Reserve Bank Directors Cleared in Landmark Corruption Appeal
The directors of the National Reserve Bank of Tonga (NRBT), including the former Governor, have successfully overturned a legal challenge brought by the Anti-Corruption Commissioner (ACC) regarding a controversial staff bonus payout.
In a significant judgment handed down on November 20, 2025, the Tonga Court of Appeal dismissed the ACC’s proceedings, putting an end to the closely watched corruption case.
The case stemmed from a decision by NRBT directors to pay a bonus to the staff (excluding the Governor nor the Board) following a period of record net profits (approximately $20 million in FY2023 and $30 million in FY2024).
Initial board minutes recorded the bonus was agreed upon “to mark the record profit for the FY2024”.
The ACC challenged the payment, arguing it was illegal and constituted misfeasance in public office, as it allegedly contravened Section 16B(4) of the NRBT Act, which prohibits remuneration from being “based on the Reserve Bank’s profits or any type of revenue”.
“The directors later reframed the payment as a “one-off 35th anniversary commemorative payout” for staff recognition, and sought legal advice to ensure compliance.
The Court of Appeal’s decision centered on the interpretation of the phrase “based on.”
“The Court held that while the one-off staff payments were undoubtedly “linked to” the Bank’s profits, a simple link was not synonymous with the payment being “based on” profit.
“The bonuses were paid as a fixed, flat sum, independent of the quantum of the profit, and thus did not fall within the specific mischief s16B(4) was intended to address.
Crucially, because the payment was found to be not clearly illegal, the ACC’s core allegation that the directors acted dishonestly or in bad faith—a requirement for the serious charge of misfeasance—was deemed “untenable”.
The Court noted that the NRBT Governor had actively sought and obtained legal advice to confirm the payment’s legality, which provided strong justification for the directors’ actions.
The Court of Appeal allowed the appeal and ordered that the ACC’s application for judicial review and all associated claims against the Bank and its directors be dismissed.
