Tit-bits: Education

The Minister may be right in preferring a studious, even cautious approach where complex questions call for it, but incumbents, lobbyists, administrators, trade unions, stakeholders and inertia risk soon to swathe the incumbent in short-termism, micro-management, problem-solving and fire-fighting

We were among those who believed that the education, research, technical training and human resource development portfolio, however vast its combined scope and the institutions under its purview, led by an articulate and knowledgeable campaigner, held hope that an articulated vision and a coherent road-map for change could be in the pipeline. True, in an era of ad-hoc political nominees and appointees, the couple of nominations at operational and institutional level have not shocked. But neither the grace period, nor the budget exercise, nor even the follow-up activities of the Ministry, demonstrate convincingly that authorities have yet got to grips with planning the future.

It is not rocket science yet one feels that the novelty of the first few months in office will soon wear off. The Minister may be right in preferring a studious, even cautious approach where complex questions call for it, but incumbents, lobbyists, administrators, trade unions, stakeholders and inertia risk soon to swathe the incumbent in short-termism, micro-management, problem-solving and fire-fighting. Budget allocations to tertiary institutions and the recent warning note issued this Tuesday, from the Ministry to State Colleges, whatever the merits of content or method, seem to exemplify the point. We earnestly hope future actions will prove us wrong.

* * *

BBC saga

In the Bramer Bank-BAI Group saga, we have been witness to a spectacular series of events and several storylines seem to emerge. The first is the official line taken by SAJ and the Minister of Finance, which says government became aware of a massive “Ponzi scheme” running into 25 billion Rs or more, likely to cause huge damage to the financial system, bank depositors and insurance policy-holders imposing urgent steps to prevent such comprehensive damage while restoring minimum trust of the public.

The Bramer Bank was short of liquidity, failed to inject requested cash reserves and its balance sheet was weak, explained later the newly appointed Governor of the Bank of Mauritius and its banking licence was consequently withdrawn. “Incestuous relationships” between the Bramer and its affiliate BAI meant immediate prudential appointment of Conservators at the BAI to safeguard policyholders. Receiver-managers and conservators have now to establish or confirm the real state of finances, assets and liabilities in both institutions and their network of interlocking companies, a giant maze.

Nobody would quibble with a government, saddled with alleged unexpected urgency, trying bravely to stem such an impending implosion that could fell down many sister companies in a complex web of entities under the BAI umbrella. Neither with a ruling regime that was riding a campaign pledge of “met l’odre” in all manner of institutions, which it said had become derelict in their normal duties, most notably the Bank of Mauritius, the Financial Services Commission, the MRA or the Financial Intelligence Unit.

Few in the local oligarchy and conglomerates, who have assisted to the rise of an astute businessman with international connections, who started his business and fought for a place under the local sun thirty years ago would really sympathise. Neither the Leader of the Opposition in Parliament. The international community, rather blasé with our repeated stories of uncertain banks and their inevitable closures, often at public purse costs, including the likes of Delphis, BCCI, Habib Bank (Zurich), South-East Asian Bank, BNP (IO), would barely twitch more than an eyebrow, more of the same!…

What seems to emerge is that the BAI Group developed its wings in the early years of this century, expanding its ambit, perhaps overstretching itself and surely far too reliant on internal support between sister companies, most notably the BAI and Bramer Bank. Some papers have reported that the scale of internal lendings had reached an astounding and thoroughly unhealthy 85% in 2005 and decreased progressively in the past fifteen years to 58% in December last.

Were this the case, internally fuelled growth of the Group and its expansion have occurred under the stewardship of several Ministers of Finance and the plethora of regulatory institutions, none of whom had seen evidence of today’s reported scam or “Ponzi” schemes. Were blame to be dished around, there would be lots of accounting required since at least 2000. Former Finance Minister Xavier Duval and receiver-managers have been extremely cautious towards allegations of a Ponzi scheme even before any due diligence and forensic examination has been conducted.

Information trickling out suggests that the Bramer Bank may have been placed in a difficult treasury position late last year through removal of government funds and the consequential spread of rumours that prevented Bramer from raising inter-bank liquidity locally. Aside from possible management excesses, this was the chink in the BAI-Bramer armoury and some may rightly feel that neither intra-Group relations nor over-reliance of the Bramer on government placements were sound policy in the first place.

Be that as it may, it simply exposed the Group to political vagaries that could be exploited to the hilt by any incoming government. As matters stand in such a complex setup of high finance, the increasing popular perception is that the Lepep government felt it within its mandate to do so and this is a disturbing variance with the official storyline.

* Published in print edition on 11 April  2015

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