In the name of fairness

Why on earth should the capital of investors who placed their savings in Bramer Asset Management be cut off by 15% and 20% at source? This is discriminatory and unfair when compared to the multitude of investors and other victims of the BAI/Bramer alleged scam who are being paid their capital in full

Why on earth should the capital of investors who placed their savings in Bramer Asset Management be cut off by 15% and 20% at source? There is every reason for investors to be aghast and flabbergasted at being the only investors among the tens of thousands of investors who have been the unsuspecting victims of the Bramer/BAI alleged scam, who are being meted out this discriminatory treatment. How can 15% or 20% severed at source from the capital invested meet the pledge that the investors will recuperate their capital in full? How can there be such a flagrant inequality of treatment towards the 6,362 savers who invested their savings in Bramer Asset Management (BAM)?

Obviously, after two months of anguish and apprehensions at the risk of losing their savings from hard-earned income as employees or pensioners, etc., and in many cases consequently finding themselves destitute, all investors are deeply relieved and grateful at the government’s efforts to pay back the capital invested, albeit through debentures spread over a 5-year period ending July 2020. This is the reason why people are quietly accepting such a discriminatory decision instead of legitimately protesting against this blatant inequity. Can rules of fairness allow this iniquitous stance to stand?

Equality of treatment

It transpires that the argument being floated is that the investors should claim back the 15% and 20% deducted from their capital from the Mauritius Revenue Authority (MRA). On melange allègrement les torchons et les serviettes. The government’s responsibility is obviously to ensure, as has been the case for all victims in the BAI/ Bramer alleged scam so far, including those who invested in the Super Cash Back Gold scheme, that every victim of the systemic siphoning of investors’ funds obtain at least their capital.

There should therefore be equality of treatment towards every single victim of the pervasive purported scam, the more so given the incestuous relationships uncovered now amongst the diverse companies of the BAI/Bramer set up. The huge despoiling of investors’ funds brought to light by the investigators has therefore plumbed the finances of the whole interlinked set of companies through a domino effect.

Why should the issue of the MRA be imposed in such a discriminatory manner solely on the victims of Bramer Asset Management?

Why should the government act as an arbitrary enforcing agent for the MRA? Why should 20% of the capital be deducted when the uniform rate of tax applicable to income and corporate tax is capped at 15%?

Why should the gazumped victims of the colossal alleged scam which occurred under the watch of the regulators and auditors, who include the retired, the elderly, the plethora of bona fide savers and diligent taxpayers should now be made to go through the hassle of proving their tax paid source of legitimate investment funds before being able to recuperate the 15%-20% of their capital deducted at source?

This is the more preposterous as in compliance with the statutory FSC rules governing investments, the source of investment funds has to be checked and validated by FSC accredited financial institutions to guard against money laundering, prior to accepting them.

Heaping more hardships

It should also be remembered that the iniquitous treatment and resulting hardships being imposed on investors trapped in the purported scam also carries the real risk that some of the elderly retired investors may not be able to claim back the 15%-20% deducted from their hard-earned capital nor be there when their debentures mature in the next five years. Heaping such human hardships over the anguish of investors cannot be the hallmark of a caring government. The present approach of deducting 15% or 20% of the capital at source is tantamount to considering every one of the 6,362 investors as tax evaders when there is no evidence of this.

Apart from being discriminatory, such an approach is certainly excessive, high-handed and a source of tremendous hardships to the investors. As has been the case for the other victims of the alleged scams, the rule of reimbursement of the capital invested in full should be applied without discrimination, to all investors.

The MRA has done a fantastic work in extending tax collection to the majority of taxable income earners. Let the MRA do its job separately as they certainly have the expertise and competence to identify and target those that should be investigated should the tax data they hold or circumstances warrant investigations in specific cases. This would allow them to use their resources more judiciously. It should not be the other way round i.e. holding the multitude of anguished bona fide investors to ransom on the unproven presumption of some bad apples in their midst? Why should lawful investors and compliant tax payers be unduly penalised through no fault of theirs?

This questionable approach certainly gives the perception of acting in a trial and error mode. Has the government been belatedly primed on tax implications? If so, the onus is on the MRA to do its work independently. We must remember that the thousands of people who invested in BAM, an FSC accredited Investment Company, did so in capital protected investment instruments meant to have been checked and validated by the regulators. It is therefore disconcerting to now know that since January 2014 instructions had been given by FSC to Bramer Asset Management to stop marketing certain investment products as it had infringed statutory rules. Why was there not a public communiqué issued to warn investors as well?

Such a breach in financial governance has led investors to unsuspectingly continue to invest in banned investment instruments or to renew their investments during a period of more than a year till when the truth about financial improprieties was uncovered in April 2015. This serious lapse in judgement has cost investors dearly. Who will bear these costs? Shouldn’t investments made during that period be made good forthwith in full?

Acting fairly

It must be remembered that savers and investors in BAM comprise pensioners who invested their lump sums, pension funds and savings set aside by people from all walks of Mauritian life. These investments were made from funds saved by people for diverse future needs such as the education of their children, as a financial safety net for their old age or to cover the very high costs of pointed medical care in case of illness as insurance companies do not insure the retired and the elderly. Under these circumstances, the staggering of the repayment of the capital invested over a five-year period through debentures is bound to cause hardships to the investors and disrupt their forward plans. Government must therefore take these considerations on board and ensure that every effort is made to urgently recuperate the funds despoiled at the earliest so that the capital of the victims is, if possible, reimbursed earlier.

Unlike the victims who for the most are presently out of pocket, the government has the resources, international reach and clout to recuperate the billions of Rupees of investors’ funds which are alleged to have been siphoned away abroad into tax havens or in assets overseas. Let this process be pursued with diligence and purpose.

However, the inclusion of the caveat of a full and final settlement debars investors from seeking damages for the immense prejudice caused to them from all those who have orchestrated or abetted the apparent massive haemorrhage of funds. Aggrieved investors cannot be hobbled against taking such legitimate actions and this constraining legalese must therefore be waived to enable legal actions envisaged by them to be pursued.

The proposal of deducting 15% to 20% of their capital invested in BAM at source is therefore discriminatory and unfair when compared to the multitude of investors and other victims of the BAI/Bramer alleged scam who are being paid their capital in full. The pervasive financial imbroglio has already caused tremendous collateral losses and hardships to bona fide investors. Under the circumstances, the least that can be done is to ensure that the equitable and paramount principle of equality of treatment prevails and benefits all victims of the purported scam alike. It would therefore be fair and in order for a government of the people to take the corrective decision that this is so.

*  Published in print edition on 5 June 2015