Sitting of tuesday 6th july 2010

(No. 1B/264)

Mr E. Guimbeau (First Member for Curepipe & Midlands) asked the Minister of Housing and Lands whether, in regard to the State Lands, he will state if Article 18 of the Industrial Lease Agreement for the lease thereof has been amended and, if so, why and, if not, whether Government intends to amend it.

Reply: Initially Article 18 provided for an Industrial Site Lease to be automatically cancelled “de plein droit” in case of change in ownership or shareholding structure of a Company which may impact on the control of the Company.

While this provision served its purpose in discouraging developers from speculation over State lands, it has also acted as a hindrance for genuine promoters wishing to bring substantial Foreign Direct Investment (FDI) for implementation of projects.  In many cases injection of FDI from renowned companies would de facto necessitate a change in the shareholding structure and control of the beneficiary company.

In this context, it has been decided to amend Article 18 to provide for the Industrial Site lessees to seek approval for any change in ultimate beneficial ownership or any change in beneficial ownership or shareholding, that may impact on the control or management, at least 15 days before such change.

The application is then scrutinised by a Technical Committee comprising inter alia, representatives of the Prime Minister’s Office, of the Ministry of Finance and Economic Development and of my Ministry.

In addition, following representations made by various stakeholders, including Associations des Hôteliers et Restaurateurs – Ile Maurice (AHRIM), in March 2010, Government decided that proposals for cases of industrial site leases for which the

Projects have already been developed and have been operational for at least one year, will be allowed to change the shareholding structure in the normal course of business.

The above conditions are also included in letters of reservation and letters of intent, so that lessees do not have recourse to a change in shareholding structure prior to the signature of the Lease Agreement.