In the National Assembly Minister Adam clarifies sale of Sacos apartments |10 April 2019

The Sacos Insurance Group’s decision to sell off its residential apartments thereby evicting its tenants, was the subject of a private notice question by the leader of the opposition Wavel Ramkalawan in the National Assembly yesterday afternoon

Health Minister Jean-Paul Adam who was standing in for Finance, Trade, Investment and Economic Planning Minister Maurice Loustau-Lalanne answered the question with the support of the principal secretary for finance, Damien Thésée and Attorney General Frank Ally.

Hon. Ramkalawan wanted the minister to clarify the Seychelles Pension Fund’s (SPF) part in this decision since it is among Sacos’ significant shareholders, the reason why the government opted out of buying these apartments and the government’s contingency plans for tenants who are expected to be evicted this month.

“The Seychelles Pension Fund (SPF) is a minority shareholder in Sacos. It has 20.64% shares and these are through its 1.33% direct shares as SPF and its additional investment in Sacos through the Opportunity Investment company limited, in which SPF has 51% and another company [SWAN Group] holds the other 49%,” Minister Adam explained.

He clarified that not only is the SPF a minority shareholder, but also that Sacos is a private company that is led by its board of directors, a chief executive and management team.

During his interventions, Minister Adam continuously stressed that the government cannot intervene in a private company’s operations and internal decisions, not even through the SPF that has a two-chair representation on the Sacos board.

“SPF is not the government and the government does not control SPF,” Minister Adam further remarked.

Minister Adam noted that SPF had made a resolution for its investments in various companies and other assets to yield a return of investment of 9%, and that the Sacos rentals were not providing such satisfactory turnover.

“Its role as a shareholder is to ensure that it takes actions in the interest of its members and ensures that its investments are going according to its investment plans,” Minister Adam added.

In regards to the government’s decision not to purchase the Sacos apartments, he noted that Sacos had initially offered the government the opportunity to buy off both its apartments and land assets but that it “made more sense” for the government to only acquire the land parcels.

The land assets purchased from Sacos include parcels in Ma Joie, English River, Anse Royale, Sans Soucis, La Gogue and Béolière.

“The government chose to not purchase the apartments but rather purchase the land assets for the sum of R35 million,” it was revealed.

This means that the government has added up a total 117,541 square metres to its land bank reserves.

“Acquiring the apartments would not have contributed to the housing stock and would have represented an investment cost that will have added up to more than the government would have paid if it was to build apartment buildings from the ground up,” added Minister Adam.

Minister Adam further clarified that the tenants Hon. Ramkalawan spoke of and who are expected to be evicted this month, are residents of the Sacos apartment in Pointe Larue.

Two previous apartment complex purchases had been finalised last year, he noted.

“Even if we understand and have sympathy for Seychellois who are asked to move out of a residential area, we have to be reminded however that this is an issue between a private operator and its tenants,” Minister Adam highlighted.

Nonetheless, Minister Adam stated that the remaining tenants residing at the complex have the right, under the Control of Rent and Tenancy Agreements Act, to not move from their current place of residence.

“The majority of the people living there have already left and some have decided to stay. It is important for the government to inform these tenants that they have the right to stay there under the law until they figure out other options,” explained Minister Adam.

He cautioned them to seek further legal advice and also remarked that the government has mechanisms and legislations in place that can help protect them.