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Trustee fears Retirement Fund will be by-passed in share of Hawaiki “fruits”

Map of the Hawaiki Cable System
There is confusion surrounding sale of Hawaiki cable capacity

Pago Pago, AMERICAN SAMOA — The ASG Employees Retirement Fund (ASGERF) board of trustees chairman, Va’anatiu Tofala Iafeta has raised questions with American Samoa TeleCommunications Authority board chairman, Iulogologo Joseph Pereira surrounding the sale of Hawaiki cable capacity.

“It is our understanding that none of the 200 gig capacity of Hawaiki cable has been sold,” Va’anatiu wrote in an Aug. 31st letter, following a meeting in July between the ASGERF board and ASTCA board, in which ASTCA shared “clarification of it’s development plan to improve telecommunications in the territory through unlocking Hawaiki cable capacity”.

However, Va’anatiu claims that the ASGERF board left the meeting without clarification of the confusion surrounding the sale of Hawaiki cable capacity.

Iulogologo, who is also the governor’s executive assistant, didn’t immediately respond to Samoa News questions and a request for comments sent over to him last Saturday morning.

ASTCA, owns and operates the American Samoa spur of Hawaiki cable with 200 gig capacity, thanks to funds that ASTCA received under a loan agreement with ASGERF. ASTCA also received a funding allocation from revenue ASG earned from the sales of its bonds through the American Samoa Economic Development Authority (ASEDA) for telecommunication development through Hawaiki cable.

In his cover letter — submitted with the proposed fiscal year 2021 budget to Fono leaders, Gov. Lolo Matalasi Moliga said the investment in Hawaiki cable has already begun to bear fruits. For example, he said agreements have been signed facilitating technology partnerships with other Pacific islands such as French Polynesia. And similar agreements are being negotiated with other Pacific islands.

But based on Va’anatiu’s letter, the French Polynesia government purchased the bandwidth directly from Hawaiki Cable LLC and not through ASTCA — due to the issue of selling bandwidth to a foreign entity.

In his letter, Va’anatiu points out that it’s ASGERF understanding that the “sales transaction recently consummated” between ASTCA, the American Samoa Hawaii Cable (ASH-Cable) and the French Polynesia gov’t was “through the sale of 50 extra gigs” directly from Hawaiki LLC company. (ASG owns 33% of ASH-cable while majority owner is the parent company of Bluesky American Samoa.)

“Since this sale was done outside of the original 200 gigs, it is now clear to the ASGERF board that ASGERF will not benefit from such a sale as per the requirement of the law that granted ASGERF 25% of gross sales of the Hawaiki capacity,” Va’anatiu points out.

“Furthermore, it was made clear to us that the reason for the sale [being] done without using the original Hawaiki 200 gig capacity was that the ASEDA bonds prohibited sales of the 200 gig Hawaiki capacity to a foreign country or entity,” he noted.

“We think it is fair to say that the sale was a deviation from ASTCA’s obligation to ASGERF and could very well be a violation of the statute that requires a return of 25% to ASGERF from its investment in the Hawaiki cable,” Va’anatiu continued.

“We also firmly believe that ASTCA’s agreement with the ASEDA board — and their bond agreement — has no bearing on ASGERF’s entitlement to its share of benefit from the Hawaiki cable,” he points out.

Va’anatiu’s letter hinted to the possibility of this matter going to their legal team, but ASGERF is hoping to resolve it between the two boards.

“We have not yet referred this matter to our legal counsel, as we hope that the distinguished members of both boards — ASTCA and ASGERF — can resolve this matter amicably in a manner that is fair and equitable for everyone involved,” Va’anatiu wrote to Iulogologo, and noted that ASGERF looks forward to a chance for the two boards to meet again.

“We hope for a constructive and meaningful discussion to clarify the issue at hand, perhaps thereby avoiding commitment to any legal interpretation of the issue,” he concluded.