FPAC continues with its public hearings |17 August 2023
The Disaster Risk Management Division team before the FPAC
The Finance and Public Accounts Committee (FPAC), chaired by the leader of the opposition in the National Assembly, Hon. Sebastien Pillay, yesterday continued with its public hearings on the financial account of ministries, government departments and agencies, based on the audit findings of the Auditor General’s report of 2021.
The committee also comprised its vice-chairperson, Hon. Terence Mondon, and other members namely, honourables Churchill Gill, Richard Labrosse, Georges Romain, Conrad Gabriel and Sandy Arissol.
The session yesterday was with the Ministry of Finance, National Planning & Trade followed by the Tax and Customs Agent Board and the Disaster Risk Management Division.
Ministry of Finance, National Planning & Trade
The delegation before FPAC were Patrick Payet – Secretary of State (SS); Irene Croisée, executive director; Astride Tamatave, comptroller general; Jude Commettant, deputy comptroller general and Judeth Dodin, the acting chief accountant.
One question put to the ministry was the non-payment of dividend by the Land Marine Limited (LML) to government for the year 2021.
SS Payet said that the standing dividend by the company was transferred into the government’s account in July 2022 and it can be seen in the 2022 report.
He explained that given the Société Seychelloise D'Investissement Limited (SSI) was handling the affairs of the company, money from LML was transferred to SSI for payment but as SSI was in the process of changing its signature, there was a delay in transferring the dividend to government coffers.
SS Payet noted that there was also a delay in the 2021 payment of dividends to government from the Ile du Port Handling Services Ltd (IPHS Ltd) and the Indian Ocean Tuna (IOT). Their transfers were made in April 2022 by SSI, which was also overseeing their operations.
The sum transfer by SSI from LML was in two portions – R2.6 million (2021) and R2.8 million (2022). There was R23.8 million from IOT and two portions of R8.4 million (R16.8 million in total) from IPHS.
Government has 40 percent shares in both IOT and IPHS and 10 percent shares in LML. It is to be noted that IOT pays dividends in euro (€1.5 million in 2021).
With regard to its own interest, SS Payet said that government has structures in place to ensure that it receives the right dividend and is also present at board and annual general meetings to engage in discussions and approvals of dividends to be shared among shareholders.
Hon. Pillay questioned the comptroller general, Astride Tamatave, as to whether the government was happy with the R23.8 million in dividends from IOT compared to that of Seypec, which paid R250 million in 2021.
Ms Tamatave said that given the tuna company’s turnover is based on a guaranteed profit rate as stipulated in the shareholders agreement, calculated on each statistical equivalent case sold by the company, the dividend to government comes only after IOT has converted its annual statistical equivalent case profit into fix euro rate (€1.4 per case) to be shared between Thai Union and SSI at 60 percent and 40 percent respectively.
She noted that from the 40 percent, long service allowance and loans are deducted, while the rest is left as dividend.
Apart from the three entities mentioned above, NouvoBanq, Seychelles Commercial Bank, Seychelles Fishing Authority, Seychelles Ports Authority, Seychelles Petroleum Company (Seypec) and the Financial Services Authority are among the main companies paying dividends to government.
In regards to money collected so far from sales of government assets, SS Payet said that R2.3 million have been collected as at June 2023. Giving an explanation to Hon. Sandy Arissol as to why a military vessel belonging to the Seychelles Coast Guard valued at R19.6 million was sold at R320,000, the deputy comptroller general, Jude Commettant, explained that it was not a military vessel but rather scrap metal.
He noted that the boat was evaluated at US $1.3 million and for that sum they sought the direction of the cabinet who advised on the disposal of the vessel as scrap metal.
He added that they got a sale quotation from a scrap metal company for US $40 per ton of metal which amounted to R320,000.
He explained that the vessel was decommissioned of all its equipment before being sold as scrap metal.
SS Payet said that the ministry has set up a new asset management unit to oversee the management and sale of government assets, including those being seized.
With regard to the recovery of R7.9 million advancement to the former Seychelles Marketing Board (SMB), SS Payet said the settlement case is sub judice and it cannot be commented on for the time being.
As for recovery of the R23 million in taxes owed to government by local businesses, acting chief accountant, Judeth Dodin, said that they will be working with the business owners to ensure that they pay their dues.
With regard to the country’s subscriptions to international organisations, where R46.3 million were paid above the original budget of R34.9 million, SS Payet said the increase was due to arrears and fluctuations in foreign exchange.
With regard to a liability of US $2.1 million to the pan-African finance institution, Shelter Afrique, where no documents are available to support the investment, SS Payet said that the increase in liability was because the country failed to attend the bank’s annual general meeting. He noted that discussion with the bank was ongoing to see if government must pay the liability.
Tax and Customs Agent Board
The chairperson of the six-member board, Charles Morin, was the sole person from the licensing body before the FPAC panel. According the Auditor General report 2021, four receipt books in the name of the board were registered in the register of accountable documents at the Treasury but at the time of audit only three have been remitted. The three receipt books have all together accounted for R12,850 in tax collected by the board from January 2019 to December 2021. Hon. Gill queried on the whereabouts of the fourth one.
In his explanation, Mr Morin said that when the new board was appointed, they were aware of only three receipt books. He added that if a fourth receipt book existed, then it would have been in the possession of the previous board. He noted that they went through files and receipts and they did not find any reference from the missing fourth receipt book.
With regard to late banking of revenue, Mr Morin stated that they opted to transfer the cash to the ministry for banking purposes, while they only receive receipt copy of the banking transaction for proof filing.
Risk and Disaster Management Division
The director general of the division, Robert Ernesta, was accompanied by assistant administration officer, Maggie Dugasse.
FPAC wanted clarification with regard to 10 payments under Goods and Services valued at R230,750, that were made from January 2020 to the time of the audit process in April 2021, where documents were not in conformity with the Public Financial Management Regulation (PFMR).
Mr Ernesta explained that both he and his colleague were not employed with the division at the time but have been able to retrieve all the supportive documents relating to the above spending.
With regard to catering services amounting to R73,100 where no supportive documents were found during auditing, Mr Ernesta said that although he had no idea if the procurement for the takeaways, presumably for its staff and staff of other entities during the Covid-19 pandemic, was made according to the regulation, the division has information from where they were procured and the amount issued as per responders on duty.
He noted that the division used to procure consumable foods in the past and since taking office he had refrained from such practices for procurement of takeaways when necessary.
Speaking about missing information with regard to fuel coupons amounting to R247,625, Mr Ernesta said the previous administration had no proper monitoring of transport where drivers also kept transport with them at night for no reason. He noted that since taking office in August 1, 2021, he had revised the old system and installed a new transport and fuel monitoring system, which is working effectively.
Patrick Joubert
Photos: Contributed
