Money Laundering: FCC Arrests Li Hai, Developer of Yihai Pailles Smart City

On December 3, the Financial Crime Commission (FCC) arrested 67-year-old Chinese businessman Li Hai, who resides in Domaine Les Pailles. He faces a provisional charge of money laundering as part of an investigation into a significant transfer of funds.

Investigators have evidence indicating that Li Hai, as the sole director of Yihai International Investment Management (YIIM) Ltd, ordered the transfer of RMB 43 million (approximately Rs 280 million) from the company's bank account in Port Louis to his personal account in Hong Kong in November 2014. These funds are suspected of being linked to criminal activities. Li Hai appeared in court on Wednesday and was released after providing a debt acknowledgment of Rs 2 million along with a bail of Rs 600,000. The FCC's investigation is ongoing.

The developer is behind the Pailles Smart City project, an initiative aimed at transforming 110 acres of Domaine Les Pailles. This project originated from a joint venture between the State Investment Corporation (SIC), which operates under the Ministry of Finance, and Yihai International Investment.

Following an international tender in 2012, supervised by KPMG, which was appointed as Transaction Manager by SIC, Li Hai proposed to purchase 78 acres of the domain for Rs 486 million, plus Rs 55 million for an additional 18 acres discovered during the surveying process.

After the 2014 general elections, SIC was invited to hold a 30% stake in the project. In March 2016, Li Hai was questioned by the Independent Commission Against Corruption regarding the public-private partnership related to the Pailles Smart City.

The FCC is examining whether certain financial flows related to this enterprise may be connected to illegal activities.