(No. B/636) Mr R. Jhummun (Second Member for Rivière des Anguilles & Souillac) asked the Prime Minister, Minister of Defence, Home Affairs and External Communications, Minister of Finance, Minister for Rodrigues and Outer Islands whether, in regard to the then COVID-19 Projects Development Fund, he will, for the benefit of the House, obtain information as to who authorized the deposit of Rs 3 billion thereof into the Silver Bank in 2023, indicating whether the selection of the said bank was made pursuant to a bidding exercise. The Ag. Prime Minister: Madam Speaker, the COVID-19 Projects Development Fund, now known as the Projects Development Fund, was set up on 28 April 2020 as a special fund by way of regulations made under the Finance and Audit Act. The Fund is administered and managed by the Projects Development Committee. Madam Speaker, I am informed that the Projects Development Committee had invested a total amount of Rs3 billion in Silver Bank Limited in 2022 and not in 2023 as mentioned in the PQ. The investments were made on three occasions as follows – (i) Rs500 million in April 2022; (ii) Rs500 million in August 2022, and (iii) Rs2 billion in September 2022. At that time, the Committee was chaired by the former Financial Secretary and comprised representatives of the Prime Minister's Office, Ministry of Finance, and the Bank of Mauritius. The Committee also comprised the Accountant General, an officer from the Attorney General's Office, a former Adviser of the Ministry of Finance, as well as three representatives from the private sector. All these investments were made following the approval of the then Minister of Finance as provided for in the Finance and Audit Act… An hon. Member: Savat dodo! The Ag. Prime Minister: … and the Finance and Audit (Projects Development Fund) (Amendment) Regulations 2020. Madam Speaker, all these investments were made despite the former Minister of Finance being aware that the Silver Bank had the following systemic issues – (i) The Silver Bank was a newly constituted bank, being given that on 11 June 2021, the Board of the Bank of Mauritius approved the acquisition of the shares on Banyan Tree Bank by the shareholders of Silver Bank. The Banyan Tree Bank was itself a problematic bank. (ii) The Silver Bank had at its inception a shareholding structure not in conformity with the provisions of the Banking Act 2004, which stipulates that no single shareholder should hold more than 10% of shares in a bank, except with the prior approval of the Bank of Mauritius. In fact, approval for a 75% shareholding to a single shareholder, in this case, Ginni Gupta, was given by the Bank of Mauritius and this tantamount to endangering existing and future depositors, and (iii) Silver Bank had difficulties in appointing an external auditor to perform the mandatory auditing of its accounts. Madam Speaker, again, we must highlight the weakness in the supervisory role of the former management of the Bank of Mauritius. The representative of the Bank of Mauritius on the Projects Development Committee intimated that investment in Silver Bank, at that time, was safe as it was being supervised by the Bank of Mauritius. Despite knowing all these systemic issues, the former Minister of Finance gave his approval for these massive investments of public funds into such an ailing bank. With the unfolding of all the facts today, it is clear that this was a wrong decision to invest public funds in such a bank. An hon. Member: Shame! The Ag. Prime Minister: Madam Speaker, let me come to the process for investing Rs3 billion into the Silver Bank Limited. With regard to the first investment of Rs500 million, on 05 April 2022, the Projects Development Committee received an investment offer from Silver Bank Limited through the Ministry of Finance for its consideration. On 06 April 2022, the Committee sought quotations from four other commercial banks. Quotations were received from two banks, namely State Bank (Mauritius) Ltd (SBM) and Bank One Ltd. On the basis of an evaluation of the quotations made by the Projects Development Committee and taking into account the offer from Silver Bank Limited, the Projects Development Committee agreed to invest Rs2.5 billion as follows – • Rs500 million in Silver Bank Limited; • Rs1 billion at SBM, and • Rs1 billion at Bank One. The approval of the then Minister of Finance was accordingly sought and obtained for the investments. As regards the second investment of Rs500 million, on 11 August 2022, the Projects Development Committee received another offer from Silver Bank Limited through the Ministry of Finance. The Committee invested Rs500 million directly into Silver Bank Limited after seeking and obtaining the approval of the then Minister of Finance. Concerning the third investment of Rs2 billion, on 31 August 2022, the Projects Development Committee sought quotations from various commercial banks. Quotations were received from six commercial banks, including Silver Bank Limited. On the basis of an evaluation exercise, the Committee invested Rs2 billion in Silver Bank Limited, again after having sought and obtained the approval of the then Minister of Finance. Madam Speaker, out of the Rs3 billion invested in the Silver Bank Limited, Rs500 million are still outstanding and there is no certainty of its recovery. It is regrettable that the decision to invest so much of taxpayers' money was made only on the basis of higher returns without any consideration at all of the risks involved. Madam Speaker, basic principles of portfolio investment stipulate that investment decisions must consider both returns and risks. Clearly, the risks associated with the investments in Silver Bank Limited were prohibitively high. It is incomprehensible that such investments were made and with the support of the protégés of the previous regime at the Bank of Mauritius. There is definitely anguille sous roche! The Financial Crimes Commission is currently investigating into this whole financial scam.