Revelations: MIC Allocated Rs1.65 Billion to Maradiva Just Months Before 2024 Elections

The Mauritius Investment Corporation (MIC) allegedly granted a staggering Rs 1.65 billion to Maradiva Villas Resort & Spa, one of the most opulent hotels in Mauritius, mere months ahead of the pivotal 2024 elections.

The minutes from the MIC Board meeting held on 5 February revealed a troubling undercurrent of doubt among its members regarding this substantial funding, Le Défi Quotidienreported.

A Funding Amount Far Beyond Expectations

Contrary to previous perceptions, it said, the financing extended by the MIC to Mauriplage Beach Resort Ltd—now known as Dhyanavartam Ltd, the owner of the Maradiva Villas Resort & Spa—far exceeds the widely reported figure of Rs 650 million.

Internal documents reviewed by Le Défi Quotidien indicated that this amount merely represents the initial tranche of a staggering total of Rs 1.65 billion.

This figure positions Dhyanavartam Ltd among the largest beneficiaries of the MIC, an entity wholly owned by the Bank of Mauritius.

The latest disbursement, amounting to Rs 350 million, was approved by the MIC Board in February 2024, mere months ahead of the upcoming general elections.

The MIC’s Funding: A Much Larger Sum Than Previously Disclosed

In December 2020, the MIC granted a loan of Rs 650 million to Mauriplage Beach Resort Ltd, chaired by Kobita Jugnauth, to finance renovations of its hotel complex.

The wife of former Prime Minister Pravind Jugnauth reportedly presided over the company since 4th February 2016, Le Défi Quotidien claimed, citing Registrar of Companies documents.

This widely publicised sum was fully disbursed by June 2022, as highlighted in the MIC’s annual reports.

However, during the Board meeting on 5th February 2024, it was revealed that an additional Rs 650 million had also been disbursed following the initial payment.

Furthermore, during this meeting, an additional funding of Rs 350 million was approved, bringing the total investment to an eye-watering Rs 1.65 billion—far beyond what had been communicated to the public thus far.

Serious Concerns Raised by the MIC Board

Board Paper No. 63/4 illustrates that this matter ignited intense debate.

Although the decision to approve an additional Rs 350 million was ultimately sanctioned, several Board members expressed grave concerns regarding the financial standing of Dhyanavartam Ltd and its ability to meet repayment obligations.

One director pointedly noted that the company “has not been able to meet its debt obligations according to the initial repayment terms,” adding that “these conditions cast significant doubt on the group’s and the company’s ability to continue as a viable business, as indicated in the audit report for the financial year ending 2022.”

Such alarming observations are particularly troubling for a company benefiting from substantial public funding.

The CEO’s Response and Justification for Payments

In response to these concerns, Jitendra Bissessur, then Chief Executive Officer (CEO) of the MIC, reportedly sought to reassure the Board by emphasising that Dhyanavartam Ltd had “made its interest payments to the MIC in a timely manner.”

He further asserted that the market value of the group in January 2023 exceeded the total debts, which he claimed ensured “that the MIC’s investment would be secure.”

However, this argument failed to quell the apprehensions of all Board members.

Another director raised questions regarding the price of the company’s villas, to which the CEO responded that the cost was approximately USD 400,000, equating to Rs 17.8 million at the current exchange rate.

Another Board member also queried the interest rate proposed for this investment, set at KR+2.25%.

A Loan to Repay Another Loan

Furthermore, another question raised during the meeting concerning the fact that Dhyanavartam Ltd had already taken out a loan of Rs 350 million from SBM.

The then-CEO clarified that the Rs 350 million requested from the MIC would be allocated to settle this debt, prompting a pivotal question:

“Has the company approached other commercial banks?” The CEO’s response was alarming:

“The company has reached its credit limit with other commercial banks.”

This revelation casts a shadow over the company’s solvency, particularly as the MIC stands as its last bastion of financial support.

Absence of Revenue in 2022 and an Unfinished Project

Another grave issue raised was the complete absence of recorded revenue for the financial year 2022, a most unusual predicament for a company purportedly in operation.

Jitendra Bissessur attributed this anomaly to the renovation period of the hotel complex, asserting that the business would be “fully operational by March 2024.”

Insufficient Collateral for Massive Loans

Board members also sought clarity on the collateral provided to secure these substantial loans.

The CEO responded that fixed and floating charges would be placed on all assets of Dhyanavartam Ltd and its subsidiary, Cittamekam Ltd.

However, the lack of details regarding the actual value of these guarantees left the board members in a state of uncertainty about their adequacy in light of the significant sums involved.

Ultimately, the MIC Board Members granted their approval.

“Following further discussions, the board members have sanctioned an additional financing of Rs 350 million to the company to cover the extra renovation costs, at the same variable interest rate previously granted (Key Rate + 2.25%), with a maturity date set for 25 September 2032, and under conditions similar to those of the second request.”

The decision to disburse an additional Rs 350 million in February 2024 raising eyebrows regarding the timing of this investment.

With general elections looming in November 2024, the allocation of such a substantial sum, amidst significant doubts about the company’s viability, invites scrutiny into the true motives behind this decision.

Source: Defi Media