Police raids, court drama over Britam man’s ‘Ponzi’ troubles

Mr Dawood Rawat whose Bramer Banking Corporation in Mauritius has been linked to Ponzi scheme. PHOTO | FILE
Mr Dawood Rawat whose Bramer Banking Corporation in Mauritius has allegedly been linked to a Ponzi scheme. PHOTO | FILE 

A Mauritius court issued an international arrest warrant Monday afternoon for a Britam director wanted for fraud, money-laundering and embezzlement.

Magistrate Alwin Joypaul, sitting in Port Louis District Court, agreed to a new request by police to order the arrest of Mr Dawood Ajum Rawat, local media outlets Le Matinal and L'Express reported.

The document was, however, not registered in court until Tuesday due to “administrative issues”.

On Friday, another court presented with a similar request refused to issue an arrest warrant and also rejected three of five provisional charges lined up against Mr Rawat.

The other two charges were dropped by police because they were “defective”.

The magistrate asked to order the arrest of Mr Rawat by the Central Criminal Investigation Division (CCID) of Mauritius on Friday ruled their application faulty, arguing it violated the use of “interim information” procedures unique to Mauritian law.

On their return to court Monday, prosecutors successfully argued they needed to interrogate Mr Rawat, 71, over alleged crimes that led to the State takeover of Bramer Banking Corporation Limited and the placement of its parent company British American Investment Company (Mauritius) under conservators.

The actions were taken following claims that “evidence of a massive Ponzi scheme” had been unearthed involving up to 25 billion rupees (about Sh63 billion).

Bramer Banking Corporation, whose license was revoked and business put in receivership, was a majority-controlled subsidiary of BAI (Mauritius), with stakes totalling 74 per cent of the total held through four special purpose vehicles.

Its financial troubles led to 5.25 billion rupees (about Sh14 billion) in debentures held by BAI (Mauritius), a wholly owned subsidiary of British American Investment (Mauritius), to become impaired.

This, Finance Minister Vishnu Lutchmeenaraidoo later told the country's parliament, “caused the solvency margin of the insurer to be deficient”, requiring it to be placed under a conservator (PricewaterhouseCoopers).

According to the provisional charges that had been filed in court, Mr Rawat was accused of, among other things:

  • being involved in a criminal conspiracy with others to defraud policy holders and investors by transferring some 6 billion rupees (about Sh15 billion) to personal accounts held by himself and close relatives;

  • fraudulent use for personal benefit of property belonging to AIB Group and KLAD Investment Corporation, the Bahamas-registered ultimate holding company for BAI, by ordering the transfer above;

  • money laundering by instructing directors and officers of Bramer Bank and British American Investment Co (Mauritius) to transfer the six billion rupees;

  • criminally engaging in transactions that involve property which in part, directly and indirectly, represents the proceeds of a crime.

On this basis, the police sought a provisional warrant of arrest for the billionaire businessman, who they describe as the “ultimate beneficiary” of the fraudulent transactions.

Magistrate Adila Hamuth, however, said the procedure they wanted to use was meant to allow courts to determine conditions of release or detention, while avoiding administrative imprisonment. It requires the police present the accused in court.

“The accused is absent and there is no evidence before this Court that (he) has been arrested, which would give rise to the lodging of provisional information to bring the detention of the accused under judicial control,” she said.

“In the light of the above, and taking into account the reason and the purpose for which provisional information is lodged, it can neither come into existence before the arrest of a suspect nor be used as an instrument to effect such arrest. The provisional information lodged in the present matter is, therefore, struck out”.

These developments come as debate rages over whether the businessman’s woes are politically instigated given his close ties to the country’s previous administration.

Mr Rawat who travelled to the United Kingdom in mid-March to seek medical attention has not returned to Mauritius since the country’s prime minister claimed proof of a $693 million fraud.

Shortly after the scandal exploded, he resigned his position as chairman of Malta-based GlobalCapital plc, a financial services firm that was the result of a 2003 merger between Global Financial Services Group and BAI (Mauritius).

On Tuesday last week, CCID officers searched Mr Rawat’s homes in Floreal, a suburb of Curepipe, and Tamarin in Rivière Noire, after receiving reports a significant amount of cash was stashed away in a chimney in one of the homes.

The search only unearthed five safes, small amounts of Mauritian, Indian and Kenyan currency, a revolver, a gun licence and some jewellery.

BAI (Mauritius) chief executive Oomeshsing ‘Rishi’ Sookdawoor, who had been considered a prosecution witness, was on Friday arrested, charged and released on bail in relation to the same offences facing Mr Rawat.

At least 18 Rawat family members believed to have benefitted from the scam are being barred from leaving Mauritius.

The Mauritian scandal has sent ripples all the way to Kenya due to the relationship between some of those involved and the British-American Investments Co (Kenya) Ltd (Britam).

One of Britam’s largest shareholders, British-American (Kenya) Holdings is related to BAI (Mauritius) and there are “common directorships between Britam, BAI and the Bramer Banking Corporation”.

Mr Rawat and two others, Tarun Ghulati (a former Bramer Bank CEO) and Moussa Rawat, joined Britam Kenya's board in 2013, the same year its Group Managing Director Benson Wairegi became a director of Bramer Banking Corporation. Mr Ghulati quit the board in May 2014.

Britam Kenya has, however, clarified it has no financial exposure to the crisis in Mauritius.

Update April 22, 3.30pm: A lawyer representing Mr Rawat argued a motion before magistrate Alvin Joypaul demanding the revocation of the arrest warrant. He argued that “the magistrate had no jurisdiction” to issue such a warrant. The prosecution countered that it is “not an international arrest warrant, but a document to locate the person”. After hearing the arguments, magistrate Joypaul put his ruling under advisement.