Britam & The BAI Saga – Back to the Fore

Editorial

Four years after it was appointed on 8th April 2017, the report of the Commission of Inquiry on the Sale of the shares of BAI Ltd in Britam Holdings Ltd (Kenya) has been made public. The Commissioners attribute the four-year delay to the holding of the 2019 general elections and the occurrence of the Covid pandemic and its recurrent surges. What’s striking about it is the timing of the release of the report, coming all of a sudden, at a time when the Government/BOM combine are facing the heat with respect to the MIC and the opacity surrounding its disbursements to distressed companies and to entities suspected to be in the good books of the current government.

Besides the convenience of diversion that the release of such reports may at times provide, it would seem that commissions of inquiries, even if they are deemed to act independently of the government of the day, can become opportune tools for gunning down political adversaries rather than help the country progress. After the Britam inquiry, we’ll soon get to read the report of the recently-appointed commission of inquiry on the Betamax affreightment contract. That will surely come before the next general elections, and may also provide useful grist for the political mills – although as rightly pointed out by Lex, in these same columns, it is unlikely that a sitting judge of the Supreme court will be influenced by any political motives.

The Britam Commission has concluded that possible offences relating to “forgery or making use of a forged document [Notes of a meeting held on 14 November 2015 in Nairobi] and/or giving false evidence to the Commission may have been committed by Messrs Roshi Bhadain, Akilesh Deerpalsingh, Afsar Ebrahim, Sandeep Khapre BDO and possible others. In addition, possible breaches of the Insolvency Act could have been committed by Messrs Afsar Ebrahim, Yacoob Ramtoola and BDO. The recommendations of this Commission have been followed by the immediate challenge from the most concerned parties, including BDO Mauritius and BDO Kenya, which will surely be followed up on the appropriate legal platforms in the days to come.

That, together with the alleged reluctance of the Kenyan authorities to cooperate with the Britam Commission, is bound to complicate matters for future police investigations. The concomitant refusal of the Commission to allow the former Chairman Emeritus of the BAI Group, Dawood Rawat, to depone from a distance in order to submit his version of what exactly happened, and much more point to a long-drawn legal battle in the pipeline. What all of this suggests is that the dust will not settle so easily on a dramatic story of how political interference and retribution helped to aggravate an already bad situation in the former BAI Group and for which the country has had to pay a massive price running into billions of rupees, much like what has happened in the case of the Betamax contract.

There is no need to go into the details of the Britam saga at this stage. The nTan Report had already revealed the failings within the BAI Group, and these had also been brought to the attention of the then regulators and the political establishment by the IMF, and which went unaddressed. All this reflects a messy management of a bad situation aggravated by rash decisions to precipitate the downfall of the former BAI Group more as a demonstration of raw political power, rather than as a well-advised and coolly calculated regulatory action intended to sustain public confidence in our financial institutions.

BAI’s investments in the Kenyan group, Britam, were alleged to have been sold away not at the

highest value it would have fetched from a potential South African investor but at a lower value to a party associated with the Kenyan government. Subsequent events such as the inability to meet obligations to policy holders and investors of the former BAI Group put on display the amateurism and frivolity with which serious work of constructive redress of the BAI Group’s financial condition failed to be undertaken. Several billions already poured in by the government to re-capitalise the ex-Bramer Bank in its new incarnation as part of the newly created MauBank, the unpaid holders of SCBG policies left in the lurch and the dismantling and fire-sale of the Group’s assets, tell a similar story — harrowingly poor political management turning a bad situation far worse.

Speaking of former Minister Bhadain, the Britam Commission notes about the 2015-2016 era: “It was a climate of…riding rough-shod on institutions, dismissing or engaging professionals according to whether they were toeing the line or not, marginalizing public officers and deriding fellow parliamentarians who were opposed to his views.” With some variations many might regard this as an eloquent description of the current state of affairs in the country.

* Published in print edition on 30 July 2021