Speak up, Vishnu!

Editorial

We are not yet done with Vishnu Lutchmeenaraidoo. For reasons that have to do with the public interest as they relate to decisions taken by the current government since it unexpectedly come to power in December 2014 and which will have a bearing on public finances for years ahead. Whatever the reasons that ultimately led to his resignation, after his having exercised ministerial responsibilities for more than four years, and humiliated himself personally, Vishnu Lutchmeenaraidoo has been privy to decisions that have jeopardised considerably our Global Business Sector, destroyed the BAI the cost of which to the Public Exchequer is now coming out and which may run into billions of rupees; there is also the termination of the Betamax-STC contract, which adds up to another Rs 4.5 billion following the award of the Singapore International Arbitration Centre.

Whether he will indeed respond to SAJ’s mocking remarks following his resignation as he has promised to do is neither here nor there. What is of interest to us is that he comes out publicly and enlighten public opinion on the reasons why the tandem that he and Sir Anerood Jugnauth constituted has not been able to produce the so-called second economic ‘miracle’ that they had so vehemently promised to the electorate in December 2014 and what came in the way of the Government fulfilling its obligations towards the population and instead took decisions rashly, the cost of which may run into billions to the Public Exchequer.

The present government is almost nearing the end of its mandate. If one were to assess its balance sheet so far, the picture is one of more liabilities than assets to show. We have ourselves condemned it when, caught up in the web of power, it took certain decisions which appeared anything but constructive. We have pointed out in these columns, for example, how clumsily it had handled the BAI affair. Lack of legal discernment caused it to unilaterally repudiate the Betamax contract. We were critical when the government attempted to undermine the Constitution, for instance, in its dealings with the Office of the DPP. We expressed our concern with the arbitrary manner in which certain persons were being arrested under ‘provisional charges’. That is why many cases shoddily investigated by police had to be abandoned, undermining the credibility of public institutions.

At the time of dismantling of the BAI group, a then-minister of the government had promised that all dues will be paid back to policy holders of the insurance company without spending any rupee from the public Treasury. It was later announced that there were insufficient funds from the residual assets of the BAI to meet those BAI obligations towards policy holders, including those of little means who had invested their lifetime savings in dashing schemes like the Super Cash Back Gold (SCBG) insurance policies of the former BAI. It’s now coming out that the cost to the Public Exchequer, as pointed out by our contributor Rattan Khushiram last week, is likely to run into Rs 20 billion.

All this reflects a messy management of a bad situation in the BAI Group, aggravated by rash political decisions to precipitate its downfall as a political show, not as a well-advised and coolly calculated regulatory action intended to sustain public confidence in our financial institutions.

On the other hand, there is also the Betamax case involving a breach of contract by the government. The Singapore International Arbitration Centre (SIAC), which was in charge of deciding the case between Betamax and the State Trading Corporation (STC), involved in importing several commodities including petroleum products, gave its decision in favour of Betamax. Accordingly, the STC would have to pay damages amounting to between $115-125 million (Rs 4.1-4.5 billion) to Betamax for unjustified breach of contract. The matter is now before our Supreme Court, and a decision would be forthcoming soon.

It will be recalled that one of the first dossiers the government took up after assuming power was the contract given out to Betamax by the STC under the preceding government in 2009. It tried at first to negotiate Betamax out of the country’s petroleum transportation contract in January 2015, on the ground that the contract had been awarded unlawfully thanks to a device consisting of amending public procurement laws and singling it out for privileged contract allocation. To no effect, since, as advised to the government by the State Law Office previously, the contract had been made fully compliant with the changed legal dispositions.

The fact now is, as established by the Singapore Arbitration Centre, that the Lepep government would have acted in breach of law by rescinding the contract, for which the State is now called upon to pay enormous damages. This means that those frontline ministers who insisted in early 2015 they were right to rescind the Betamax contract unilaterally, were not competent. It is they who have landed the country in this bad plight.

The country is paying the price for a situation where power goes to the head of politicians who think that they can get off scot-free no matter which questionable decisions they take, how they twist existing laws and rules to suit momentary conveniences and how they explain away controversial decisions they take as it suits their preferences. So, the present situation – and similar other forthcoming cases for damages in view of wrongful decisions taken by office holders – not only has significant monetary impact on the country. It is also symptomatic of a state of affairs in which politicians feel free to take arbitrary decisions and undermine public institutions, no matter how much it bleeds the public purse eventually.

It is just too easy for politicians to resign or made to step down and get away scot-free. It is time for the country to seriously think of passing legislation that will do away with such misbehaviour and make then stand up and be legally accountable for the harm they have caused while in office. If South Korea can charge and convict a sitting President, and Israel can do so with an ex-President, there’s all the more reason than a small island like ours with limited resources that are being diverted away from the people should be able to do so as well. And the sooner the better.

So Vishnu Lutchmenaraidoo had better speak up and tell the people what it ought to know so that it can seek due redress.

* Published in print edition on 5 April 2019