PJ Increases Top Tax Rates By 5%

In his budget yesterday. Along with a negative income tax (para. 280) of up to a thousand rupees. These should mitigate the growth of the Sithanen Toohrooh and could help reduce inequality. Not a bad start but it won't be enough. The establishment of a National Investment Authority (para. 321) is a good idea to optimise returns of the NPF/NSF and other parastatals and to provide much-needed opportunities for local finance professionals to put their skill set to contribution. It might even improve pension fund governance.

The big negatives include the extension of 8-year contracts to foreign labour in more sectors of the economy (p38). You don't want to do this when the economy -- broken by Dr. Calamity -- is not creating any jobs. At least not before you have a good look at pay ratios and remember that there's so much of unemployment and underemployment here. I didn't see -- haven't really read the budget yet -- anything to freeze the growth of the pool of vehicles. Not too sure you want to give all these fiscal exemptions. For example, is the minuscule tax rate for exporting companies going to apply irrespective of their size? After the rubbish of 'competitive depreciation'? Does the CMT need that?

Hopefully there will be some big improvements in these plans before the Finance Act is passed. Like scrapping the Metro Express project. And a massive reduction of nonsense.

NMH Saga Enters New Phase

The Special Investigator submitted his conclusions to the FSC a few days ago without some parties telling their side of the story on the ground that the appointment of Mr. Taukoordass was inappropriate. Mainstream media has leaked that there could be multiple violations of securities laws involved. And that the report has been sent to the legal adviser of the regulator for advice.

Let's see what happens next.

Privy Council Orders New MCB/Lesage Trial

Before a differently constituted court. That's because it thinks that Lesage was denied a fair hearing. Have a look at the interesting judgement.

MK's Attitude is Grotesque

They want Rs300,000 from Awadh Balluck, a representative of our airline's small shareholders' association, to include his common sense motions on the agenda of the July 22 meeting. These motions include that the CEO's salary be brought to Rs1,000 per month until MK returns to profitability, a reduction in the number of board members to seven with one from the small shareholders' group, directors getting 2 free tickets per year only while serving the company, that a hedging specialist be hired and that a commission of inquiry be instituted to find out about the hedging scandal. These are very reasonable motions consistent with basic notions of corporate governance.

The funny thing is that a couple of years ago he didn't have to pay anything for similar motions. Hmm, what's exactly is going on here? Here's one way out of this. Get the NPF to pay the Rs300k for corporate governance's sake - a bit like what CalPers has been doing for ages. The Prime Minister, of course, has to share some responsibility in this given that he pulled the CEO out of his hat.

Scandale MCB/NPF: Leçons Pas Apprises

Il y a urgence à modifier la National Pensions Act et la National Savings Act pour une raison capitale. Ali Mansoor se retrouve au centre d’un conflit d’intérêt étant donné l’impact que peuvent avoir les mesures budgétaires sur les marchés financiers. Des mesures qu’il aurait suggérées probablement lui-même comme secrétaire financier. 

Par exemple, la baisse de la taxe corporative à 15% qui a été responsable de l’envolée de la bourse de Port-Louis était connue avant tout le monde de Mansoor qui porte aussi la casquette de président du comité d’investissement du NPF/NSF. Il ne peut pas créer les règles du jeu et être le joueur le plus important à la fois. Mansoor doit donc immédiatement se récuser du comité d’investissement.

Thanks George, But I Think We'll Pass

I am referring to what looked like an assurance given by the economist and MEXA boss this afternoon on a private radio about the apparent prudence with which the National Pension Fund (NPF) invests workers' money. He was up against Ashok Subron who knows infinitely more about how the economy of Mauritius works than Sithanen and his university buddy, Mansoor, lumped together.

Indeed, standard corporate governance practice suggest that the people of this country be provided with all the information and given the opportunity to make that determination by themselves. That should be relatively easy for the Financial Secretary, who chairs the investment committee of the NPF, to do: the cost of disseminating information is close to zero nowadays. 

Besides, there's a moral obligation for the government to rapidly become more transparent in this and some other areas given that the MCB-NPF scandal is still fresh in everyone's mind. There are also so many great models for pension fund governance. Click here and get ready to say Wow!