The beginning
The Mauritius Commercial Bank’s history started on September 1, 1838 when Governor Sir William Nicolay proclaimed the establishment of La Banque Commerciale de l'îsle Maurice in Port Louis. The bank was an initiative by a group of traders of the capital, headed by Mr. James Blyth and Mr. William Hollier Griffiths, who wanted to establish an alternative to the Bank of Mauritius, which they felt favoured the planters on the island. The bank started business with an authorised capital of £100,000, around 500,000 piastres, in premises situated at rue de Paris, subsequently rue Desforges, now Sir Seewoosagur Street.
In 1839, Queen Victoria granted a Royal Charter to the newly established bank under the name of The Mauritius Commercial Bank (MCB). The British government renewed the charter every twenty years until 18 August 1955 when the Bank became a limited liability company.
The early years
MCB encountered numerous difficulties in its first hundred years. MCB opened its first branch in Curepipe, in the centre of the island, in 1920. It did not open another branch until after World War II.
Post-war growth
In 1949, Lloyds Bank became a shareholder. In 1955, MCB became a limited liability company. At this point MCB became the first bank to set up branches in rural locations: Mahébourg in 1955, Flacq in 1958, Triolet in 1959, and Goodlands in 1963. Other branches followed. In 1960, MCB bank moved to the current location of its headquarters at Sir William Newton Street (at the time, Rue de l'Eglise). Mauritius achieved its independence in 1968.
A regional leader
MCB began its international expansion in 1991 when it opened representative offices in Paris and Antananarivo, Madagascar. Together with Crédit Lyonnais (40%) and Banque de la Réunion (a subsidiary of Crédit Lyonnais-25%), MCB (35%) established Banque Internationale Des Mascareignes, an offshore unit based in Mauritius. (In 1998 Crédit Lyonnais confirmed the transfer to Caisse d'Épargne Provence-Alpes-Corse (CEPAC) of its remaining shares (25.5%) in Banque internationale des Mascareignes.) The next year, MCB became the majority shareholder of Banque Française Commerciale Océan Indien (BFCOI), which is registered in France, with the previous owner, Banque Indosuez, retaining an interest. BFCOI had branches in Réunion Island (9), Mayotte (4) and the Seychelles (1), and a head office in Paris. MCB also established Union Commercial Bank in Antananarivo. The original shareholders were MCB (70%), Standard Bank Investment Corporation Ltd (10%), BFCOI (10%), FIARO (5%) and Société Manofi (5%). By 2000, MCB's share ownership had risen to 79%. Currently, the bank has three branches. Then in 1992 MCB converted its representative office in Paris to a branch.
In 1999 MCB established União Comercial De Bancos (Moçambique) in Maputo, Mozambique
National Pensions Fund scandal
The National Pensions Fund scandal was a large-scale embezzlement scheme orchestrated by Robert Lesage, a senior manager at MCB, who was later found guilty of fraud and money laundering. The scheme was uncovered in February 2003 when Amina Rojoa, an NPF accountant, reported missing deposits to Prime Minister Sir Anerood Jugnauth. On 14 February 2003 (dubbed “Black Friday”) MCB publicly announced that over Rs 600 million had been fraudulently diverted between 1991 and 2002. Lesage was accused of tampering with client accounts and channeling funds through shell companies.
Investigations by the Independent Commission Against Corruption (ICAC) revealed that the principal beneficiary of the fraud was Teeren Appasamy, a London-based Mauritian businessman. Funds were traced to accounts connected to ten companies and several individuals, including Appasamy’s associates Dev Manraj and Donald Ha Yeung. Lesage implicated senior bank managers and was controversially granted immunity by ICAC. MCB’s General Manager Pierre-Guy Noël and Assistant General Manager Philippe Forget were both charged, but the charges were later struck out on technical grounds.
In a 2010 civil ruling, the Supreme Court of Mauritius found Lesage liable for Rs 880 million and ordered him to repay Rs 436 million, while Appasamy was ordered to repay Rs 305 million. Ha Yeung was cleared of wrongdoing. However, Lesage appealed to the Judicial Committee of the Privy Council in the United Kingdom, which in 2012 overturned the verdict due to judicial bias and ordered a retrial. Separately, MCB and its insurer, Mauritius Union Assurance (MUA), were embroiled in litigation with their reinsurers, who rejected coverage on grounds of misrepresentation. The UK Supreme Court ultimately dismissed the appeal brought by MCB and MUA.
In 2009, ICAC initiated a criminal case against MCB as a corporate entity, alleging that it had failed to implement effective controls to prevent money laundering. In 2017, MCB was found guilty and fined Rs 1.8 million. The scandal prompted widespread scrutiny of banking oversight and corporate governance in Mauritius. Attempts to extradite Appasamy from the UK were unsuccessful due to his British citizenship.
Group reorganization
Since its regional expansion, MCB operated as both a licensed bank and a holding company. In 2013, MCB embarked on a reorganization that sought to separate the banking and non-banking operations and raise capital in order to position itself for future growth. The restructure was as follows:[4] At the end of the reorganization, MCB remained a commercial bank with no subsidiaries while MCB Group's structure operated under three clusters, i.e.:[5]
- MCB Group Limited was incorporated to be the ultimate holding company in the group.
- Shareholders of MCB exchanged their MCB shares for MCB Group shares on a 1:1 ratio. These shares were then listed on the SEM.
- MCB Investment Holding Ltd (MCBIH) was then incorporated to act as the intermediary holding company of all the banking investments of the Group.
- MCB's entire stock was transferred from MCB Group to MCBIH in exchange for shares.
- The Banking subsidiaries held by MCB were then unbundled to MCBIH while non-banking subsidiaries and investments were unbundled MCB Group.
