THE RAPE OF OUR COUNTRY REVEALED IN STARK DETAIL
When he came to power after organising a coup d'état which overthrew the legal independence constitution in June 1977, former President Albert Rene published a document called “SPPF Policy Statement Onward to Socialism”. In it he claimed that “In accordance with the overriding aims of the (Seychelles People's Progressive) Front, the tourist industry must result in economic benefits to all and not simply to those who have sought to capitalise on the natural beauty of the country”.
In 1980, in order to fulfil the aims of the SPPF, Mr Rene created a commercial company, called Companie Seychelloise de Promotion Hotelière (COSPROH). During 1981-1982 this parastatal took control of three hotels, which the Government nationalised from its foreign owners, including one of the largest hotels at the time the Mahé Beach Hotel. But very quietly this year, while the whole country was preoccupied with the longest election campaign in its history, COSPROH was wound up. In a notice published in the official Gazette in June 2006, the directors claimed, in their petition “That the company has completed its objectives”. The directors were Mukesh Valbhji and Maurice Lousteau-Lalanne.
But the liquidation of COSPROH doesn't seem to have been made in conformity with the law. While any company can wind up its affairs, it is however, required to ensure that all its financial affairs are properly accounted for, audited and lodged with the Registrar of Companies at Kingsgate House, where they are held as public documents. What's more it must have the permission of its shareholders. In the case of COSPROH, while its legal shareholders were the government, the latter only held those shares in trust at least in the spirit of the current Constitution. The real owners were the people of
The liquidation of COSPROH, however, was not only done without the approval of its ultimate shareholders through its real representatives, it also fell short of the requirement of the Companies Act. While its liquidation was as recent as June 2006, the company, however, failed to lodge annual returns and financial statements since the financial year ending 31st of December 2002, a state of affairs which should have prevented the Registrar of Companies from giving its approval to the winding up petition.
During those critical last years of its existence, which covers the period that the returns were not lodged as required by law, the four hotels which COSPROH still had under its control were quietly disposed of in very controversial circumstances. One of them was the subject of international press attention when it was found that among the illegal shady deals undertaken by the former owner of the Italian food multinational PARMALAT with the company's funds, was the purchase of a hotel on Praslin from COSPROH. This deal was shady from the Italian authority's perspective in that it appeared that payment was made twice. But it was even shadier here in
But the biggest can of worms it appears, concerns the disposal of the Fisherman's Cove Hotel. This property, which was nationalised from its original foreign owners by President Rene during the one-party state, was owned by COSPROH through a vehicle called the Fisherman's Cove Hotel Limited. In its latest filed financial statement dated 31st December 2002, COSPROH claimed it owned 100% of the shares of this company, capitalised at SR 6 million.
Fisherman's Cove Hotel, according to the parastatal, owned the land and building freehold. COSPROH itself declared that the total value of land, building, equipment, furniture and fittings as well as “work in progress” (planned refurbishment) in its books was worth just under SR 200,000,000, a considerable sum, considering that it could go a long way towards paying back our Government's accumulated domestic debt, which is well in excess of SR 3,000 million, if all that value and more could be realised after privatisation of these assets as going concerns.
While today, the Government is offering shares in SACOS to the small Seychellois investors an entity which has so far failed to make public its finances, and is planning to do the same with Nouvobanq, Fisherman's Cove Hotel was quietly disposed of for the sum of SR 85,000,000. But, according to the account of Fisherman's Cove Hotel Limited (the company owned by COSPROH which owns the hotel) before it was sold by the government through COSPROH, refurbished the hotel to the tune of SR 29,000,000. This means in effect, the government made a net gain of only SR 55,000,000. But if you thought that this was intriguing wait for the next bit.
In its published account dated 31st December 2004, Meridien (Seychelles) Limited a Seychelles registered company owned by the international hotel management company better known as Le Meridien disclosed that it was renting the Fisherman's Cove from Fisherman's Cove Hotel Limited for the annual sum of US$ 2,262,000, under a 20 year “non-cancellable lease”. This means, whoever is the ultimate owner of the Fisherman's Cove he or she or they would earn a total of US$ 60,210,000 over twenty years. But that is not all.
According to the accounts of Fisherman’s Cove Hotel Limited the beneficiary company of the US4 60, 210,000, under the Investment Promotion Act, it has been granted exemption from payment of Business Tax by the Ministry of Finance for a period of 20 years. The Minister of Finance at the time was James Michel, now our newly elected President of the Republic. On the surface this did not make practical sense. In effect the Government, which made an investment in its own hotel, awarded itself a major concession, exempting it from paying business tax, money which would have gone into government revenue in any case. In fact, under the Investment Promotion Act 1994, the Minister of Finance has no power to grant tax concessions outside those stipulated by the Act. And Business Tax is not one of those taxes exempted. Scratch the surface and one comes up with a major scandal which dwarfs that of Parmalat.
For in 2003, the COSPROH ceased to be the owner of Fisherman’s Cove Hotel Limited. So now who really owns Fisherman’s Cove Hotel Limited, the company that owns the Fisherman’s Cove Hotel, which will pocket US$ 60,210,000 over 20 years just sitting at home and absolutely tax free, for an investment of merely SR 85,000,000? Further investigation revealed another intrigue and a mystery.
The intrigue is that Fisherman’s Cove Hotel Limited, which to remind readers- owns the now 5-star Fisherman’s Cove Hotel, was sold by COSPROH in 2003 to a company called Hotel Properties Limited which is registered in
So who owns Hotel Properties Limited the company registered in
Under the
Mr. Bilgrami has surfaced before, most recently in the controversial deal to sell Seychelles Breweries shares to the Seychelles Pension Scheme. Mr Bilgrami represented the Swiss registered company which owned the Seychelles Breweries shares. The Seychelles Pension Scheme reported that it paid SR 59 million for the shares. The Chairman of the Board of Trustees of the Seychelles Pension Scheme who proposed and recommended the purchase of the Seybrew shares was Francis Chang Leng, Governor of the Central Bank. Chang Leng is still the Chairman of the Board of Trustees of the new Seychelles Pension Fund.
Mr. Bilgrami is also a director of another company called Belombre Hotels Development Limited, a company registered in Seychelles but has as majority shareholder the same BVI company which owns the majority shareholding in Hotel Properties Ltd which owns the majority shares in Fisherman’s Cove Hotel Limited which owns the Fisherman’s Cove Hotel which has been leased by Le Meridien for US$ 60,210,000 payable over 20 years. Belombre Hotels Development Limited has been given a lease over a prime beach front property between the Fisherman’s Cove and the Berjaya Beau Vallon Beach Hotel for the consideration SR 15,000,000 by the Government, without anyone else being given the opportunity to be considered.
During 2004, it was announced that COSPROH had sold the Barbarons Beach Hotel to Airtel for SR 65,000,000. All considered, therefore, the government earned a total of SR 165,000,000 from the sale of the three properties, but from the Fisherman’s Cove alone it would have earned US$ 60,210,000 over 20 years or SR 331,000,000 at current exchange rate or potentially SR 602,000,000 to SR720 million, if the parallel market rates quoted by IMF is used.
But the twist in the tail of this saga, ironically, involves the Government of France. According to last financial statement COSPROH made public, dated 2002, the parastatal owes the French development agency Caisse Française de Development, nearly SR 36,000,000 in overdue capital and interest. The auditors claimed that the parastatal could not pay this loan because there was a shortage of foreign exchange in the country, yet they gave away a guaranteed income of US$ 60, 210,000 to a mysterious company based in the BVI.
Presumably, this sum will be collated together with all other foreign currency debts of our government which will then be the subject of a Paris Club rescheduling in due course.