This is an issue of particular concern for the Indian authorities, as a double tax treaty between the two countries makes it possible for overseas firms to route funds via Mauritius into the Indian markets and attempt to manipulate share prices.

However Mr Khushiram, who is currently visiting India in order to attract potential investors there, assured reporters that measures had now been put in place to block this and other abuses of the Mauritian financial sector.

'There have been gaps in our regulations due to lack of knowledge,' he admitted, 'But now a strict regime has been put in place to avoid recurrence of such misuse in future.'

The Mauritian Economic Development Minister revealed that since the recent enactment of the Money Laundering Act, several suspicious transactions and organisations had come under investigation.

He told journalists that his government had also set up two new agencies- the Financial Services Commission and the Financial Services Promotion Agency- to work with the Mauritius Board of Investment in attracting new investment to the country.