Retailer Courts Asia has found itself embroiled in a business deal gone awry in Mauritius.

The company was making a bid for Courts Mauritius, an unrelated offshoot of Courts, a British firm that spawned Courts Asia but has now closed.

Courts Asia said it was initially awarded preferred bidder status for the sale but was later told that another consortium had won the deal. The sale was initiated when the firm that owned Courts Mauritius was ordered to offload assets after a local banking scandal.

Courts Asia registered its interest in buying Courts Mauritius on May 19, less than a week after the invitation for expressions of interest opened.

Special administrators appointed by the Mauritian government said early last month that Courts Asia's bid was the most favourable. This was confirmed in a letter on July 31.

However, in a surprise statement last Tuesday, the Mauritian government announced that the preferred bidder was a consortium led by Mr David Isaacs, who had brought the Courts brand to Mauritius in 1985 and gone on to work for BAI, its eventual parent company in the country.

Courts Asia chief executive Terry O'Connor told The Straits Times in a phone interview yesterday: "Evidently, we were unfairly treated, and ousted at the 11th hour."

Mr O'Connor dismissed claims that Courts Asia was unwilling to retain existing Courts Mauritius staff or support the Mauritian furniture industry.

"I think David (Isaacs) said yesterday the suppliers have received no purchase orders (from Courts Asia), but how can you give orders for a company you don't own?" he said.

"There's a lot of smokescreen here, but if you cut to the chase, it looks like the process has been completely circumvented by the minister in charge."

The Mauritian government has also dismissed one of the special administrators, Mr Mushtaq Oosman, claiming he had no authority to hold exclusive discussions with representatives of Courts Asia over the sale.

"We are contemplating initiating legal actions, as we incurred substantial costs as preferred bidder," said Mr O'Connor, pointing to the security deposit as well as due diligence undertaken by his company.

"Perhaps we've dodged a bullet if Mauritius is like that and treats investors this way."

Courts Asia said it had contacted IE Singapore and other Singapore government agencies on Tuesday as the relevant Mauritian government ministers and officials, including those involved in the Courts Mauritius sale, are in town.

The Mauritian Honorary Consulate said the officials arrived on Wednesday and would be here for a week, but efforts by The Straits Times to contact the ministers have been unsuccessful.