“This will undermine the integrity of the process, which will have negative implications for the strength of our financial sector and is not good for Solomon Islands,” Hou stressed.
Mr Hou said he is surprised and did not see the wisdom in this swift action to remove PS Fanega at this time.
He said it cannot be explained by a reshuffle of Permanent Secretaries. “It simply defies logic,” Hou said.
Hou said it is very sad for the country and its people to see such an illogic action being taken by Lilo.
Hou pointed out that;
1) Given that the political government has been dissolved since 8 September and ministers, including the PM, are only in Caretaker mode, there is no reason to take this unprecedented swift policy action.
2) In any case, the removal of Mr Fanega from MoFT and replacing him with Mr Fakarii serves no useful purpose, least of all to address the issue of POB banking license, the RMA and the new applicant from the Malaysian group;
3) The action has serious implications for both ministries concerned especially given the upcoming general elections. The two Ministries of Home Affairs and Finance & Treasury are at the centre of this event and to have one PS dealing with both ministries at this critical time is unjustified. The action is unfair, does not serve any useful purpose and should not be tolerated;
4) The Ministry of Finance is at the core of the critical issues of the Budget and other financial briefings for the incoming government. Removing the PS, and especially one of Mr Fanega’s calibre, undermines the preparatory work on these important policy matters at a very critical time for the incoming Government;
5) Mr Fanega’s current term expires in December 2014. So there is no purpose for this swift change, it defies normal logic, not to mention there is nothing to be gained out of this for the nation on the eve of his contract ending.
6) From the foregoing clarifications, there is no justification for the action to remove PS Fanega from the MoFT. Even the Chairman of the Public Service could not explain it. This can only be explained by political expedience which PS Fanega was the unfortunate scapegoat;
Minister Hou stressed that while it may be the prerogative of the PM to reshuffle PSs’, it is disturbing and disrespectful that the PS of his Ministry was removed without being consulted.
“The least expected is for the concerned Minister to be informed beforehand.
“Learning of such as very swift action like this in the media to a very important Ministry as Finance, surely sends the message of what the Caretaker PM is capable of doing,” Minister Hou concluded.
Meanwhile Mr Hou described Fanega’s removal a ‘scapegoat’ of personal and dubious motives.
Hou further clarified that the payment of MPs terminal grant is a normal administrative matter which does not require the presence of the PS.
He said it was misleading to suggest that the PS halted the payment of the terminal grants.
“… ln fact before we left for the overseas trip, about 14 MPs have been paid their terminal grants. Moreover, as a matter of procedure and as per Clause 11 A (3) of the Parliamentary Entitlement Regulations (PER), any debt outstanding and owing to the Government shall be deducted from the terminal grant before any payment is made to a member.
“Such deductions include unretired imprests, overpayment of various allowances, withheld payments for unreturned government assets including vehicles and housing etc.
“These are administrative matters which the staff in the Treasury are handling and do not require the PS intervention or physical presence. To insist on the PS dealing with MPs terminal grants in any other way is unacceptable … “Minister Hou said.
Hou explained that the PS was attending the annual meetings of the International Monetary Fund (IFM) and World Bank Group, which he (PS) was an Alternate Governor representing Solomon Islands as a member.
Adding, the trip was funded by the joint secretariat of the two institutions.
“Besides, given the Solomon Islands on-going programs and engagements with these two international financial institutions, it was very important to Solomon Islands that the PS attended these meetings,” Hou added.
He also denied earlier media reports the PS (Fanega) on his returned detour to any other destinations for non-official engagements as reported in the local media.
“ In any case, PS Fanega had made the necessary formal notification of his leaving for overseas on official duty, which he is yet to receive a formal response to his letter for permission to travel overseas,” Hou added.
When questioned last night Mr Lilo as the Prime Minister of the country he has the discretion to remove Fanega or any PS for that matter.
“PM has the discretion under the constitution to remove Fanega or any PS for that matter,” Lilo said through his spokesman.
Lilo through his spokesman said Fanega hasn’t sought his approval before he travelled.
Adding, every PS has to be answerable to the PM like in the case of Fanega and any other PS for that matter.
Lilo through his spokesman stressed that for any public servant including the PSs, they had to seek permission from the Secretary to Cabinet and in turn will seek permission from the PM as the chain of command.
“In the case of Fanega, PM told him not to go, but instead he just leaves. And worst still Fanega has drawn per diem for all that have travelled including himself which is a very serious case. PS Fanega like any PSs for that matter are political creatures. So their posts are political creatures meaning they are at the whim of the government of the day,” Lilo said through his spokesman.
But in response to Lilo’s comments, Mr Fanega described Lilo’s comments last night as unreasonable.
Fanega said if it was not for the issue of the banking licences, his travelling overseas will not be a big deal to Lilo as he had mentioned.
He stressed that his overseas travelling is only an administrative matter, but it became an issue since Lilo wanted him to stay on to deal with the banking license matter.
Fanega said he had not receive any formal decision from Lilo advising him to stay.
Adding, he only received an email from the Secretary to Cabinet a day before he leaves for the IMF meeting.
But he said, there is no point staying because even if he stays, he will not make any difference to what Lilo wants since the decisions on the banking license is being done by the CBSI board and not him although he is a member of the board.
“It is worthwhile attending this important meeting than to stay and do nothing.”
By DANIEL NAMOSUAIA