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Banking and Finance

Mauritius Halts $693 Million Ponzi Scheme at Bank

 The Prime Minister of Mauritius announced that regulators had halted a $693 million Ponzi scheme being run at a publicly-traded national bank that touted itself as "one of the fastest growing banks in Mauritius."  Bramer Bank (the "Bank"), which had been licensed by the Bank of Mauritius to conduct banking activities since August 27, 2008, had its banking license suspended and regulators appointed PricewaterhouseCoopers as a receiver.  Shares of the company's stock, which last traded at approximately $.11 on the Stock Exchange of Mauritius, have been suspended.

According to a cached version of the Bank's website (as the site is current unavailable), the Bank:

is part of the British American Investment Group, a premier conglomerate in Mauritius that has interests in financial services, healthcare, trade & commerce, construction and tourism. Within the financial cluster, the Group operates banking, insurance, asset and wealth management, forex, Islamic finance, insurance brokerage, stock-broking and commodity and currency futures broking. The Group has an established presence of 40 years in Mauritius. It also has operations in South Africa, Madagascar, Kenya, Dubai, France and Malta. 

The Bank started operations in 1989 as the South East Asian Bank (SEAB). The banking entity was acquired by British American Investment in 2008, and became the Bramer Bank.

Following a merger with Mauritius Lending in 2008, the Bank also was involved in leasing and micro-financing services.  Interestingly, while the Bank published audited financials up to December 2013, its financials for 2014 were unaudited.

According to the Mauritian Financial Services Commission, an onsite audit from January 22, 2015 to February 20, 2015 discovered a number of deficiencies.  The Bank had subsequently sought to meet its capital needs through overnight lending facilities from the country's central bank, but had also reportedly been suffering large withdrawals.  While the Mauritian Prime Minister has publicly pegged the size of the alleged Ponzi scheme at approximately $693 million, further details as to the number of victims or potential ensuing losses remain unknown.  

 For more news and analysis of Ponzi schemes, visit Ponzitracker, a blog by Jordan Maglich, an attorney at Wiand Guerra King P.L.

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