The three-month notice that former Britam director Dawood Rawat gave the Mauritius government to pay $1 billion (Sh104 billion) in compensation for what he calls illegal seizure of his assets expires Tuesday, setting the stage for a court battle.
Mr Rawat’s lawyer Shakeel Mohammed told journalists that the Mauritius government made no effort to contact his client, maintaining “radio silence” over the period.
The 71-year-old former billionaire had promised to initiate legal action before the Paris Arbitration Court to fight for the return of his property if no agreement would have been sealed by September 8.
Mr Rawat, who holds both Mauritian and French citizenship, is hoping to find protection from a 1973 treaty between France and his home country which, he says, prohibits seizure of an investor’s property.
His lawyers also argue that the sale of some of his assets to the Mauritian State “was not in line with guidelines formulated in the United Nations Commission on International Trade Law”.
Mauritius seized Mr Rawat’s assets in early April after accusing him of running a Ponzi scheme through his flagship insurance business.
The island nation is proceeding with the liquidation of Mr Rawat’s interests, saying the money will be used to compensate investors.
Last week Mauritius Finance minister Seetanah Lutchmeenaraidoo said the government is looking for a buyer for Mr Rawat’s 23.34 per cent stake in Britam and will be happy to sell at Sh13.3 billion.
Mr Rawat, however, has threatened to sue anyone involved in such a sale.
The target price of Sh13.3 billion implies a 77.2 per cent premium on the Sh7.5 billion the Mauritians could fetch if they were to sell the shares at the current Nairobi Securities Exchange market price of Sh16.7 per share.
Britam’s share price has declined 44.2 per cent since the beginning of the year, reflecting the impact of the bear run affecting the whole market.
In an address to his country’s parliament last week, Mr Lutchmeenaraidoo said the government hoped to secure a single buyer for the whole lot.
“In fact, I can tell the House one thing, if there is a buyer for Britam at 4.5 billion rupees ($128 million), we will sell it immediately,” he said, according to a transcript of the proceedings seen by Reuters.
In June, the government-appointed receiver Mushtaq Oosman of PriceWaterhouseCoopers told Reuters the share price was too low to sell.
Britam’s market capitalisation stands at Sh32.1 billion, representing a 53.8 per cent premium on the company’s net assets of Sh20.9 billion.
Jubilee Holdings, Britam’s main rival and the country’s largest insurance group, is currently trading at about double its net asset value of Sh17.2 billion.
Britam posted a 77.2 per cent drop in net profit in the half-year ended June, driven by higher costs and a jump in unrealised losses in its investments.
The firm’s net profit stood at Sh625 million in the period compared to Sh2.7 billion a year earlier. Its gross premiums increased 76.5 per cent to Sh10.6 billion, with claims rising 41.9 per cent to Sh5.1 billion.
Commissions rose 80.8 per cent to Sh1.9 billion while operating expenses rose 34.3 per cent to Sh2.4 billion, leading to the reduced earnings.