I recall the IBL boss crossing swords with the then Minister of Economic Development, Financial Services and Corporate Affairs quite some time back in 2003.
He quoted these interesting lines from the World Bank Corporate Governance Report, "The ownership structure of Mauritius companies is dominated by a small group of family-owned companies. Many family-owned companies listed their stock in response to tax and other incentives provided by the Mauritius government. Despite the stock market listings, many of the listed companies are still controlled by a family holding company or a partnership acting as the holding company. These holding companies often control a range of diverse enterprises and typically own vast landholdings that have failed to produce satisfactory earnings. Unlocking shareholder value in such firms is a key issue for the economy."
Recall that at that time, with the Sugar Efficiency Act 2001, there was “la levée de boucliers” from the family-controlled businesses.
The IBL boss was not too happy with the reference to the characteristic feature of mauritian business which is dominated by a few large companies,especially the peculiarities of share ownership of some of the listed companies on our Stock Exchange.
He commented condescendingly ,as usual , but with an underlying communal undertone, that the Minister’s statement has caused a “froid “ to subside on the Mauritian business community in that special context where there was a tendency to escape to our traditional cocoon of communal identities.
By encouraging an elitist system that has kept predators at bay through cross-holdings and by preserving the wealth and power of a few families and big banks , have they been encouraging “cohesion , paix sociale et diversité” ?
The economic logic of the reform was that the inter-locking ownership between companies and banks was distorting the allocation of credit and preventing the evolution towards a well-functioning competitive financial structure. Its aim was to improve the conditions for greater value and wealth creation; good corporate governance attracts larger flows of much needed capital and allocates these more efficiently for investment and growth.
By improving accountability, responsibility and independence, a company can achieve a better resolution of conflicts between its various stakeholders, and ensure that controlling shareholders do not dominate at the expense of minority shareholders.
The WB Report on the Observance of Standards and Codes (2010) noted a lack of reporting of ultimate ownership and control, which limits the effectiveness of rules on conflicts of interest. In practice, many companies do not disclose indirect ownership or cascade holding structures, and it is difficult to understand ultimate beneficial ownership and control, even for the largest companies. In many cases, ultimate shareholders are sociétés civiles, with the names of the individual members of these sociétés not being disclosed and/or readily obtainable.
For years, nous vivons cette situation sans fiertè !!!!
So please, spare me this “hypocritical nonsense about their concern for cohesion, etc “
We should avoid the hysterical reactions that prevent us from sifting the wheat from the chaff and paying homage to the few ones who do not dance to the tune of the piper but to that of their own proven logic.
