1984: INCORPORATION OF PROMOTION AND DEVELOPMENT

In the early 1980’s, the Mauritian Government gave some impetus to the economy by lowering the income tax rate and encouraging export industries. Companies in the Export Processing Zone (EPZ) were in full flight, creating employment and increasing turnover and profits. The management of the Mauritius Commercial Bank (MCB) saw then an opportunity to participate in the upside of a Mauritian economy coming out of a prolonged period of underperformance. The MCB had at that time two banking licences, the second being held by the MCB Finance Corporation (MCBFC), which was a 90+% owned subsidiary of the MCB, handling medium and long-term loans. Promotion and Development (PAD) was incorporated on the 23rd August 1984 with a share capital of MRs7 million as a subsidiary of the MCBFC. A small portfolio of shares in some of the country’s leading companies was sold by the MCB to PAD, and shares in PAD were offered to the MCBFC’s minority shareholders at the par value of MRs5. By this action, the MCBFC effectively reduced its stake in PAD to less than 50%.