PM’s private company totally unethical: Labour

  • 9th May 2003
  • 2003
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The setting up of a private company by the Prime Minister and several of his senior ministers is highly unethical and a very dangerous precedent, says Labour.

“The company has the potential to become a vehicle for corrupt deals, extortion and money laundering,” Labour Leader Mahendra Chaudhry warned.

The Prime Minister claims that the company, Duavata Initiative Ltd, will not be a trading company, that its directors will not profit personally and that the company was to be an arm of the SDL Party.

These claims are not borne out by a scrutiny of the Articles of Association of the DIL.

One of the objects of the company, for example, is to erect, construct, install, enlarge, alter, manage, work and maintain shops, stores, offices, residential premises and other buildings etc.

Of particular concern is Article 22. It allows the DIL “to be registered, incorporated or recognised in any part of the world and there to carry on business and to do all things necessary to give the company, or any branch or office thereof or any company subsidiary thereto a legal domicile in any country”.

“This particular Article clearly paves the way for such illicit activities as money laundering ,” Mr. Chaudhry said.

The Labour Leader has also expressed serious concern at Article 20 which allows the DIL “to enter into any arrangements with any government or authority, or municipality, and to obtain any rights, privileges and concessions which the company may think it desirable to obtain….”

“This is a very dangerous clause. It talks about negotiating with government, municipalities for concessions and other privileges for DIL,” Mr. Chaudhry said.

“This clause, in itself, clearly makes it unlawful for Cabinet Ministers to engage in the directorship of this company,” he said.

The Prime Minister says that ministers who are directors of the company will not be paid or benefit personally. This is not correct because the Articles clearly specify that directors will be paid for services they render the company. And secondly, the company has very restricted membership – contrary to the Prime Minister’s claim that anyone can become a member of the company.

The DIL has been set up in direct breach of both the ministerial and parliamentary codes of conduct and ethics. Ministers must not enter into any transactions whereby their private pecuniary interests might, even conceivably, come into conflict with their public duties.

“I am astounded that the Registrar of Companies allowed such an unlawful company to be registered. I am equally astounded that the Attorney General, who should be the guardian of law in this country, has condoned this.

“Likewise, I am flabbergasted that the very senior law firm of Munro Leys acted as lawyers in this unlawful enterprise,” Mr. Chaudhry said.

He has called on the Ministers concerned to either resign from the company or to resign from their ministerial positions.

“They cannot blatantly flout the ministerial code of conduct with such unlawful engagements,” he said.