Rs 80 billion were privatized with the stroke of a pen, passing from the coffers of the Central Bank to a subsidiary supposed to help companies in real difficulty – like the hotels in the place for years affected by the Covid – to keep the head out of water. But where the shoe pinches is when little buddies like Gopee & Co come to create new entities like a house for old people and build themselves castles while diverting millions …
Officially, the financial commitment of the main hotel groups to banks amounted to Rs 50 billion (billion) in May, according to the latest statistics from the Bank of Mauritius (BoM). However, specialists estimate that the indebtedness of the hotel sector would greatly exceed Rs 70 billion, the difference coming from other financial circuits. Nevertheless, this figure gives shivers down the spine even as the Mauritius Investment Corporation (MIC), launched in June 2020, to financially rescue systemic companies affected by the effects of Covid-19, including the hotel industry, is found today. ‘hui entangled in controversies, the identity of certain beneficiaries being singled out.
In one year, from May 2020 to May 2021, the debt of so-called resort hotels increased by Rs 15 billion, from Rs 35 billion to almost Rs 50 billion. The economic effect of the pandemic, coupled with the closure of borders since March 19, 2020, partially reopened since July 15, have brought this growth-promoting sector to its knees, which employs some 130,000 people and contributes up to 24%. of GDP. This led the big names in this sector to knock on the door of the MIC to avoid putting the key under the doormat.
So far, Lux * Resorts, NMH and Sun Resorts have received funding of Rs 1 billion, 2.5 billion and Rs 3.1 billion respectively from the MIC. In the process, Omnicane, heavily indebted to banks, recently concluded an agreement with the MIC to sell its land, totaling 185 hectares in Mon-Trésor Smart City as well as in the Britannia and MonTrésor region, for a amount of Rs 4.5 billion. A transaction already concluded, variously commented on elsewhere in land and political circles, qualifying this MIC deal as generous with Omnicane which would have pocketed a real jackpot.
© Murvind Beetun
Today, of the Rs 80 billion of capital made available to the MIC by the BoM and from its international reserves, it has already approved financing facilities exceeding Rs 30 billion. However, where the shoe pinches is the opacity of the MIC’s transactions, more particularly the identity of the beneficiaries of its funding. Reported by the leader of the opposition, Xavier-Luc Duval, the latter is trying these days to demonstrate that among the happy beneficiaries there were those close to power who were not eligible for these loans.
© Murvind Beetun
While the MIC, if we stick to its site, maintains that it advocates world-class governance, ethics and unfailing transparency in its transactions, even in the making of its decisions, serious criticisms arise. days on how certain cases are handled. Thus, observers wonder how some companies have seen their loan application go like a letter in the mail when they are not even qualified on the basis of the criteria established by the board of the MIC to benefit from financing. .
This is the case of Akai Fisheries, incorporated in January 2021, well after the emergence of the pandemic and which, moreover, would not have been affected by its effects, but which benefited from a loan of Rs 250 million. Xavier-Luc Duval tried to question the Minister of Finance on this company last Tuesday in Parliament in his PNQ. However, he was stopped by the announcer in his demonstration aimed at making the connection between Akai Fisheries’s identity and its proximity to those close to power. On the Registrar of Companies website, however, we note that Akai Fisheries (file number C177373), has its head office in the free port and as directors, the brothers Shekar and Gulshan Jugroo. However, some wonder why, after the Investment Committee’s refusal to grant its loan request, the board would have finally given the green light. It is also that of Avinash Gopee, owner of NG Holdings, Luxury Retirement Village and PSH Investment, which are luxury real estate projects, housing, among others, the headquarters of the Economic Development Board. (See text below).
Should we be worried about the selective largesse of the MIC while doubts settle on the repayment capacity of the beneficiary companies, including those of the hotel industry which will not leave the hostel anytime soon, given the economic situation? international and threats of a third or fourth wave, which today strikes countries emitting tourists, including Europe, with the Delta variant.
Economist Rajeev Hasnah estimates that the debt of Rs 50 or 70 billion, drawn mainly by four large hoteliers, namely NMH, SUN, LUX and Constance, is not in itself worrying, if we take into account that they are brewing today today assets of more than Rs 80 billion. “The concern of operators is the lack of revenue to ensure a minimum of operational costs while there is no short and medium term visibility in this sector.” He argues that the hotel sector’s business model is based on capital-intensive, namely the sale of rooms and services, with probably a renovation exercise every five years. “However, for an establishment to generate income, it He will need to have an investment horizon of seven years on his investments. He has already lost more than a year and it will not be for three years that he will return to the phase of growth and profitability he experienced before the pandemic, “he analyzes.
In the meantime, the MIC will be under great pressure to make a new image. Will the new chairman, Marc Florman, the two deputy governor of the BoM and the other nominees (Louis Rivalland, Swaninathan Ragen, Neermalen Gopal and Swadicq Nuthay) be up to the task of raising the bar while this institution is still in the viewfinder of international institutions?
Micmacs in loans to “newbies”
If one expected the billions disbursed by the MIC, one is astonished that companies of Avinash Gopee could have benefited generously from this money drawn from the country’s reserves. In addition, when we learn that this close to power is building a house at a cost of millions, we can ask ourselves questions. Rs 500 M and maybe Rs 350 M additional in less than seven months. The opacity in the granting of these funds could be explained …
His case is all the more troubling as his companies do not appear to meet MIC’s eligibility criteria, namely hotels and manufacturing. Not only was Avinash Gopee funded for non-productive and ineligible projects, the Investment Committee objected to its request. The MIC board ignored it and one wonders if this committee has its raison d’être, if it is not listened to …
For his part, the governor of the BoM, Harvesh Seegolam, had on May 29, 2020, declared that MIC would “assist systemically large, important and viable companies in Mauritius, which are financially distressed as a result of the COVID-19 pandemic”. So, can we qualify companies like Akai Fisheries or Luxury Retirement Village as “large, viable and distressed”? How are these two new companies already in distress, at the very beginning of their operations?
When the population learns that one of these not too eligible beneficiaries has been building a huge house since 2020 along the Rivière-Sèche ravine in the lower Beau-Bassin after the Balfour waterfall, they may wonder. Photos and comments are circulating on social networks mentioning tiles with gold-plated decorations. We called Avinash Gopee who denied everything. We then asked him for permission to visit his home. He promised to come back to us.