Pravind Jugnauth - Medpoint Scandal

Medpoint Scandal

In 2010, the government decided to buy a hospital and to make it a specialized geriatric center. The cabinet of Ministers approved of buying the MedPoint private Clinic which was owned by Dr Kishan Malhotra and Mrs Shalini Devi Jugnauth Malhotra who is the sister of incumbent Minister of Finance Pravind Jugnauth and daughter of incumbent President Sir Anerood Jugnauth.

In such matters involving large outlay of public funds, there is what is often called a gestation period and procedures have to be strictly followed and no stone should be left unturned. Although the decision to purchase MedPoint, which was not operating as a clinic at the time and still not operating, was taken by the government, in the use of public funds, the government is under obligation to consider whether this purchase is in the public interest and whether all possible measures have been taken to clinch the deal at the best possible price for the public and not for the owners of MedPoint. The government is also under obligation to demonstrate what safeguards have been put in place to guard against matters such as abuse of power, corruption and so on.

The government already had in its possession a Valuation Report for « Land and Building » for Rs75 million conducted by the government department Valuation and Real Estate Consultancy Services (VRECS) and signed Roshnee Bissessur, No.2 at the Valuation Office, a department affiliated with the Ministry of Finance led by Minister Pravind Jugnauth, brother in law of Dr Malotra, owner of ex-MedPoint Clinic.

Mrs Maya Hanoomanjee, then Minister for Health who is a cousin of the Jugnauth family requested, in September 2010, a new valuation for « Land, Building and Services » to be obtained within two weeks with the view to closing the deal in December 2010. Mrs Hanoomanjee’s yet unjustified urgent request prompted Mr Yodhun Bissessur, the Director of the Valuation Department, to write, on 21 September 2010, to the Ministry of Public Infrastructure (MPI) headed by Minister Anil Bachoo requesting the expert help of that Ministry in Quantity Surveying for the purposes of the valuation of ex-Medpoint Clinic, which proposed acquisition was for use as a Geriatric Hospital, bearing in mind that the new valuation had to include Services.

After missed site visit, further correspondence and twists and turns, the private contractors Hoolooman & Associates were hired to conduct the survey and valuation, reason given being that Navin Ramgoolam’s government lacked the necessary quantity surveying human resources to do so. Mr Ramdyal of the Quantity Surveying Unit of the MPI felt the exercise would take at least two months and not two weeks as allegedly demanded by Mrs Hanoomanjee. Also, the new valuation is not said to be confined only to the MedPoint property after depreciation for the purposes of the purchase, but to second hand medical equipment and the cost of a new replacement building at current prices which Mrs Hanoomanjee allegedly wanted, hence her need for a Quantity Surveyor, who is a professional in the construction industry concerned with building costs. Hoolooman & Associates were also originally involved in the construction of the MedPoint Clinic and they valued the Land, Building and Services at Rs.145 millions (US$ 5 Millions). If this valuation contained the replacement cost of the building, the government would have therefore purchased a building which is non-existent and paid the seller for a fictitious building. This in itself should go to the root of the contract and be enough to set it aside.

ICAC, the Independent Commission Against Corruption, was formally requested to investigate what has come to be known as MEDPOINTGATE, or the MEDPOINT SCANDAL, a scandal which has the potential to bring down the whole government. Similarities are already drawn with WATERGATE and IRANGATE. In line with the MedPoint investigations, ICAC proceeded to the arrest of two Civil Servants involved in the decisions taken to give the go ahead to the new Rs145m valuation conducted by Hooloman & Associates and upon which the government solely relied for the purchase. The two Civil Servants, Yodhun Bissessur and Aneerood Jeebodhun, the respective Number 1 and Number 3 at the government’s Valuation and Real Estate Consultancy Services (VRECS), have, on 5 April 2011, been provisionally charged with "public official using office for gratification", for having ordered a second valuation by Hooloman & Associates which allegedly favoured MedPoint over other contenders through the procedure of tender. The charge implies that the two Civil Servants allegedly took bribes when ordering and accepting the Hooloman & Associates Rs145m valuation without question when their own original valuation was for Rs75m. Mr Bissessur reportedly admitted that he knew the private firm had worked for Dr Malotra and detained « Bill of Quantities » for his clinic, but nevertheless accepted the firm’s valuation of Rs145m without disputing it. Hence, the decision of ICAC to proceed to the arrest of the two Civil Servants in question in the course of their investigations does appear justified.

Then Minister of Health, Maya Hanoomanjee was arrested by the ICAC police and the government chief valuer was suspended from his duties. Pravind Jugnauth was also arrested in respect for conflicts of interest in the matter. The police investigation is still on going.