Sunday, April 19, 2009

The Seychelles Column - By Christopher Gill

Where Is The Forensic Audit?  By Christopher Gill

The Michel Administration has been big on talk about transparency in government but VERY SILENT on accountability. Thus far, we have only seen him bury issues in water drinking committees and we have yet to see any discrepancies highlighted or actions taken by his administration. According to Michel, all is on the up and up and all monies and resources are well accounted for under his Administration. Corruption does not exist in the Central Bank or his Government. It is found only in the Police Force, according to Michel Administration jargon. 

Well, as the birdie presidency continues to stick its head in the sands of Beau Vallon, we have a patriotic obligation to help him pull his head out of the dark sands of denial and help him breathe the air of our reality with us. If Michel fails to take appropriate action where corruption and funds have gone unaccounted for, and individuals have benefited improperly from ill gotten wealth, then we must campaign for his removal and his own accountability, to the People. We can also safely assume that he is also part of this grand scheme of fleecing our country for the best part of his five years at the helm. Failing that, we will join Michel in his drowning sorrows of incompetency, which places blame on everyone’s desk except his own – with the catastrophic risk of plunging this country into the abyss, buried under a mountain of debt which will burden our children’s children for decades to come.

Enter Price Waterhouse Cooper International Accounting Firm

To buy time and achieve some semblance of credibility at the Central Bank of Seychelles, the Michel Administration has engaged the services of Price Waterhouse Cooper (international accounting firm) to audit the books of the Central Bank after I wrote two articles on the matter in 2008: 1. ‘A Report on Corruption Allegations at the Central Bank ‘- Seychelles Weekly, October 31, 2008 and 2. ‘Seychelles Needs A Forensic Audit!’ -  Seychelles Weekly, December 12, 2008.

We are still waiting for the Michel Administration’s  action concerning these allegations which places  the state of finances of the Republic of Seychelles in an unfavorable (if not tainted) light,.

With all due respect to Price Waterhouse Cooper international accounting firm, for starters, we want the following allegations clarified to restore integrity to the Seychelles financial system managed by the Central Bank of Seychelles. By engaging in this exercise, Price Waterhouse Cooper takes on a noble task to shed some light on all these controversies and hopefully clarify all those dealings (murky or otherwise),  done in the name of the people of Seychelles. Let us all hope it does not take the path of the once Masters of the Universe, Lehman Brothers – and lose its credibility in the process!

Allegation One

Is it true that Francis Chang Leng, former Governor of Central Bank of Seychelles, used Sr.8 Million on personal related expenses in 2006-2007 for himself and his traveling staff?  If not, quantify all expenses Mr. Chang Leng made in 2006- 2007 and parts of 2008 for traveling, clothing, hotels, airline tickets, entertainment and correlate the expenditures with the related business.

 Allegation Two

Was Central Bank staff paid salaries that were disproportionate to corresponding EP levels in the Government of Seychelles?  In spite of the assumed independence of the Central Bank, is it acceptable for the Michel Administration to allow the abuse of salary structures for some sections of government, while causing to take leave 2,000 employees as part of its macro-economic program?

I call on Pierre Laporte to make public these salary structures and advise what reductions he has made if any while assuming the role of Governor of the Central Bank. If he has not made any reductions, I ask him to pronounce himself as to whether or not he believes the bloated salaries for some staff is justifiable at a time when he is implementing severe, painful measures that are adversely affecting the entire Nation. Just to keep things on the up and up, I ask Mr. Pierre Laporte to publish his own salary and perks received each year. While the Central Bank is independent, it is not free of the free blog press and the people have the right to question any elected or appointed officials that have been mandated to serve our Nation.

Allegation Three  

It has been alleged that as Mr. Francis Chang Leng’s days drew to a close, he was rapidly renovating the Central Bank of Seychelles building. As our economy was collapsing, the Central Bank underwent a renovation allegedly worth Sr.16 Million - Sr. 20 Million. 

I call on the international auditors of Price Waterhouse Cooper, to make public the expenditure and payments for this lavish renovation that is allegedly 15 million Seychelles Rupees over and above the actual cost of the building. There was no local tender for the project either – most of the expenses paid to a company in Singapore in precious foreign exchange.

 Allegation Four

As silence has prevailed by the Board of Directors of the Central Bank, it is now time to shed some light on them. 

Mr. Francis Chang Sam has been a Director of Central Bank by appointment as Attorney General. After his resignation as Attorney General, he maintained his directorship and assumed the role of legal counsel to the Central Bank. Mr. Chang Sam is also the personal counsel to Francis Chang Leng and a close friend. 

I ask that Price Waterhouse Cooper disclose all the legal fees paid to Francis Chang Sam for all the transactions involving Lehman Brothers bonds, most recently, the $230 million bond issue and the dubious Euro 54.75 million private bond issue. Include the payments which were made to offshore accounts and not in Seychelles, if any. Balance these payments with what is legally acceptable to charge as fees in Seychelles. Please bear in mind that at the time, it was illegal for a Seychellois to transact in foreign exchange, unless approved by the Central Bank. Finally, recall well, that Mr. Chang Leng was already a Director of the Central Bank, hence retained to give advice already. Additional sums if received would not be in order and will demonstrate a high degree of lack of professionalism, ethics and integrity.

Allegation Five

It is alleged that the former Governor of the Central Bank is still drawing a monthly Sr.32, 000.00 pension which is not in his contract or provided for under the Central Bank Act of 2004. Is this part of the golden parachute deal he cut with President James Michel?

We ask the JJ Spirit team to clarify with Price Waterhouse Cooper, whether or not, it is appropriate for an ex-Governor of the Central Bank to receive an ongoing retirement pension of Sr. 32,000.00 per month, when it was not in his contract of employment in the first place, especially in these difficult economic times when ordinary workers are being laid off?

Allegation Six

It is alleged that Mr. Chang Leng received a termination package of Sr.1.3 Million. This package is not provided for under the Central Bank Act 2004 nor is it part of his contract. If this is true, can Price Waterhouse Cooper recommend that this money be returned to the People of Seychelles? 

It is further alleged that this package was never passed by Central Bank Board resolution. If true the Board of the Central Bank is a melting pot that cooks chicken, beef, pork , fish curry and other nasty things at the same time and ought to be disbanded immediately to restore credibility to the Bank. 

Allegation Seven

I ask Price Waterhouse Cooper to determine through forensic audit, how much money was really disbursed in the Tokyo Mitsubishi Bank loans. What commission money was paid and how were funds expended. Which accounts did that money go to in its totality? How much did Mr. Chang Sam and Mr. Chang Leng receive if any, directly or indirectly? Please set the record straight.

Allegation Eight

I ask Price Water House and Cooper to also investigate the Citi Bank facility transactions and the ABN AMRO loan deals for the same details and make them public. Were Directors upholding their Duty of Care or were they careless? 

Were any monies deposited in Liechtenstein offshore companies and accounts belonging to Mr. Chang Leng and cohorts to defraud the People of Seychelles?

There are more points to highlight concerning other Directors, if they do not press for accountability upon Mr. Pierre Laporte, to cause Price Water House Cooper to get to the bottom of this alleged gross abuse of public funds. I will refrain from chopping the bamboo gardens at one go. Now muster your courage Directors, before your fate becomes a bamboo fish trap similar to the resignation of your master ex- Governor Francis Chang Leng.

I call on the Leader of The Opposition to insist on the creation of an independent Committee that will review and make recommendations for prosecution if necessary, resulting from the audit of the Central Bank of Seychelles accounts by Price Waterhouse and Cooper. It is the very least that we can do in the spirit of openness and accountability. It is our duty to curtail the abuse and bring to justice those who keep using their position of high office to fleece our country of its meager financial resources for their own personal benefits.

Corruption is the root of all evil and the cancer that is eating at the core of our society. The Michel Administration now needs to engage its muscles into action to rid our country of this scourge once and for all. We are still waiting on the famous ‘Judge me by my actions’ President who promised a new departure of a clean government. If he is unable to clean up the past acts of the Central Bank and its shady ex-Governor then it is beyond reasonable doubt that he is the main conductor of this cacophonic orchestra that is all out to fool its people in order to maintain its power at all costs, while the pillaging continues unabated – with the man at the helm conveniently turning a blind eye...  

 If this does not get birdie to pull his head out of the sand, then do not say that I did not tell you so. The storm is already upon us. The ostrich syndrome will sink us even further into this black hole.

My intermediary advice to Mr. President is this. Start getting used to not having coffee in the morning with Mr. Chang Leng to scheme on how to keep these best kept secrets under wraps. Remember, where it concerns the People's money, there is no compromise SPPF. The truth will come back to haunt you.

May God Bless All Freedom Loving Seychellois and Our Beloved Seychelles!





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