Decades-Long Case Ends: MCB Loses Appeal, Must Pay Rs 1.2M Fine

The Mauritius Commercial Bank (MCB) has been fined by the Supreme Court, ending a two-decade-long legal battle. The court upheld the bank’s conviction for negligence in internal controls, but reduced the original fine from Rs 1.8 million to Rs 1.2 million, citing the “exceptionally long” time since the events.

The court rejected the MCB’s appeal, which argued that its internal procedures were misinterpreted or misapplied by employees.

Judges Nicolas OhsanBellepeau and Mary Jane Lau Yuk Poon stated that while procedure manuals existed, they weren’t followed in practice.

The bank was found to have breached Section 3(2) of the Financial Intelligence and Anti-Money Laundering Act (FIAMLA).

MCB’s Key failings highlighted

The judgment pointed to several critical failures by the bank. Major transactions, including one for Rs 200 million and another for Rs 75 million, were executed without instructions from the National Pensions Fund (NPF), violating the “dual control” principle.

A bank representative had reportedly admitted that several internal directives were not correctly applied, which could have prevented the suspicious transactions.

The Supreme Court also highlighted major deficiencies in the bank’s internal audit department at the time.

With only eleven agents to oversee forty branches and nearly 150,000 daily transactions, the department lacked qualified senior management.

This weak oversight allowed a retired executive, Robert Lesage, to continue managing the NPF file from his bank office, giving instructions to employees without proper authorisation or supervision.

The court concluded this demonstrated a lack of separation of duties and a largely deficient control system.

The judges ruled that the MCB had failed to implement the reasonable measures expected of an institution of its size, leaving the door open to fraudulent practices.

The conviction was upheld, but the reduced fine was a concession to the length of time that had elapsed.

Source: l’Express