An Unending Saga

Editorial

The unravelling threads of systemic corruption: mauritius grapples with the mic scandal

The unfolding investigations by the Financial Crimes Commission (FCC) in Mauritius are laying bare a deeply troubling narrative: one of systemic corruption that appears to have permeated the highest echelons of power. At the heart of this burgeoning scandal lies the Mauritius Investment Corporation (MIC), an entity created by the Bank of Mauritius (BOM) under the purview of the then Minister of Finance. What was intended as a lifeline for distressed companies in the wake of the Covid-19 pandemic now stands accused of being a conduit for the plundering of public funds, orchestrated through a network of political influence, cronyism, and blatant conflict of interest.

The FCC is carefully and systematically implementing what resembles an encirclement strategy, progressively tightening the net around individuals suspected of involvement in dishonest deals. With each new revelation, the emerging picture reveals a growing scale of alleged fraud, painting a grim portrait of governance where public trust appears to have been flagrantly abused. The sheer volume of questionable transactions surfacing since the MIC’s inception suggests a deeply embedded culture of corruption, where political pressure seemingly dictated the disbursement of substantial funds to companies with close ties to those in power.

The recent revelations concerning the Maradiva Villas Resort & Spa serve as a stark illustration of the alleged modus operandi. Initially reported as a Rs 650 million loan, internal documents now reveal that the total financial assistance extended to Mauriplage Beach Resort Ltd (now Dhyanavartam Ltd) amounted to a staggering Rs 1.65 billion. This places the luxury hotel among the largest beneficiaries of the MIC. It would now appear that the CEO of MIC was the personal appointee of the former Minister of Finance, and that the same CEO had astounding conflicts of interest as Board member on the receiving side. What makes this particular case troubling is that Maradiva was tottering on the verge of bankruptcy, could not service its huge borrowings at other banks (including the SBM) and had to be repeatedly bailed out. No due diligence seemed to have been done either at SBM or MIC levels and what is even more alarming is the timing of the final disbursement of Rs 350 million, approved by the MIC board in February 2024 – a mere few months before the last general elections.

The board meeting minutes of February 5th paint a picture of significant internal dissent and apprehension regarding this substantial financial commitment. Despite the eventual approval, several board members voiced serious doubts about Dhyanavartam Ltd’s financial health and its ability to meet its repayment obligations. One board paper explicitly noted the company’s failure to adhere to the initial debt repayment terms, raising “significant doubt about the group and the company’s ability to continue as a going concern,” as highlighted in their 2022 audit report. This is a damning indictment for a company receiving such substantial public funding.

The then CEO of the MIC, Jitendra Bissessur, allegedly attempted to assuage these concerns by pointing to the timely interest payments made by Dhyanavartam Ltd and the group’s market value exceeding its total debt in January 2023. However, this justification failed to convince all board members. Questions were raised about the valuation of the company’s villas and the proposed interest rate (generously, less than 3.5%) for the investment.

Furthermore, a crucial point of contention emerged regarding a prior Rs 350 million loan obtained by Dhyanavartam Ltd from the State Bank of Mauritius (SBM). The revelation that the MIC funds were intended to repay this existing loan led to the pertinent question of whether the company had approached other commercial banks. The CEO’s response – that the company had reached its credit limit with other financial institutions – raises serious questions about the company’s underlying solvency and suggests that the MIC was indeed a lender of last resort.

Adding to the unease was the disclosure that Dhyanavartam Ltd recorded no revenue for the financial year 2022, an anomaly for an operational business. While the CEO attributed this to ongoing renovations, the lack of income for such an extended period further fuelled concerns about the company’s financial stability. Moreover, details regarding the guarantees provided to secure these massive loans were reportedly insufficient, leaving board members uncertain about the adequacy of the collateral against the substantial sums invested.

Despite these significant reservations and unanswered questions, the MIC board ultimately approved the additional Rs 350 million funding. The decision, made so close to the general elections, inevitably casts a long shadow of doubt over the true motivations behind this investment. Was this a genuine attempt to support a struggling business, or was it a politically motivated move to channel public funds towards entities with influential connections in the lead-up to the polls?

The tentacles of this alleged corruption appear to extend beyond the Maradiva case. The investigation into a Rs 45 million disbursement by the MIC to Menlo Park Ltd just before the 2024 elections has now ensnared the former Minister of Finance, Renganaden Padayachy. Freshly released on bail in connection with the FCC-Ambre hotel acquisition investigation, Padayachy now finds himself under the scrutiny of the Anti-Money Laundering Unit (AMLU).

The AMLU is actively examining Padayachy’s alleged involvement in facilitating the controversial payment to Menlo Park Ltd, a company directed by Mary-Queenie and Stéphane Adam. Testimonies from at least three individuals reportedly implicate the former Finance Minister, suggesting his influence would have been pivotal in securing the MIC board’s approval for this disbursement. The investigation aims to determine whether Padayachy instructed or pressured the former Governor of the BOM, Harvesh Seegolam, and the then CEO of the MIC, Jitendra Bissessur, to expedite the approval of Menlo Park Ltd’s request.

Evidence reportedly suggests a crucial meeting held at the MIC headquarters in October 2024, attended by Seegolam, Bissessur, and the Adam siblings, allegedly played a decisive role in the approval of the funds. The arrest of Seegolam, Bissessur, and the Adam siblings underscores the seriousness with which the authorities are treating this particular strand of the investigation.

These interconnected cases paint a disturbing picture of a potential systemic abuse of power, where public institutions were allegedly manipulated for private and political gain. The MIC, established with the noble intention of providing economic relief during a crisis, appears to have been exploited as a vehicle for questionable financial transactions, raising serious concerns about accountability and governance.

The ongoing investigations by the FCC and now the AMLU represent a crucial juncture for Mauritius. The credibility of its financial institutions and the integrity of its political system hang in the balance. It is imperative that these investigations are conducted with utmost diligence, transparency, and impartiality, leaving no stone unturned in the pursuit of truth and justice.

The Mauritian public deserves to know the full extent of the alleged corruption and to see those responsible held accountable to the fullest extent of the law. The unravelling threads of the MIC scandal are not just about individual acts of alleged wrongdoing; they point towards a potential systemic failure that demands comprehensive scrutiny and reform. The lessons learned from these investigations must inform future governance and oversight mechanisms to prevent such abuses from occurring again. The future prosperity and stability of Mauritius depend on its ability to confront this challenge head-on and ensure that such a breach of public trust is never repeated. The eyes of the nation, and indeed international anti-corruption institutions, are now firmly fixed on the ongoing investigations, awaiting the full and unvarnished truth.

Mauritius Times ePaper Friday 18 April 2025