Sushil Khushiram
Sushil Khushiram

One of the main objectives of the Commission of Inquiry on the sale of BAI shares to in Britam (Kenya) was to inquire and report on whether this transaction involved any fraud, corruption or financial prejudice. This article is essentially meant to save the reader from having to plough through a voluminous Report that fails to meet basic standards of inquiry, besides being infuriatingly repetitive.

Not Unarguable

The last page of the Report provides a baffling conclusion – “That there has been a prejudice in the sale is not unarguable: a sale valued at MUR4.3 bn was sold at MUR2.4 bn”. The use of the double negative is bewildering. “Unarguable” means indisputable or incontestable, and “Not unarguable” means the opposite. The Report thus concludes that the existence of prejudice in the sale is disputable or contestable.

But the ensuing words, that a sale valued at Rs4.3 bn was sold at Rs2.4 bn, imply a prejudice, namely a financial loss of Rs1.9 bn on the sale, as repeatedly contended all the way through the Report. To err is human, but the Report’s incorrect use of the double negative is a characteristic Freudian slip which reflects the contents of the 352-pages Report – confused and mistaken on the key issue at stake.

Nairobi Meeting, Nov 2015

The sale was made at Rs2.4 bn, but the Report tries to establish that the value of Rs4.3 bn, an amount equivalent to a non-binding buy offer by MMI Holdings of South Africa, represented an alternative sale price. The Report builds its case on the wrong interpretation that Kenyan buyers made a binding offer to buy the shares at Rs4.3 bn at a meeting held in Nairobi, Kenya, on 18 November 2015, chaired by the Chairman of Britam Kenya, and attended by two finance officials of the Govt of Kenya, and Mr V. Lutchmeeparsad, Permanent Secretary (PS), Ministry of Finance, Govt of Mauritius.

PS Deposition and Notes of Meeting

With regard to this meeting, the deposition of Mr Lutchmeeparsad at paragraph 502 of the Report reads “ In reply, the Chairman, Mr Munga, said that Britam was an important institution in Kenya, and they were not agreeable that a foreign investor like MMI Holdings came to purchase the shares in Britam as they had their own strategy and vision which might not be compatible….the Chairman imparted to him that, after consultation, “there is a probability that the Britam Kenya shares would be purchased by themselves, by their shareholders at the same price at MUR4.3 bn”. That “there is a probability”, as reported by Mr Lutchmeeparsad, is far from denoting certainty.

Mr Lutchmeeparsad did not produce his own notes of this meeting, which should have been submitted to the Ministry of Finance. He instead provided a copy of the notes of meeting handed to him by BDO Kenya, which includes the following: “He (the Chairman) went on to say that some of the current shareholders of Britam Kenya are willing to buy the shares at the same valuation as MMI has offered, but they wanted a longer payment period”. These notes of meeting carry a stamp of the Permanent Secretary, Ministry of Finance, but are unsigned.

It is on the basis of these unsigned minutes of meeting that the Report spins a conspiracy theory, starting with an imaginary binding Kenyan offer to buy shares at Rs4.3 bn, and by disregarding the PS deposition that this was only a “probability”. Besides the deposition of the PS, the existence of a firm buy offer of Rs4.3 bn is disproved by (a) letters from the Kenyan authorities and Britam Group, and (b) the deposition and views of the Financial Secretary (FS), Ministry of Finance, Govt of Mauritius.

Letter from Kenyan Treasury, Dec 2015

Less than a month after the Nairobi meeting, on 11 December 2015, the Cabinet Secretary of the Kenyan National Treasury wrote to the FS about forthcoming negotiations, including on the sale price. Para 1157 of the Report reproduces an extract of the letter as follows: “My understanding is that the Board of Directors of Britam will need to make arrangements to have negotiations with the Government of Mauritius in order to agree on the suitable timeframe within which the sale will be effected as well as the sale price and payment terms”. This letter makes clear that the sale price was still to be determined, and that the Kenyan buyers were not committed to buy at Rs4.3 bn.

Letter from Britam Group, Jan 2016

On 12 January 2016, the Managing Director of the Britam Group, wrote to the Financial Secretary, reproduced at paras 801 and 802 of the Report as follows: “We are consulting on the proposed transaction and expect to conclude the process by mid-February 2016 ……for a follow up meeting with you during the week of 15th February 2016 in Nairobi to finalize discussions on this matter”. Again, this letter from Britam shows there was no commitment on the share purchase value, as consultations and discussions were ongoing.

FS Deposition

The FS was a principal actor in the sale transaction, as the executive head of the Ministry of Finance, Chairman of the Financial Services Commission, and an active participant in the meeting with the Kenyan buyers in Mauritius in March 2016. In his deposition to the Commission, he states at para 515 of the Report, with reference to the MMI Holdings offer of Rs4.3 bn, that “Unfortunately, the Kenyan authorities were not agreeable to selling the shares to a South African firm. At para 516, he is categorical that “there was no documentary evidence in support of the agreement of MUR4.3 bn by the Kenyans”. The Report retains from the FS’s deposition, at para 524, the fact that “There is no document to show that the Kenyans had made a firm offer to buy the shares at MUR4.3 bn.”

A statement by the FS on the evaluation of the sale price of shares is not reproduced in the FS’s deposition but at para 1034 of the Report, namely: “a third method is that, if that is the best you can get, even 2.4 may have been the best price. If it is the only offer you are getting, the best become the only offer.” If indeed there were two offers on the table, the FS would have no need to comment about the best offer being the only offer.

While the Report tries to downplay this statement by the FS, it is fully endorsed by the FS’s participation in the meeting with the Kenyan buyers to finalize an MOU dated 12 March 2016, at a sale price of Rs2.4 bn. The Mauritian negotiating team, including the FS, agreed to Rs2.4 bn as the best price because it was only the only offer. As the chief executive of the Ministry of Finance, and a guardian of the best financial interests of Mauritius, the FS would not have agreed to this sale transaction, if there was another better offer.

If the Commission doubted the relevance of the FS’s statement about the best offer being the only offer, the Commission should have asked the FS straight questions about whether there was another better and firm offer of Rs4.3 bn, whether Rs2.4 bn was the best value obtainable, and whether he agreed with this valuation. Doing so would have contributed to dispel any misinterpretation of the Commission about a hypothetical alternative share sale valuation at Rs4.3 bn. The Commission has not been diligent in its duty to properly inquire and clarify a fundamental issue.

Governance issues

The Report deals at length with a host of other issues, mostly on shortcomings in good governance, such as the failure to (i) ensure Cabinet notification and/or clearance for introducing amendments to insurance legislation and for proceeding with the sale transaction, (ii) appoint an independent transaction adviser, (iii) let the special administrator act independently, (iv) abide by proper procedures for the sale transaction, (v) keep records of meetings, and more.

While these observations on governance failings are no doubt relevant and important, the Report is biased in focusing unduly on the driving role and responsibility of the Minister of Financial Services in concluding the Britam sale transaction. To emphasize his role, the Report goes overboard in minimizing the responsibility of the then Minister of Finance and Prime Minister.

First, by referring to the alleged health problems of the Minister of Finance as from February 2021 – going “from tarmac to clinic”, which seemingly led to his departure as Minister on 14 March 2016, i.e., after the signature of the MoU on 12 March 2016. The reason for his departure, as is well known, is more sordid. In any case, the then Minister of Finance was never heard saying anything at the time about the Britam share price valuation. Although he did then express himself rather forcefully on the issue of probity, stating that he did not hold deposit accounts in Hong Kong, unlike others.

Secondly, by ignoring the role of the FS, who represented the Ministry of Finance in meetings held to conclude the Britam sale transaction. As if the FS is a weak and unproven public official, acting as a rubber stamp for an over-zealous minister. The late ex Deputy Permanent Secretary of the Ministry of Financial Services states otherwise in his deposition to the Commission. At para 477 of the Report, he says that there were numerous meetings on the sale of Britam shares, and that “The meetings and discussions were driven by the Minister and the FS”.

And thirdly, by not highlighting the imprudence and recklessness shown by the then Prime Minister in entrusting his Minister of Financial Services with an overriding responsibility to handle the dismantling of the BAI. Although the Nicky Tan Report commissioned by the Bank of Mauritius established that the BAI business was tantamount to a Ponzi scheme, there were other courses of action available to salvage BAI and avoid burdening Govt and the country with a wreckage bill of more than Rs20 bn.

Political Agendas

The Commission has incautiously waded into a political minefield. The Britam share sale is a corollary of the BAI undoing. The Commission is aware that the governance shortfalls raised in its Report apply to the conduct of the whole BAI saga, starting with the revocation of Bramer Bank’s licence. Including the appalling admission of the then Prime Minister that he had cashed out his deposits in time.

The Commission must also be aware of allegations that the BAI affair was politically motivated, with the aim of disposing of the key financial backer of a major political opponent. At that time, a prominent and respected trade unionist publicly warned the then Minister of Financial Services in a one-to-one radio debate that he was acting as a henchman for the ruling family.

The Report is serving the current Prime Minister in tackling a political rival, a former over-ambitious colleague who represented a threat to his accession to the throne. The Mauritian public is not that gullible, and knows the nature of the game – Je te tiens, tu me tiens, par la barbichette, or Britam versus Angus Road.

The day may come when both of them will have to explain their antics, like why they were jointly meeting Dufry representatives in the Attorney General’s apartment in the dark of the night. On that occasion, they were, to use one the many burlesque expressions of the Report, tight as tether.


The Report’s contrived effort to demonstrate the existence of fraud, corruption and financial prejudice in the Britam share sale does not stand the test of credibility. Meanwhile, the political circus goes on while the country edges ever closer to a serious economic and social crisis.

(Source – L’ / Blog)

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