Britam now restates profit after exit of two directors

Corporate News

Roshi Bhadain, Mauritius Minister for Financial Services, Good Governance and Institutional Reform (left) and Andre Bonieux, a senior partner at PricewaterhouseCoopers and one of two conservators of BAI Co (Mauritius) Ltd. PHOTOS | COURTESY 

By FRED MBUGUA in Port Louis, Mauritius

In Summary

• The Sh342 million profit reduction was revealed two days after the resignation of two directors caught up in a corporate governance crisis sparked by the collapse of a Mauritius bank associated with the company’s single largest shareholder.

Financial services firm Britam has revised its books for 2014 a month after they were published, reducing its after tax profit by Sh342 million.

The reduction was revealed two days after the resignation of two directors caught up in a corporate governance crisis sparked by the collapse of a Mauritius bank associated with the company’s single largest shareholder.

Mr Dawood Rawat, the Mauritian business magnate wanted for fraud, money-laundering and embezzlement, and Mr Moussa Rawat, his nephew, left Britam’s board on April 22, according to notices sent to regulators the same day.

The notices were, however, not made public within 24 hours as required by law. The duo represented the interests of BAI Co (Mauritius), which had a 23.34 per cent stake in Britam and in which Mr Dawood Rawat had a controlling stake.

The firm has been placed under a conservator by the Mauritian government after evidence of overvalued assets and understated liabilities emerged.

Britam’s revision to its financial statements has been attributed to “an issue with respect to… the carrying value of a local associate company”.

The group has two associates — Housing Finance (46.04 per cent stake) and Acorn Group Limited (25 per cent).

Last week, the Mauritius government said it would take control of Mr Rawat’s stake in the Kenyan firm as it begins a global hunt for assets that can be seized and sold off to repay victims of his fraud.

The search has so far unearthed a castle near Italy’s capital, Rome, and property in places like the United Kingdom, Croatia and Romania.

The asset seizures are part of a plan Mauritius Prime Minister Anerood Jugnauth presented to parliament on Friday, whose aim is to compensate policyholders and investors caught in the Ponzi-type fraud affecting BAI Co (Mauritius) and its sister company Bramer Bank.

READ: How Dawood Rawat’s deception was unravelled

A Cabinet meeting held just hours before the parliamentary address agreed on wide-ranging legal and administrative steps that will see the State Insurance Company of Mauritius (SICOM) replace BAI Co (Mauritius) as a shareholder in British-American (Kenya) Holdings, the single largest shareholder in Britam.

A yet-to-be-appointed national administrator for a proposed National Property Fund and SICOM’s board of directors will decide whether and when to sell the stake in the Nairobi-based regional financial services group.

The country’s Financial Services minister Sudarshan ‘Roshi’ Bhadain said the sale of BAI Co’s stake in Britam to interested parties was likely as the national insurer tries to get value for Mauritian policyholders.

The conglomerate that Mr Rawat owned is also invested in Botswana and Malta. Botswana regulators have delisted BAI (Botswana), in which BAI Co (Mauritius) holds an 80 per cent stake, and placed it in receivership.