Britam boss linked to Mauritius bank scandal on Ponzi scheme

Britam has come out to dissociate itself from a multibillion-shilling scandal facing a Mauritius bank, in which the investment firm’s director and top shareholder, Mr Dawood Rawat, holds a similar position.

The Bank of Mauritius last week cancelled the licence of Bramer Banking Corporation Limited (BBCL), which is part of Mr Rawat’s Seaton Investment business over suspicion that the lender was running a high-scale Ponzi scheme.

The action is said to have resulted from a $693 million (Sh63.7 billion) scam, whose discovery led to a serious liquidity crisis for the lender.

Britam has, however, sought to allay fears of related party exposure in the scandal that touches on the county’s largest diversified financial services firm and which could be a source of concern to its 25,000 shareholders and investors.

The Nairobi Securities Exchange-listed firm said that while the two entities share directorship, Britam operations cannot be affected by the action by the Bank of Mauritius.

“There is common directorship between Britam and Bramer Bank Corporation. However, Britam is managed through an independent board of directors and management,” Britam company secretary Nancy Kariuki said in a statement issued in Nairobi on Tuesday.

Mr Rawat has been a director at Britam since late 2013 alongside his nephew, Mr Moussa Rawat.

The Bank of Mauritius, which regulates the country’s banking industry, said Mr Rawat was planning to transfer about Sh3.5 billion from Kenya to the troubled Bramer Bank Corporation on April 4, according to press reports in the island nation.

“Bramer Bank Corporation is not a shareholder of Britam Kenya,” said Mrs Kariuki, who sought to assure investors and customers that there was no party exposure to Britam in relation to the troubles facing Bramer Bank Corporation.

Mr Rawat was the single largest shareholder of Britam as of last year, with a 20.3 per cent stake in the diversified financial services group, followed by Mr Peter Munga, at 16.99 per cent, and Mr Jimnah Mbaru, at 10.28 per cent

Other top five shareholders include Ms Jane Michuki, Equity Bank chief executive James Mwangi and Britam boss Benson Wairegi, who collectively have 19.81 per cent.

Mr Rawat, whose stake in Britam Kenya is estimated at Sh10 billion, has been a non-executive director of the troubled Mauritius bank since April 2008.

Reuters news agency quoted the Mauritius prime minister as saying that the Bank of Mauritius had since appointed PricewaterhouseCoopers (PwC) as receivers for Bramer Bank Corporation.