Political Financing & the BAI Group

Political Caricatures

By L.E. Pep 

In his summing up to the debates on Budget 2019-20, Pravind Jugnauth raked through the so-called clean image of the MMM by pointing out its “géométries variables” on corruption. He mentioned the Rs 10 million obtained from Dawood Rawat’s BAI group for the 2014 general elections. He attacked an ex-MMM member, the late Bidianand Jhurry who was convicted for having favoured the hiring of five of his relatives in the Sugar Industry Labour Welfare Fund.

That seems to be a desperate attempt by the MSM government, one that has been lurching from one embarrassment to another and suffering from an ethical and governance deficit over the past four years, to detract attention from its infamous track record as regards the fight against corruption – a cannonball that it will have to drag along for years.

But MP Shakeel Mohamed did remind the Government in his speech on “Political Financing Bill”, that the MSM had also obtained financial donations totalling Rs 19 million before and after the elections of 2010. The MSM has cashed contributions amounting to Rs 10 million from the BAI Group before the elections of May 2010 — Rs 5 million on 21 April 2010, and thereafter another Rs 5 million a week later, that is on 28 April 2010.

Most surprisingly, the MSM also received generous donations even after the elections. Rs 2 million were paid into the MSM account by the BAI group on 24 August 2010. On 1 November 2010 and 23 November 2010, the sun party benefitted from two new contributions of one million rupees each. For what reasons? Will we ever know?

Similarly, will we ever know the truth about the barter that allowed the MSM to build the Sun Trust Building on land owned by the late Sir Deo Dookhun and also the construction of the Blendax House at the historic site at Dumas Street?

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The ex- workers of Texto Ltd still awaiting their compensation

In December 2017, one week before Christmas, 450 workers at the Texto Ltd were declared redundant. A year and a half later, they are still waiting for their compensation. Atma Shanto, their negotiator, recalls that the directors had turned to the Supreme Court for the necessary authorization to sell their assets to pay the creditors, as well as the workers. But to this day, he says, it’s still unresolved, hence the demonstration in front of the Ministry of Labour.

Following the closure of Texto Ltd, the Mauritian workers were first placed under the Workfare Programme, while expatriates were redeployed to other factories. They demonstrated in front of the Ministry of Labour several times and meetings were organized with officers of the Ministry. However, no solution has been found to date.

For Atma Shanto, these workers must be considered as creditors. Mention had been made about this in the complaint lodged in the court case, he said. “The ex-workers are creditors by virtue of the money representing the compensation owed to them by the company. They must know how much money has been recovered, how much has been paid to the financial institutions and how much is left for the workers”.  When the corporate sector is in financial distress and facing all kinds of difficulties, the government is very expeditious with its supportive schemes – Speed to Market, reduction of corporate tax, depreciation of the rupee –, but when workers are concerned, they are made to wait indefinitely to obtain their dues!

The proposed Workers’ Rights Bill will be providing a Wage Guarantee Fund which will guarantee remuneration of up to Rs 50,000 to workers who lose their jobs in case of insolvency. Government can meanwhile make an effort to advance to the workers their compensation dues.

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Six out of 10 Mauritians think corruption is on the rise

According to the Global Corruption Barometer Africa 2019, prepared by Transparency International and Afrobarometer, 61% of Mauritians think that corruption has increased in the previous 12 months and 62% believe that the government is doing a bad job of tackling corruption.

The Barometer reveals that “most or all people” in the following institutions are corrupt: ‘Members of Parliament’- 23%; ‘President of the Republic/Prime Minister’-22%. It is 18% for ‘Local Government Officials’, 19% for ‘police’ and 13% for ‘judges and magistrates’.

However, respondents believe that corruption has declined in some areas compared to four years ago. They cite the police (-3%), religious leaders (-3%), public sector (-2%) and business owners (-4%) whereas in all other categories there has been an increase. The most prominent increases relate to ‘members of parliament’ and the ‘President/Prime minister’ categories.

If in 2015, seven out of 10 people were of the opinion that the government had failed in its fight against corruption, they are now six out of 10 to be of this opinion.

On the African continent, Mauritius maintains the lowest rate (5%) in the Overall Bribery Rate, followed by Botswana (7%), Cape Verde (8%) and Namibia (11%).

A majority of the 47,000 Mauritians polled, from different levels of society, think that reporting corruption can lead to change; they also believe that ordinary citizens can make a difference in the fight against corruption.

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Plaines Wilhems Sewerage Project: Fleecing the taxpayers!

The Plaines Wilhems Sewerage Project cost for Lot 1A, covering the regions of Stanley, Palma, Hugnin, Bassin, Trefles and Victoria was hiked by some one billion rupees. The initial project targets were not met and house connections were done where there were no street sewers. House connections were therefore being made to non-existent street sewers. The cost overrun represented 40% of the original contract value, which was not in compliance with the Public Procurement Act. At the end of the project, only 6,800 houses instead of 13,000 had been connected to the public sewer.

The Public Accounts Committee noted that “the scope of the bid was open to abuse as the value of the works was based on a design that had to be prepared and finalized by the contractor after the award of the contract.” It concluded that “there was gross negligence both at the level of the parent Ministry and at that of the WMA (Waste Management Authority) in assessing the scope and value of the works prior to inviting bids for the project.”

Despite requests from both government and the opposition, why is it that up to now there has not been any inquiry and appropriate actions initiated? The Deputy Prime Minister’s answer to a PQ on the project that “the reports which I have quoted talk of gross negligence. They did not talk of any fraud… There has been, for the moment, gross negligence. If prima facie evidence of fraud were to surface, of course, that would have been a different matter…” is not convincing.

This is yet another creative, artful, immoral and surely illegal way the taxpayer is being fleeced. But who cares? Whether it amounts to negligence or fraud, the fact is that no action is being taken and the same process will go on and on… at the expense of taxpayers.

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 “This government is 10 times worse than the PTr”: Ashok Subron

“If Pravind Jugnauth and Soodesh Callichurn seek a fight, they will have it.” This is how Ashok Subron describes the position taken by the Prime Minister and the Minister of Labour in relation to the new Workers’ Right Bill proposed by the government. Rezistans ek Alternativ believes that if the workers entertained any doubts about which party to vote next time round, the latest government’s proposals about workers’ rights should help them take the right decision.

Though Ashok Subron believes that there are some good measures in what the government is proposing in the bill, however, there are important provisions therein which undermine the fundamental ‘acquis’ of the workers. Ashok Subron draws our attention to the several derogations in the Workers’ Rights Bill, which many people, including trade unionists, may not have noticed, namely Clause 3 of the bill, which in Part (d) states that “The Act shall not apply to a term of employment governed by a collective agreement or conditions of employment made in a salary report, by whatever name called…”

“These are threats to workers,” says Subron. He is also against the “concession bargaining” which will put employers in a position of strength vis-à-vis workers. He is also of the view that the Portable Retirement Gratuity Fund (PRGF) will not affect companies that already have a pension fund. “I think that in many companies, instead of the PRGF, employers will come with pension plans that are more advantageous to them.” In addition, he says, the amendments do not specify what the employer’s contribution will be.

For all these reasons, Ashok Subron is asking the Minister of Labour not to go ahead with these two pieces of legislation and to instead bring in experts from the International Labour Office for a more in-depth study of the two bills.

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The BOM’s Board: Rubber stamp?

The proposed amendment to the BOM Act authorizes the use of the Special Reserve Fund (SRF), in exceptional circumstances and with Board approval, “for repayment of central government external debt obligations, provided that this is not likely to adversely affect the efficient discharge by the Bank of its functions under this Act.” This additional use of the SRF is also placed in third order of priority after any use for increasing paid up capital or for monetary purposes.

Thus, the responsibility now lies with the eight members of the Board of Directors of the BoM who must, at the end of the day, approve or reject this recourse to the SRF. The chairman of the board, Yandraduth Googoolye, his two deputies, Dr Renganaden Padayachy and Vikram Punchoo, as well as directors Said Toorbuth, Antoine Seeyave, Sanjay Gopaul, Ranapartab Tacouri and Axel Pellegrin, will be deciding whether to align themselves with the government’s position, going as far as jeopardizing the independence of the BOM.

But is our central bank really independent? It is the Prime Minister and the Minister of Finance who chooses who shall sit on the Board without any provision for checks and balances. Many of them may not be able to discern the complexities of the proposed amendment to the BOM Act and the raiding of the Bank’s SRF and its implications not only on the principle of central bank’s independence but also on the central bank’s credibility for the proper conduct of monetary policy. Indeed, the proposed BOM Amendment could be misused and potentially open the floodgates to excessive money financing to Government.

As pointed out by Sushil Khushiram in this week’s article titled: ‘Busting the Bank’, “any BOM money financing should not be approved by the Board without a prior review of the economic capital framework of the central bank. The adequacy of risk provisioning and of the capital and reserves of the BOM should be determined on the basis on a full and detailed assessment of its balance sheet risks, in the light of best practices adopted by central banks worldwide. In the absence of this knowledge, the BOM Board will be unable to resist pressure to become a rubber stamp for Government money financing.” 

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Safe City project at the cost of a frustrated Police Force 

The members of the Police Officers Solidarity Union (POSU), in a meeting with the press, last Friday, spoke of several problems that persist in the police force, particularly with regard to promotion exercises and the recent recruitment of about 20 Cadet Officers.

According to the president of POSU, Inspector Jaylall Boojhawon, the frustration in the police has reached a new high. “In 2018, 71 police officers were appointed to various posts, from chief inspectors to assistant police officers. However, the majority have been ‘assigned’ and have not yet obtained their confirmation, some have been confirmed while the majority is still pending. There appears to be a pick-and-choose system at work and no transparency,” he said. The police commissioner wants the police graduates to gain experience in their respective postings before being confirmed. This is a first in the police force; usually, police officers are promoted and confirmed after a short probation period.

Inspector Boojhawon also lamented that the recruitment of about 20 young university graduates as Cadet Officers who were selected directly by the Deputy Assistant Superintendent of Police (DASP), is turning out to be another source of frustration as police officers with experience and long years of service have never been promoted.

He also criticised the misuse of police officers concerning the Metro Express project. The government has paid billions to Larsen and Toubro and it is up to this company to find the people to watch over the Richelieu depot at Petite-Rivière. Why having recourse to the police who are not being paid any extra duties to watch over the subway depot?

Billions of rupees are being swallowed up by the Safe City project in the networks of closed-circuit television (CCTV) cameras. How can we aim for greater security if this investment is being done at the cost of an effective police force? What are required are better pay, more police patrols, more sophisticated police equipment and more importantly a strong morale and willingness to provide service with understanding, response with compassion, performance with integrity and a law enforcement with vision to protect life and property, prevent crime and reduce the fear of crime.


* Published in print edition on 19 July 2019