Trading in shares of Bramer Banking Corp. of Mauritius was suspended after the lender’s license was revoked, its accounts transferred to another bank and the prime minister said there’s “evidence” of a Ponzi scheme.
The central bank pulled Bramer’s license “following strong evidence that BBCL is engaged in a Ponzi scheme which exceeds 25 billion rupees” ($690 million), Prime Minister Anerood Jugnauth told reporters in Port Louis, the capital, on Friday. An investigation is underway into what he called an “unprecedented financial scandal.”
A spokesman for British American Investment Co., which owns Bramer, who didn’t want to be identified, said by phone the company may issue a statement or hold a press conference later on Friday.
Bramer’s stock fell 40 percent this year before being suspended, the second-worst performance on the benchmark Semdex Index.
The lender came under scrutiny after the central bank of the Indian Ocean island conducted an on-site examination between Jan. 22 and Feb. 20 and found a “number of significant deficiencies,” it said in the statement. Bramer had “large withdrawals of deposits” that affected its liquidity and capital, the regulator said.
Trading will be halted until further notice, according to a statement on the website of the Stock Exchange of Mauritius. The Bank of Mauritius pulled Bramer’s license “in the public interest,” it said Thursday.
Bramer’s 30,000 deposit accounts will be taken over by State Bank of Mauritius, Finance Minister Vishnu Lutchmeenaraidoo told reporters in Port Louis Friday.
SBM, the country’s second-biggest bank, is owned by SBM Holdings Ltd.
After Bramer’s license was revoked, the Financial Services Commission of Mauritius appointed Andre Bonieux and Mushtaq Oosman of PricewaterhouseCoopers LLP as conservators of BAI Co., an insurance company also owned by British American Investment, “to safeguard the interests of policyholders,” the FSC said in a statement on its website.
Lutchmeenaraidoo said the government is looking for an insurance company to take over BAI’s 156,000 policies.
“At the level of government and of the Bank of Mauritius, we had to take a decision,” he said.
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