Quantum Global Group today announced it has applied for a judicial review into what it called the unsubstantiated and illegal decisions of the Mauritius authorities to suspend its business licenses.
The Mauritius Court issued a series of restriction orders against Quantum Global last month on the basis of an affidavit by the Financial Intelligence Unit (FIU) that is still being withheld from the group despite repeated attempts over the past month to receive it.
The Mauritius Court issued a series of restriction orders against Quantum Global last month on the basis of an affidavit by the Financial Intelligence Unit (FIU) that is still being withheld from the group despite repeated attempts over the past month to receive it.
The FIU obtained the restriction orders on the basis of statements it is unable to substantiate, Quantum Global states in the application for a judicial review. Moreover, the decision of the Financial Services Commission (FSC) to suspend its licenses was illegal, in breach of basic human rights and natural justice, and in breach of the Constitution of Mauritius, the group argues.
In a legal opinion, Lord MacDonald of River Glaven Kt QC, the former Director of Public Prosecutions of England and Wales, said: “The failure of the Mauritian authorities to provide even a gist of their case for the restriction orders is, in our view, a clear and significant breach of due process and fair trial rights.”
The FIU and FSC have allowed themselves to be drawn into a contractual dispute between Quantum Global and its client, the Angolan sovereign wealth fund known as Fundo Soberano de Angola (FSDEA), Quantum Global states.
Quantum Global manages $3 billion in seven private equity investment funds based in Mauritius under limited partnership agreements with the FSDEA. Following a change in administration, the FSDEA in early 2018 tried to terminate the limited partnerships, in breach of the agreements which guarantee a long-term commitment for investments in agriculture, infrastructure, hotels, healthcare, mining and timber.
When its first attempt failed, it appears the Angolan government persuaded the Mauritius authorities to start the court proceedings against Quantum Global. The FSDEA has also started legal proceedings against Quantum Global in the UK High Court, which granted a worldwide freezing order against the group. Furthermore, the FSC last month opened an investigation into Quantum Global, which the group believes to be a “fishing expedition” to try to justify its regulatory actions after the fact.
Lord MacDonald said: “In so far as a serious sanction has already been applied, that raises real concerns that the outcome of the investigation has been pre-judged, and that the sanction has been imposed unfairly.”
Arbitration proceedings are afoot in relation to the dispute with the FSDEA subsidiaries in Mauritius.
By wading into a contractual dispute, the Mauritius authorities have jeopardized the reputation of Mauritius as a financial center, Quantum Global says in the application, noting that arbitrary action and forced expropriations invariably undermine confidence in a jurisdiction as a whole. The group also reserves the right to seek redress for the damage and losses caused by the actions of the FSC and FIU.
Quantum Global asks the court to order the reversal of the FSC decisions and seeks a declaration that these decisions are illegal.
It should be noted that while the affidavit underlying the restriction orders has not been disclosed, several false and damaging allegations have been supplied to and published by the Mauritius media. Quantum Global believes that the leak of defamatory and unsubstantiated allegations is also wrong and against the principle of natural justice.
Quantum Global has strongly denied the false allegations reported by numerous media outlets in Mauritius and reiterated that all monies of the FSDEA are in place and accounted for. Quantum Global Group conducts its activities in accordance with approved investment policies and the applicable laws in Mauritius and worldwide. The seven investment funds based in Mauritius comply with strict IFRS reporting standards.
Quantum Global had also applied to the Mauritius courts to release funds from its frozen bank accounts for salaries and other essential operational expenses, which is a routine procedure allowed in such cases. However, the FIU has objected to the application. This decision is causing significant further financial damage to Quantum Global and the limited partnerships it manages. It also harms employees who are waiting to be paid.
Quantum Global’s Swiss shareholders have also informed the Mauritius government that they intend to apply for international arbitration under a bilateral investment treaty between Switzerland and Mauritius if the dispute is not resolved within six months.
Quantum Global will keep fighting what can only been seen as arbitrary FIU and FSC actions at this stage. More than a month after they have had their bank accounts frozen, the Mauritian authorities still refuse to account for their actions.
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