Truth, Reconciliation and National Unity Commission – Hearing Number 98 |01 August 2020
MNA Florry Larue sheds light on the Cosproh flaws
Proportionately elected member for LDS in the National Assembly, Florry Larue, was a general witness in front of the Truth, Reconciliation and National Unity Commission (TRNUC) yesterday as part of her continuous effort and commitment to help in understating some issues concerning land in Seychelles.
Nicknamed the ‘Land Expert’, Honourable Larue focussed her presentation on the findings of the commission of inquiry tasked with investigating the disposal of immovable assets of former state owned enterprise, Compagnie Seychelloise de Promotion Hôtelière (Cosproh).
The only other witness before the TRNUC yesterday was former Chief of Defence Forces (CDF) Leopold Payet in relation to case 0110 brought forward by Regina Melanie in relation to the death of her son Timothy Lepathy.
In her introduction Honourable Larue explained that it is the utmost duty and task of the government to protect the assets of the state, something which she said was not the case in the Seychelles context in relation to Cosproh.
Appointed by President Danny Faure in July 2018, the commission has seen a delay of several months in concluding its inquiries into Cosproh.
Consequently, the commission’s term was recently extended until June 2020 after which it expects to submit its report to the president.
The appointment of the Commission of Inquiry was in response to the approval of a motion by the National Assembly on July 4, 2018 requesting the President of the Republic to set up a Commission of Inquiry. The motion read: ‘Vi ki in annan plizyer lavant propriyete Lakonpannyen Piblik COSPROH dan lepase, sa Lasanble i fer en demann pour ki Prezidan Larepiblik i etabli en komisyon lanket anba direksyon Oditer Zeneral pour fer en lanket detaye pour etabli si okenn dimoun oubyen lakonpannyen prive in benefisye dan lavant sa bann byen COSPROH, si ti annan okenn konfli lentere dan sa bann tranzaksyon, e si reveni gouvernman a okenn moman in ganny konpromet’.
Key conclusions of the report
In her presentation, Honourable Larue pointed the many flaws identified by the inquiry commission during the process of acquisition and disposal of Cosproh’s properties, including lacking of transparency, and possibly accountability, which was in keeping with the then prevailing political dispensation, while the absence of a Public Financial Management (PFM) framework encompassing rules and regulations was the key loophole in the functioning of government at that time.
Had there been the relevant laws, rules and regulations, such as, Public Procurement Act (2008), Public Financial Management Act (2012), Public Financial Management Regulations (2014), Public Procurement Regulations (2014) and Public Enterprises Monitoring Commission Act (2013) the processes would have been more transparent and accountable.
The oversight over Cosproh and corporate governance appears to have been generally inadequate, while parastatal companies, in general, and Cosproh, in particular, did not operate at arm’s length from the government.
They were possibly treated as extensions of government which resulted in opaque transactions; such as, payment of sale proceeds directly into the Treasury/Central Bank; off-the-books settlement of debts of parastatals by the government, providing ad-hoc working capital through advances or settlement of invoices without clear policy directives and ad-hoc liquidations and disposal of state assets.
It is also doubtful as to whether the disposal of Cosproh’s properties was undertaken at a fair price and through a competitive and transparent manner with the objective of maximising returns to the government of Seychelles.
It is equally doubtful as to whether a proper liquidation of Cosproh was undertaken whereby all liabilities were settled, and any remaining balance of proceeds was paid to the shareholder – the government of Seychelles.
The sale of profit making Fisherman's Cove Hotel Limited was not a prudent decision on the part of government and Cosproh, after investing heavily in infrastructure and entering into a 20-year operational lease agreement with Meridien (Seychelles) Limited, which guaranteed a lease income of approximately US $2 million per annum.
Some of the key findings
The transfer of state land (14) from the Republic to Cosproh for a consideration of R1 was in contravention of Section 6 (2) of the State Land and River Reserve Act 1903, as amended, (cap 228), which does not empower the government to transfer state land by free grant or at any other than its full value, except in the case of land required for religious, charitable, or educational purposes or for purposes of public utility.
Also, the transfer of land parcels (11) in excess of five (5) acres to Cosproh by government without following public tendering or any other system of seeking competitive bids was in contravention of Section 7 of the State Land and River Reserve Act 1903, as amended, (Cap 228), which provides that all sales of state land shall be by public auction, or by public tender, provided that sales of state land of up to five acres may be effected by private contract.
A significant amount of revenue in terms of stamp duty was foregone by government in almost all land transfers involving GOS, Cosproh, subsidiaries and the buying companies. Further, a statutory processing fee of US $45,000, recommended by the Ministry of Land in 2001, was foregone by government (Ministry of Finance) in respect of the sale of Indian Ocean Hotels
(Seychelles) Limited/Reef Hotel.
Valuation reports of the land parcels (or the land and buildings together for each hotel business unit) which were sold to various companies or individuals could not be found in evidence of the purported valuation exercises.
The retention of four (4) land parcels (PR2365, PR2335, J1996 and J807, measuring approximately 102,073sqm in total) still in the name of the liquidated company Cosproh (as of 2019) is an irregularity in view that the liquidation process should have ensured the disposal of all assets and liabilities; and actual documents showing cabinet decisions and sanction approval (except for IOHL/Reef Hotel) and board minutes and resolutions could not be found by the Commission in support of various important decisions relating to the sale of various land parcels and hotel properties.
Case 0110 – Regina Lepathy
Former Chief of Defence Forces (CDF) Leopold Payet was questioned by the commission yesterday in case 0110 brought forward by Regina Melanie in relation to her son Timothy Lepathy who was set on fire at the Union Vale Army Camp (UVC) on December 12, 1980, after being placed in a cell.
On the following morning while at the hospital, the late Timothy told his mother (Regina) that he was tossed into a cell before being set on fire by army personnel.
When asked whether Mrs Lepathy came to see him regarding the incident, Mr Payet categorically said no, but acknowledged that he saw a report confirming that Mrs Melanie went to see Ogilvy Berlouis who was the CDF at that time.
Mr Payet also explained that being a junior-rank officer at the Bel Eau headquarters at that time he had no business in dealing with case, but it was rather the duty of Macdonald Marengo who was the Commanding Officer at the UVC and the higher authority.
Island Development Company (IDC) right of reply
Following the presentation by attorney-at-law Antony Derjacques on Wednesday as a general witness to give an overview, or context evidences and understanding on the different perspectives of the 1977 coup and its aftermath, some of the mentioned parties have reacted, asking for a right of reply.
In a letter addressed to the commission, chief executive of the Island Development Company (IDC) Glenny Savy expressed the willingness of the company to appear before the TRNUC to give its views and set the record straight on various statements made by Mr Derjacques on Wednesday.
The letter stated that the company was surprised that IDC had been made the subject of such politically-charged assertions by Mr Derjacques to support his thesis that the IDC is the most extreme example of state control still existing.
In the letter, Mr Savy took several of Mr Derjacques’ stronger ‘assertions’ in turn and as conclusion he noted that the latter’s statements seem to emanate more from an ideological position rather than facts and commercial sets.
Roland Duval