DR RAMADOS IGNORES THE LAW AND GETS AWAY WITH IT

DR RAMADOS IGNORES THE LAW AND GETS AWAY WITH IT

In the “Nation” of 21 February 2007, a company called Seychelles International Specialist Medical Centre Ltd, in a colourful loose leaf insert which claims it is offering 10,000 shares to members of the public at US$1000 per share payable in any currency. This notice, which is in effect a public offering, is illegal under the Companies Act 1972.

Although “Seychelles International Specialist Medical Centre” must be commended as a private sector initiative, the company’s public offering in the manner it is being conducted disregards the Companies Act which requires that any form of “offer for sale” to be supported by a “Prospectus”; if this is in existence then surely it should be made public.

Dr Ramados’ venture also runs counter to the existing rules in that generally speaking the Registrar of Companies/ Business Names refuses to endorse any name that has the word “Seychelles” as part of its name unless the Seychelles Government has connections with the enterprise. It is not clear from the advert that this is the case with the Seychelles International Specialist Medical Centre Ltd. Exception to the rule is when Seychelles is put in (bracket) to denote the “residence” of the business.

According to the Companies Act 1972, “Prospectus” means any invitation, whether written, visual or oral and by whatever means conveyed, to subscribe for shares or debentures, or to purchase shares …with a view to them being offered for sale…includes an advertisement published in connection with the placement of shares” Section (16) (a) of the Act also states that “…a prospectus is issued to the public if it is issued to more than twenty-five persons;” and Section 40 (16) (b) says that “…a prospectus is first issued when it is first published as a newspaper advertisement…with a view to inducing him to subscribe for the shares...”

This advert by the Seychelles International Specialist Medical Centre Ltd within the confines of the Companies Act 1972 is therefore a prospectus. However, the company runs foul of the Companies Act as it fails to comply with the various requirements of the Act with respect to the issuing of a prospectus.

Under Section 40 (11), neither the requirements for prospectus commencement have been complied with, nor have the required statements been made. Requirements by Section 40 (3) for directors signature of prospectus and delivery to Registrar do not appear to have been followed; Section 40 (12) of the Act states that an offence is committed by a company for not complying with Section 40 (11). Section 40 (13) further states that the company directors are responsible for the violations. In Section 40 (14) the amount of penalty payable by the offending company is set out. Other sections of the Act, Section 41 (4) states the action to be taken by the Registrar General and penalties for non-compliance, which cumulates in Section 41 (13). Furthermore, under Section 40(5), a “Prohibition notice” can be issued by the Registrar General for a company’s failure to comply with the Companies Act.

Given the current sorry state of the Registrar General’s Office and egregious cum laude that the Military Doctor commands in this part of the world, such offences will most probably be ignored in the serial failures of those seeking transparency, accountability and good governance with respect to attracting overseas investors.