Every government over the last 30 years has been vocal about its willingness to fight financial crime. Yet not a single member of the national assembly nor any politician, has ever voiced concern over the most blatant altar of financial crimes – The Stock Exchange of Mauritius (SEM). Alongside the Bank of Mauritius (BOM) and the Financial Services Commission (FSC), the Stock Exchange of Mauritius forms the trinity every white color crook would venerate.
While some critics dismiss the Stock Exchange of Mauritius (SEM) as a paltry bazar, it remains an hypostasis in crystalising every pilfering attempt. With an economy hooked on dirty money and institutions, regulatory bodies, enforcement agencies all either failing due to incompetence or happiliy abetting crime, the country shares vivid resemblance with the landscape of good old rogue far-west of the 19th century.
The story of United Investment Limited unfolding since a while, is there for everyone to see. Yet politicians both parliamentarians and extra-parliamentarians turn a blind eye. Neither the ponzi-sniffers from the purple kennel nor the snippers trenched within newsrooms would dare to utter a word. Afterall names like Michel, Guy, Rivalland are hard to pronounce.
The UIL debacle is a clear substantiation of: a) how compromised our regulators are and b) the extent of the rot within the trinity whose mandate is to protect depositors, investors by ensuring fairness and transparency within the market. Far from being accidental failures, the system itself consists of inbuilt mechanisms crafted to serve the interest of oligarchs and cronies.
The entities set up by UIL is a clear example of how shifts and complex structures can be utilised to conceal activities and drown funds within the myriad. None of the regulators deemed appropriate to inquire into related party transactions. By parking UIL into voluntary administration, perpetrators of the crime stand exempted from any liability. As the mastermind of the whole plot walks away scott free leaving behind stranded investors, this marks the final act of scuttling of a conglomerate which has been running a ponzi for years. Even more outrageous, he walks away unbothered by regulators with a prized portfolio of market intermediary licences. A ghastly contrast when comparing the zeal applied by the trinity when breathing down the neck of other brokers, investment advisors, portfolio managers and ill-fated corporates such as British American Investment (BAI).
Never throughout our history has there ever been so many consecutive postponements of publication of Audited Financial Statements by a listed entity. Why such leniency by the SEM ? Wouldn’t it be fair for shareholders having incurred massive losses, believe perpetrators at the UIL were merely being given time to unfold their hideous exit plan ? The very SEM which played mute, when SUN Ltd flouted the listing rules by failing to announce its dealings while plotting with the MIC, for a takeover of Eastcoast Ltd. A pathology far too obvious to be mere coincidences , unless suffering from acute schizophrenia.
The agreement reached between Omnicane and UIL Asset Finance Ltd to acquire 100% shares in Spice Finance Ltd is even more intriguing. The southern conglomerate had been incurring significant losses prior to 2020. Its revival was solely possible after the sale of assets ( land) to the Mauritius Investment Corporation (MIC) in a transaction valued at MUR 4.45 billion. Despite the transaction being flagged in October 2023, no investigation has been initiated by any of the enforcement agencies nor regulators. So let’s recap - While MIC bails out Omnicane, BOM not only disapproves the need for an investigation into the land acquisition but also plays mute when the UIL crisis breaks out, despite one of its entities runs a Deposit -taking license. At the end Omnicane walks away with the only valuable asset of the UIL group by forking out approximately MUR 525 m which fall short of the 2024 turnover of Spice Finance ltd (MUR 538.5 m).
No wonder the deal between Omnicane and UIL Asset Finance ltd requiring consent of the FSC will be given red carpet treatment. The very same FSC which slumped into hibernation since November 2024 leaving stakeholders in disarray will be bubbling to serve the happy few. By accumulating experiences such as Alvaro Sobrinho, NMH and systematically applying double standards, the FSC has lost the trust of most stakeholders. And as matters stand, the worse is looming ahead.
One of the primary obligations of regulators is to ensure compliance with global sanctions regimes to prevent financial institutions from engaging in business with sanctioned individuals or entities. A diligent investigation by Financial Crime Commission (FCC) on the Mercantile & Maritime Ltd dealings with the State Trading Corporation would uncover a mind-blowing nexus involving the ghost ships sanctioned by the international community. Sources affirm some of the ships bear Mauritian registration obtained through global business companies regulated by the FSC. An oversight, if confirmed might well earn our jurisdiction a berth on every black list.
Deliberate inaction, blatant support to big corporate players disregarding ordinary investors, failure to regulate have resulted in eroding public trust in all enforcement agencies and regulators. Stories like UIL will only foster further distrust and the solution would not be finding a counter narrative but rather fixing the problem.
A tough challenge, given all politicians along with their cronies have found comfort in the status-quo.