Mauritius government seeks buyers for Britam stake

Mauritius has asked a bank in South Africa to help it find a buyer for a Sh12 billion stake in British-American Investments (Britam), which it seized from a disgraced former director, the finance minister said on Thursday.

Mauritius holds a 25 per cent stake in Britam and had delayed to sell it on grounds that the share price was low.

Mauritius seized the assets of Dawood Rawat, a Mauritius citizen, in April after accusing him of running a Ponzi scheme through a Mauritian insurer, sending Britam’s shares down by almost 25 per cent. The Mauritius government also revoked the licence of Bramer Banking Corporation, which is part of Mr Rawat’s Seaton Investment conglomerate.

— Additional reporting by Reuters

The Mauritius government is selling the tycoon’s assets to compensate investors who lost cash in the Ponzi scheme. A Ponzi is a scam where investors are promised or paid unrealistic returns from cash paid in by new members, necessitating an endless recruitment drive that eventually proves unsustainable.

In the suspected fraud, Rawat is accused of collecting customer one-time premiums on an investment product called Super Cash Back Plan Gold on the promise of repaying an interest or bonus of between 10 and 14 per cent, the probe revealed.

The country’s Finance Minister Seetanah Lutchmeenaraidoo told Reuters that alternatively the stake could be bought by a Mauritian sovereign fund due to be set up next month if the right price could not be secured.

“We have given an option to a bank in South Africa to look for a buyer for the whole lot, ...but at a price that is much higher than the level today,” Lutchmeenaraidoo told Reuters in an interview, without naming the bank. Britam’s shares, which were trading at around Sh28 in April before the assets were seized, closed on Wednesday at Sh15.75.

Mauritius aims to raise 4.2 billion rupees ($118 million) from selling the stake to help repay those who lost money in the Ponzi scheme, the minister said, adding this would mean securing a price of about 21 shillings a share.

“If this doesn’t come ...then the legacy sovereign fund will buy it,” he said, referring to a fund he said would be set up in November to hold long-term investments. He did not give further details about the fund.