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LALIT Communique on the MCB arrests and the continued Irresponsibility of the State

26.06.2003

When Lalit held its Press Conference on the MCB scandal on 20th February, 2003 we were already then shocked at the strange reaction of the State, which had lost hundreds of millions of rupees left in the MCB. We already then accused the Government of being involved in a stage-managed "cover-up" of the MCB's malpractices. We could already see what we called "serious offences" both against Criminal Law and the Banking Act. The Ministers concerned all specifically avoided blaming the MCB. Prime Minister Jugnauth we pointed out said "MCB va rembourser ", his Vice Prime Minister Berenger said MCB would "assume pleinement sa responsabilité", and the Social Security Minister Lauthan said "aucun souci a se faire car la MCB est une banque credible et serieuse". On the ground of these ludicrous reactions, we rightly called for the resignation of the Ministers.

At the time we also called on the Bank of Mauritius to take its responsibility, and take over temporary management of the MCB.

We have been proven right.

After four months of trying to pretend that the problem is with Mr. Robert Lesage as an individual roaming around the MCB after his retirement, with Teeren Appasamy or Dev Manraj, who have been involved in getting loans from MCB, finally the fact remains that at the heart of the problem is the MCB itself.

Meanwhile, the MCB has annoyed Government by breaking its half of the "cover-up deal" and claiming from the NPF, in its Main Case. The MCB has annoyed the other Banks in the sector by claiming from them for MCB Bankers' Cheques that they honoured.

Now, without allies, the oldest bank in the country has two of its top management out on huge amounts of Bail on charges ranging from with-holding information to actual money-laundering.

On 24th June (Tuesday), the Bank of Mauritius announces that it "endorsed the stand taken by the Bank's Management in the course of an earlier meeting this morning" and that "The Board of the Bank of Mauritius supports all measures taken by the MCB to preserve the integrity of its operations".

But the MCB seems then to have done a volte face. The Secretary of the MCB Conseil d'Administration announces its "entière confiance" in the two top managers and rejects their offers of resignation, following a meeting held in the afternoon.

The same day the Financial Services Commission, in the most hard-hitting Communique imaginable, in four points, makes a point very clear four times: the highest moral standards are necessary from the MCB. A cyclone warning Class IV.

The Ministers are all now in hiding.

They no longer govern the country.

They no longer comment on a Bank that is clearly in deep trouble.

Do they still think the MCB is a fantastic Bank? Do they still think the only problem is to "rann larzan"? Do they still think the MCB is assuming "pleinement sa responsabilité"?

We have a grave situation before us. The Conseil d'Administration of a Bank has "complete confidence" in two top managers who are being charged with Criminal offenses. The men are obviously "innocent until proven guilty", like everyone else, but banks are not courts of law. Banks have to be above suspicion.

The loss of the immense sum of money itself, the criminal charges against the top managers, are reasons for the immediate suspension of managers, until their names are cleared.

Lalit calls on the Bank of Mauritius at this late stage to take over the temporary running of this Bank. We call on the Ministers concerned, in particular the Prime Minister, the Minister of Finance, and the Minister of Social Security, to submit their resignations for allowing such a debacle in the Banking Sector to drag on into the absurd for over four months now.


Ram Seegobin
For LALIT
25th June, 2003