Maputo — Mozambican President Joaquim Chissano arrives in Mauritius on Tuesday for a four day visit to this Indian Ocean island, during which he will be the guest of honour at the celebrations of the 35th anniversary of Mauritian independence. But Chissano's visit coincides with investigations by the Mauritian authorities into a massive bank fraud, in which one of those accused is prominent Mauritian businessman Tereem Appasamy, who is a business partner of Chissano's sons, Nyimpine and N'naite.

The case involves the fraudulent removal of 600 million rupees (about 20 million US dollars) from the National Pension Fund. The illegal transfers occurred at the Mauritius Commercial Bank (MCB) which was handling the Pension Fund. The Mauritian Supreme Court has frozen the assets of Appasamy, and of three of his associates, including retired MCB director Robert Lesage.

Appasamy, Nyimpine and N'naite Chissano, and their close friend Apolinario Pateguana, are among the shareholders of Belle Beach Holdings, which is the effective owner of the travel agency and car hire firm, Expresso Tours, which wins many contracts for Mozambican government business. Belle Beach has a variety of projects for hotels and other tourist undertakings in Mozambique.

Appasamy's name was mentioned in December during the Maputo trial of the men charged with the assassination of Mozambique's best-known journalist, Carlos Cardoso. One of the assassins, the Maputo money-lender Momade Assife Abdul Satar ("Nini"), told the court that in early 2000, at Nyimpine Chissano's request, he sent money to a London account of Appasamy. When asked about the Mauritian, Nyimpine described him as a friend and a business colleague.

The Mozambican ambassador to Mauritius, Hipolito Patricio, spoke to Mozambican reporters about the case, and said that the police have made several arrests. Asked whether a possible collapse of the MCB might have implications for Mozambique, Patricio declared there was no question of the MCB, the largest private bank in Mauritius going bankrupt. The people accused of the fraud were wealthy enough to replace the stolen money, he added. The main Mauritian investment in Mozambique is in the sugar industry: Mauritian concerns are the main shareholders in the Sena Company which has completely rebuilt the Marromeu sugar mill, on the south bank of the Zambezi. This factory had been destroyed in 1986 by apartheid-backed Renamo rebels during the war of destabilisation.

Currently it is easily the largest of Mozambique's four functioning sugar mills. It is producing about 120,000 tonnes of sugar a year, and the factory and surrounding cane plantations employ around 8,000 workers.

The Mauritian economy has been built largely on sugar and tourism, and the island's expertise in these areas explains the composition of Chissano's delegation. He is accompanied by the Ministers of Industry, Agriculture and Tourism, Helder Muteia, Carlos Morgado and Fernando Sumbana, as well as by the Minister in the Presidency for Parliamentary and Diplomatic Affairs, Francisco Madeira.