Investigation into sale of Seychelles Pride ‘A number of legal provisions were not followed’ |23 February 2022
Minister Hassan flanked by SS Payet (left) and Mr Tirant during the press conference on Monday (Photo: Joena Meme)
The Minister for Finance, Economic Planning and Trade, Naadir Hassan, has said that following an investigation by the Public Enterprise Monitoring Commission (PEMC), it has been found that a number of legal provisions were not followed by Seypec under the company’s act in regards to the sale of one of its tankers, Seychelles Pride.
These include a number of deficiencies in the oversight and governance of the institution and that the money from the sale agreement was received in a newly created special account which had not been approved by the board.
Minister Hassan made the comment in a press conference on Monday on the findings of the investigation of the sale, following a chain of events that led government to mandate PEMC to conduct an audit into the process for the sale of tanker Seychelles Pride owned by the Seychelles Petroleum Company Limited (Seypec) which resulted in the suspension of its chief executive (CEO) Conrad Benoiton. The sale of Seychelles Pride was concluded on January 12, 2022.
Also present at the press conference were the secretary of state and principal secretary for finance, Patrick Payet, and the chief executive of PEMC, Georges Tirant.
Minister Hassan acknowledged that the five board members of Seypec, including CEO Benoiton, did initially approve for the sale of the Seychelles Pride as per the company’s replacement strategy but this was subject to approval of the cabinet of ministers as per the requirement of the law, a procedure which was not followed.
The minister said that in the meantime, the reinstating of Mr Benoiton, who has been suspended on full pay, will be decided in a meeting to be held during the course of the week between government and the board of Seypec. He has been temporarily replaced by the company’s general manager commercial, Sarah Romain, as the interim CEO at the request of the board.
Minster Hassan said that a total of approximately US $6.2 million (US $5.88 million for the vessel and US $400,000 for other materials onboard) was gained from the sale of Seychelles Pride to which the money was first deposited in the newly created account on January 10, 2022, and which had proper authorisation. The money was later transferred into Seypec’s current account on January 20, 2022 by the interim CEO Romain. He acknowledged though that the money did tally the amount from the sale transaction.
Minister Hassan said that he received a call on January 17, 2022 from President Wavel Ramkalawan, querying on whether it was true that the Seychelles Pride had been sold.
He added that as he was not aware of the sale, he checked on the minutes of Seypec’s board meeting, had a conversation with its chief executive Conrad Benoiton and eventually with its chairman, Selwyn Gendron, where he learned that the tanker had been sold in isolation of the public financial management act.
Minister Hassan stated that on the same day that he held the conversation on the matter with the CEO and chairman, there was an attempt by the CEO to amend the original minutes of the board meeting of September 2021 and based on that and other issues, and upon discussion with the President, the decision was that it was prudent to launch an investigation into the sale of the Seychelles Pride.
He further stated that it was to allow for an objective, transparent and independent investigation that Mr Benoiton was suspended pending the outcome of the investigation.
Minister Hassan said that the attempt by Mr Benoiton to amend the officially signed minutes of the board meeting happened after he had inquired into the sale of the tanker.
He added that it was chairman Gendron who raised the issue with regard to the unauthorised account for the sale transaction of the tanker and about the alleged attempt to amend the minutes of the board meeting.
Speaking about some of the recommendations from the report of the investigation, Minister Hassan said they include the need to strengthen the aspects of governance and oversight at Seypec in regards to operation and control, a more detailed and in-depth operational and financial audit, ie… the tanker business, to prevent Seypec from landing in the same situation like Air Seychelles, among others.
He said it is in his opinion that the strengthening of governance and oversight, including capacity building, must also be undertaken at other state-owned enterprises (SOEs) as some of them have many deficiencies.
As to what was the purpose of the representative of government on the board of Seypec, Minister Hassan said that a board member is represented as an individual to contribute to the success of the assigned entity and not to report on the entity’s doings to government.
He said it is PEMC who is mandated to oversee the functions of the entities.
For his part Mr Tirant said that PEMC did not receive the minutes of the meeting from Seypec as required by law.
He noted that if Seypec had come to PEMC, the commission could have advised the company to prevent such eventuality.
He said that PEMC has requested for an increase in the number of board members (to a maximum of eight members as the law requires) for better consultation and for the introduction of an audit committee.
Mr Tirant said that the new account that was opened for the sale transaction was not fraudulent but the board should have known about it as it also had the signature of an ex-employee which is not the norm.
He said that the vessel was not sold through tender because according to Seypec it would have fetched less given its age and capabilities when considering two evaluations conducted prior which the current sales fall within the evolutions.
He noted that it would have been better if the sale had been done through open bidding for the sake of transparency.
Patrick Joubert