Betamax, Law and Ethics

It will be a matter of concern if it was established that the government did a disservice to the country’s international image by acting without following due process

 The Office of the Director of Public Prosecutions (DPP) took the decision on 23rd November not to press charges against six defendants in the Betamax case, notably

(a) Dr Navinchandra Ramgoolam, former Prime Minister of the Republic of Mauritius (Defendant No. 1)

(b) Anil Kumar Baichoo, former Minister of Public Infrastructure, Land, Transport and Shipping (Defendant No. 2 )

(c) Veekram Bhunjun, Company Director of Betamax Ltd (Defendant No. 3)

(d) Reshad Hosany, former Permanent Secretary at Ministry of Business and Enterprise (Defendant No. 4)

(e) Ranjit Singh Soomarooah, former General Manager of State Trading Corporation (Defendant No. 5)

(f) Kalindee Bhanji, Permanent Secretary at Ministry of Business and Enterprise (Defendant No. 6).

It may be recalled that the government which was in place between 2007 and 2009 took a series of decisions which ultimately resulted in a shift of the transport of petroleum products for the country from foreign companies to a local company, Betamax Ltd. After effecting a number of legislative changes, involving appointing a French consultancy, then differently constituted Ministerial Committees in decision-making on different occasions and, finally, securing comfort from a local consulting firm on the numerical aspect of the offer made by Betamax Ltd, a contract of affreightment was signed on 27th November 2009 between the State Trading Corporation (STC) – which is in charge of bulk import and sale of petroleum products – and Betamax Ltd.

Betamax accordingly obtained the exclusive “captive” right to transport our petroleum requirements over a period of 15 years in association with a Singapore company. Betamax had been found to be the most apt for the purpose by a French consulting firm specifically appointed to make a recommendation from out of the 6 local companies having expressed an interest in the transaction, following Cabinet’s earlier decision to henceforth employ a local company for petroleum transportation.

The new government which took power in December 2014 suspected that the manner in which the contract for the transportation of petroleum products had been awarded to Betamax Ltd was unlawful and that it involved cases of bribery and corruption. Another transporter of petroleum products has thus been appointed, on the understanding that it would cost less than in the case of Betamax.

In a classic case of putting the cart before the horse, the new government rescinded Betamax’s contract before it was firmly established, following proper procedures – full-fledged investigations establishing miscarriage and a court decision confirming the same — that the contract had actually been awarded by violating laws and rules of good conduct in public procurement. Betamax has instituted an arbitration case against the government in Singapore, considering that there has been breach of contract due to the government’s unilateral decision to rescind the contract arbitrarily. The decision of the Arbitration Court is awaited.

It was in December 2015 that the DPP was in presence of the case file from the police which had carried out its investigation in the matter, calling for various distinct charges – for alleged offences of bribery of public official, forgery, conspiracy and related offences under the Prevention of Corruption Act and the Public Procurement Act – to be levied against the six abovementioned defendants. According to a public statement dated 23rd November 2016 explaining the decision arrived at by the DPP’s Office, it is stated that the police were asked again on 3rd March 2016 to carry out further enquiry in a bid to establish that the charges stand a good chance to be upheld by a court.

After considering all the evidence placed before his office, the DPP states in the public statement explaining his decision that the investigation carried out and submitted to his office was insufficient to meet “the evidential test of reasonable prospects of securing a conviction”. This is the legal position.

In other words, given all the events precedent, including exempting the STC from having to comply with the Public Procurement Act and having this version of the law approved by Parliament before the contract was allocated to Betamax and given also the direct implication of various parties in collective decision-making at Cabinet and STC levels, the DPP’s Office has not been able to establish beyond reasonable doubt that the charges being levied are contrary to law as it existed at the time the Betamax contract was signed up (2009).

One may come to the conclusion that the police would not have done the investigation to the level of detail needed in the case to be able to convince a court of the charges being levied. Alternatively, one may come to the conclusion that decision-makers at the time the contract was being awarded plugged very carefully all possible loopholes, whether in the law or in administrative procedures, to make themselves fully immune from prosecution should any objections be raised. Whichever version is taken, the fact is that on the basis of evidence which has been culled up, the legal case drops for the time being.

In the meantime, the country is faced with a serious dilemma.

Should the Arbitration Court moved by Betamax in Singapore come to the conclusion – as in the case of the DPP — that the government rode roughshod on its contractual agreement, the country would become liable to pay damages to the aggrieved party. Let alone the pecuniary considerations, it will be a matter of concern if it was established that the government did a disservice to the country’s international image by acting without following due process, even if it had a point.

Murli Dhar