AfrAsia Bank Faces Setback: Privy Council Rejects Banking Secrecy in $11M Fraud

A Privy Council’s judgment in the case between Stanford Asset Holding Limited and Mauritius-based AfrAsia Bank Limited has been described as a setback for the banking sector by local opposition MP Arvin Boolell.

In a judgment delivered on Thursday, July 6, the Law Lords stated that banking secrecy is not justified when it comes to bank fraud.

Boolell, a Labour Party MP, called it a “resounding blow” for the Mauritian judiciary and expects a reaction from the Governor of the Bank of Mauritius.

The Financial Services Commission, Mauritius and the Financial Intelligence Unit were co-respondents in the case.

In February 2022, as a result of an alleged fraud, over USD 11 million was transferred from an account belonging to Stanford Asset Holding Limited at AfrAsia Bank to the bank account of Key Stone Properties Limited.

Approximately USD 4 million remains in the account of Key Stone and has been frozen. The remainder has been transferred into the accounts of unknown third parties.

Stanford Asset Holding Limited and The Greenway PCC brought an application seeking to compel AfrAsia to disclose information about the identity of the recipients of any of the allegedly misappropriated funds. The objective of their application is to trace, freeze and recover the funds.

The Supreme Court of Mauritius refused the relief sought, setting aside the Appellants’ application, leading to the appeal to the Privy Council.

Sources: Defi Media, Privy Council