Allegations deepen against former top officials as new government audits years of economic management under Pravind Jugnauth’s leadership.
A court in Mauritius on Monday granted bail to former finance minister Renganaden Padayachy, less than a week after he was charged with embezzlement in connection to the alleged misappropriation of $6.7 million from a COVID-19 relief fund.
Padayachy, who served under the administration of former Prime Minister Pravind Jugnauth, was charged alongside Harvesh Seegolam, the former governor of the Bank of Mauritius. Both men are accused of diverting funds from the Mauritius Investment Corporation (MIC), a state-backed entity established in 2020 to support struggling businesses during the pandemic.
The high-profile case marks a significant development in the country’s ongoing anti-corruption efforts following a dramatic change in government last November. Both Padayachy and Seegolam deny any wrongdoing.
Bail Granted Without Objection
Seegolam was released on bail shortly after being charged last week. On Monday, the Port Louis court ruled in favor of Padayachy’s bail application. The country’s anti-corruption agency, the Financial Crimes Commission (FCC), did not oppose the request.
Under the bail conditions, Padayachy must surrender his passport, report to authorities regularly, and avoid contact with any witnesses or co-defendants involved in the case. No trial date has yet been announced, but the investigation is ongoing.
The case has stirred public interest and reignited debate over financial governance in Mauritius, a country long considered one of Africa’s more stable economies.
A Pandemic Relief Fund Under Scrutiny
At the center of the charges is the Mauritius Investment Corporation, created as a subsidiary of the Bank of Mauritius during the height of the COVID-19 crisis. With an initial capital injection of billions of rupees, the MIC was intended to stabilize the economy by injecting emergency capital into key industries and companies at risk of collapse due to the pandemic.
Critics have questioned the transparency of the MIC’s operations for years. While the fund’s mission was publicly lauded at the time, opposition politicians and civil society organizations have frequently raised concerns over its governance, accountability, and susceptibility to misuse.
The current charges against Padayachy and Seegolam allege that significant sums were misappropriated from the fund for personal or political gain—charges both men vigorously deny. Their lawyers argue the accusations are politically motivated and not grounded in evidence.
Political Tensions and Allegations of Financial Mismanagement
The arrests come amid a broader political reckoning in Mauritius. Prime Minister Navin Ramgoolam, who returned to power after his Labour Party-led coalition’s sweeping victory in the November 2024 general elections, has launched an audit of the country’s public finances.
In a series of public statements, Ramgoolam’s government has accused the former Jugnauth administration of falsifying economic statistics, misrepresenting budget figures, and concealing the true extent of the national debt.
“There has been a systematic effort to hide the real financial situation of the country,” Ramgoolam said shortly after taking office. “We are committed to full transparency and accountability, and that begins with an audit of where our public money has gone.”
Ramgoolam’s administration has also promised a broader crackdown on corruption and economic mismanagement, including investigations into several high-level contracts and government tenders awarded under the previous government.
Former PM Jugnauth Also Facing Charges
The case against Padayachy and Seegolam follows another major political shock earlier this year when former Prime Minister Pravind Jugnauth himself was arrested in February on charges related to money laundering. He was released on bail after several days in custody.
Jugnauth served as prime minister from 2017 until November 2024, when his Militant Socialist Movement (MSM) suffered a significant electoral defeat. He has denied all allegations and claims he is the target of political retribution.
The former leader’s supporters argue that the charges against him and other former officials are part of a campaign by the Ramgoolam administration to discredit the opposition and consolidate power.
However, many Mauritians have welcomed the investigations, viewing them as long-overdue steps toward cleaning up government institutions and restoring confidence in public financial management.
Broader Implications for Governance and Investment
The unfolding legal drama comes at a sensitive time for Mauritius, which is seeking to bolster its reputation as a well-regulated financial hub in the Indian Ocean. Long viewed as a stable, business-friendly destination, the island nation has come under increased scrutiny from international watchdogs over issues including tax transparency, anti-money laundering compliance, and financial governance.
The current investigations could either reinforce or damage the country’s credibility, depending on how they are handled.
“Maintaining investor confidence requires not just stability but integrity,” said Devina Naiken, a political analyst based in Port Louis. “The government must ensure that these investigations are thorough, fair, and transparent, and that due process is respected throughout.”
There are also concerns about potential economic fallout if the cases drag on or expose wider financial irregularities. The MIC, though under investigation, remains a key player in the country’s economic recovery efforts, and any further erosion of public trust could have consequences for private sector engagement and international lending.
Next Steps in a Growing Legal Saga
As the FCC continues its investigation, more charges or arrests could follow. The commission has indicated that it is examining other transactions related to the MIC and other public institutions. Several former senior civil servants have reportedly been summoned for questioning in recent weeks.
Meanwhile, Padayachy and Seegolam are expected to appear in court again later this year as prosecutors build their case. Both men maintain their innocence and have pledged to cooperate with authorities.
The coming months will be crucial in determining not only the fate of those accused but also the trajectory of Mauritius’s public institutions and political landscape.
For now, the nation watches closely as the courts take on some of the most consequential corruption cases in its post-independence history—cases that could reshape public trust in both governance and justice for years to come.
