Mauritius Commercial Bank / National Pensions Fund Scandal
Early in February 2003, Amina Rojoa, the accountant responsible for the National Pensions Fund (NPF) deposit accounts, informed Prime Minister Sir Anerood Jugnauth, that the NPF deposits at the MCB could not be traced. On 14 February 2003, known afterwards as MCB's "Black Friday," the Mauritius Commercial Bank announced in a press communiqué that it had discovered a large scale fraud which had resulted in the misappropriation of over Rs. 600 m. between 1991 and 2002. The fraud was alleged to have been committed by one of the bank's senior managers, Robert Lesage. He was accused of “fraudulently abstracting funds belonging to the MCB” and “tampering with clients’ accounts. The MCB started proceedings in Mauritius against Lesage and thirty seven defendants. The most important ones involved were:
Sea Rock Paradise Ltd (1989): The Ha Yeung couple buy shares of Masilamani and Veemlah Veerasamy.
- Angel Beach Resorts Ltd (1987): Teeren Appasamy, Dev Manraj and Donald Ha Yeung’s wife shareholders as from 1997. Ravi Ramdewar, secretary until May 2002. Teeren Appasamy and Marc Daruty de Grandpré directors since August 2001.
- Belle Beach Ltd: Teeren Appasamy, sole director.
- Handsome Investment Ltd (1991): Shareholders: Donald Ha Yeung & Mrs. Pit Ho Wong Ching Hwai.
- Quartet Development Co Ltd (1986): First shareholders: Alain Richard Voon, Donald Ha Yeung, Prithiniah Geerjanand and Mrs Hurkissoon Rambaruth. Geerjanand Khoosman and Sudarshan Bhadain shareholders in 1990.
- Magarian Cie Ltd (1988): Bhardooaz Babeedin and Deochand Nundloll, shareholders. In 1994, Donald Ha Yeung joins in.
- Advance Engineering Ltd (1988): Shareholders: Narainsamy Sadien, Sudeshj Dawoodharry and Danesh Sampathlall.
- Mauri Beach Travel and Tours Ltd (1997): Dev Manraj (also director), Ravi Ramdewar (also secretary), Donald Ha Yeung and his wife (director) shareholders and Renu Manraj one of the directors.
The Independent Commission Against Corruption (ICAC) accused NPF accountant Rojoa of conspiracy with Lesage. Charged with embezzlement and money laundering, Lesage involved two top managers of the MCB. He was later granted immunity by the Independent Commission Against Corruption (ICAC). Attempts were made to challenge the immunity since it had not been granted or confirmed by the Director of Public Prosecution. As the investigation unfolded, ICAC identified the main beneficiary as London-based Mauritian businessman Teeren Appassamy. Money was credited to accounts of ten companies and five persons including Appassamy, the alleged master swindler. They are Ravi Ramdewar, his solicitor; former civil servant and consultant to the Mauritius Commercial Bank, Dev Manraj, his companies’ director; economist Donald Ha Yeung, his agent; and his brother, Tamby Appasamy. They, as well as MCB top managers, were provisionally charged.
Teeren Appasamy pointed MCB General Manager, Pierre-Guy Noël, as the banker he had dealings with. The latter was charged of having “willfully and criminally conspired with Robert Lesage and Teeren Appasamy to engage in several transactions involving a sum of Rs 36 million”. This charge was later struck out on a technicality. MCB's Assistant General Manager, Philippe A. Forget was charged with “failing to report a suspicious transaction” as file manager for two companies of Teeren Appasamy. Philippe Forget, also a major shareholder of the prominent newspaper L'Express (Mauritius), was arrested and released on bail. Charges against Forget were eventually changed and then struck out. Another top MCB manager, Thierry Sauzier, was charged with taking a Rs 2 million “bribe”.
The fraud action was soon followed by a claim by MCB in Mauritius against Mauritius Union Assurance (MUA) under its insurance policies. MUA in turn claimed against its reinsurers, Dornoch Ltd. and others. On 19 January 2005 the reinsurers rejected MUA's claim because of negligent misstatement, non-disclosure, and deceit. They later served proceedings against MUA and MCB. The allegations of misrepresentation made against MUA and MCB were "based upon answers given in a Lloyds bankers policy proposal form signed by officers of MCB to the effect that it was a well run orthodox banking business when in fact it was nothing of the sort." MUA and MCB appealed to the Supreme Court of the United Kingdom, and their appeal was dismissed. Cf. "Dornoch Ltd & Ors v Mauritius Union Assurance Company Ltd APP.L.R. 04/10 in Arbitration, Practice & Procedure Law Reports. Typeset by NADR. Crown Copyright reserved. EWCA Civ 389 6 http://www.nadr.co.uk/articles/published/ArbLawReports/Dornock%20v%20MUA%202006.pdf
In March 2005, a report by NTan Advisory Corporate (Singapore) was published in Le Mauricien. The report commissioned by the Bank of Mauritius, outlined unlawful banking practices at the Mauritius Commercial Bank.
In October 2008, after reviewing evidence gathered by ICAC, the Director of Public Prosecution Gérard Angoh decided not to retain criminal charges against Lesage.
In September 2009, ICAC initiated criminal action against the Mauritius Commercial Bank, as a corporate entity represented by Pierre-Guy Noël. MCB was charged to "wilfully, unlawfully and criminally fail to take such measures as are reasonably necessary, to wit : implementation of proper internal control systems and procedures, to ensure that services offered by it, to wit : in relation to the fixed deposit accounts held on behalf of the National Pensions Fund, were not capable of being used by a person to facilitate the commission of a money laundering offence." Cf. http://www.lemauricien.org/weekend/090906/fd.htm
On 30 June 2010, in the civil action brought about by MCB against Lesage and others, Judges Paul Lam Shang Leen and Nirmala Devat of the Commercial Division of the Supreme Court, found that Lesage could not be believed and held him liable for the Rs 880 million fraud at the MCB. The justices ordered him to refund Rs 436 million to the bank. The co-defendant and ultimate beneficiary of the fraud, Teeren Appasamy, was ordered by the Court to pay the bank a sum of Rs 305 million. Donald Ha Yeung, was exonerated of all blame by the judges. Lesage appealed to the Supreme Court of Mauritius, but his appeal was denied on a technicality. He then appealed directly to the Judicial Committee of the Privy Council in London, UK, the highest court of appeal. On Dec. 20, 2012, Lord Kerr and four other Law Lords allowed Lesage's appeal, quashing the decision of the Supreme Court of Mauritius and ordering a new trial "free from the taint of unfairness and bias" before a differently constituted court. Cf. UKPC 41 Privy Council Appeal No 027 of 2011: http://www.jcpc.gov.uk/decided-cases/docs/JCPC_2011_0027_Judgment.pdf
Court hearings in the case of ICAC v MCB have begun on Sept. 26, 2011.
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