Senior members of Moreway Construction Company and the National Disaster Management Center (NDMC) have been implicated by employees of NDMC and the French Red Cross (FRC) for their alleged corrupt involvement in a 2005 Laamu Gan tsunami housing project.
“Moreway is a scapegoat for forgeries and fabrications committed by the Arif brothers Ahmed and Abdullah, and Mohamed ‘Dhigali’ Waheed,” alleged one member of the business community familiar with the individuals, who wishes to remain anonymous.
Dhigali is a former shareholder and current executive manager of Moreway Construction. Ahmed Arif owns Apollo Holdings Company, which has been linked to Moreway, while Abdullah Arif, formerly director of Moreway Arun Excello, today holds shares in Lotus Company.
The Anti-Corruption Commission (ACC) recently entered NDMC with police forensics experts to review files relating to a Rf18 million (US$1.16 million) payment issued to Moreway by the government in May. The ACC stopped a second payment of Rf15 million (US$973,000) in August on suspicion of corruption.
In 2005, the FRC tendered a US$7 million post-tsunami housing project for Laamu Gan, accepting bids from several companies, including Moreway, in a joint venture with Indian company Arun Excello and local company Aima. Although the project initially proposed 460 houses, complaints of insufficient conditions and finances prompted the FRC to reduce that number to 240.
NDMC Senior Project Manager Mohamed Waheed said Moreway’s complaints of insufficient financing and obstacles to construction prevented the company from fulfilling its contract, although at the time, claimed Waheed, imported materials were duty-free. A former employee of the French Red Cross, Adam, added that Red Cross site inspections and budget plans were nearly fool-proof. But “they were always demanding money from FRC, they had all kinds of excuses,” said Waheed.
Meanwhile, Arun Excello had abandoned the project mid-way due to frustrations with Moreway, incurring a loss of US$300,000.
Representatives at Arun Excello had not responded to inquiries at time of press.
After building 80 houses, Moreway’s contract was terminated by the FRC and the project handed over to Maldives Transport and Contracting Company (MTCC) under the government’s remit.
Moreway was subsequently sued by NDMC on behalf of the Maldivian government for losses incurred by the unfinished project. In November 2007, the Civil Court delivered a verdict requiring Moreway to pay US$2.3 million to the government and granting NDMC the right to sell Moreway property at their construction site if the money was not paid within one month.
Sources say the money, due four years ago, has not yet been paid.
“Misleading” letters
Although payments were released to Moreway this year by the Finance Ministry, Waheed claimed that the government has been misinformed.
On April 19, 2011, Deputy Minister of Housing and Environment Ahmed Zaki sent a letter to Finance Minister Ahmed Inaz stating that a sixth invoice submitted by Moreway in March 2007 had yet to be paid, and requested that the ministry release the funds.
In response, Inaz said budget constraints prevented the money being allocated to NDMC, “so, money is to be paid from the NDMC budget.”
Further letters obtained by Waheed illustrate government confusion around the issue. In what Waheed called “misleading letters” between the Finance Ministry and NDMC, NDMC personnel requested the government to pay expired contractor invoices for a project which it had not tendered. At Zaki’s suggestion, the Finance Ministry reallocated money for current housing projects in Dhuvaafaru and Vilufushi to facilitate these payments, which were made using the current dollar-rufiyaa exchange rate.
Although the first payment voucher, processed in May, required Mohamed Waheed’s authorisation, his name had been crossed out and replaced by Deputy Minister Adam Saaed’s, who authorised the voucher along with Zaki.
Asked why this had been done, Waheed speculated that “they thought I wouldn’t sign it, and since Saeed is a friend of Zaki’s they had him sign it. I don’t think he even knew about it, maybe he signed it without thinking much.”
Meanwhile, documents used to obtain these payments are in dubious standing. Waheed points out that only copies were submitted to the Finance Ministry. “Who will accept invoice copies these days? Not even a small child!”
FRC officials also pointed out that the invoices had long been considered invalid.
Emails exchanged between Waheed, FRC senior project manager Brett Campbell and FRC construction coordinator Xavier Chanraud confirmed that all legitimate invoices from Moreway had been paid in full by the time FRC closed its housing projects and left the Maldives.
Chanraud recently stated that, “The FRC has closed all of its housing projects in the Maldives years ago and has already paid 100 percent of its contracts value through NDMC, which includes all defect liability retentions to the contractors. I do not think those invoices are still eligible, especially if rejected four years ago by the NDMC for technical reasons.”
Campbell added that the Civil Court’s verdict against Moreway indicated that “not further payments were due to Moreway.”
In reference to requests for additional payments for access road construction, Campbell said those claims were “discussed at length” and “deemed to be a contractor’s cost.”
Then NDMC Chief Coordinator Abdulla Shahid allegedly rejected the invoices at the time on similar grounds.
“It is questionable how these invoices made headway into NDMC budget section [in 2011],” Waheed wrote in a statement. “These are not outstanding payments to Moreway as one would think and FRC does not recognise these invoices as pending.”
When the invoice for a second payment was authorised by Zaki and NDMC chief coordinator Sheikh Ilyas Hussain and submitted to the Finance Ministry, Inaz questioned its validity against Moreway’s pending debt to the government.
Zaki then took the invoice with comments from NDMC Finance Director Mohamed Shiyam’s desk and passed a new copy to someone else for processing, Waheed alleged. Copies of both invoices with clear discrepancies were shown to Minivan News in private interviews.
The Maldives’ current Red Cross affiliate office, the International Federation of Red Cross (IFRC), was unable to comment on the case.
A blind spot
Sources at NDMC and formerly the FRC agreed the previous regime’s corrupt reputation has left the current government with a blind spot.
“At the time, the government was too corrupt to get money for projects,” said Waheed. “So the FRC was funding the project, but after Moreway could not complete the project FRC left and the government stepped in.”
Government bias may have pervaded the project from the start, however. Moreway’s original bid was rejected over a fake bank guarantee, Waheed pointed out, and the company had to go to court to clear its name before re-submitting its bid.
“This is how things were done then, I don’t know why Moreway was selected but that was Gayoom’s regime,” he said.
Internal complications at the Red Cross were also rumored, although a source familiar with the operation could not confirm the reports.
For Adam, the central issue in the Moreway case is ignorance. “GoM does not understand the discrepancies in payments and procedures, and has not been properly informed of the project, so it is being charged for variations that were not approved by FRC,” he said.
According to Adam, the “local procedure” leaves project tendering and awarding to the Ministry and does not include consultants. It is “the only procedure Maldivians know,” and supports a “culture of embezzling state funds” whereby invoices are frequently submitted, rarely checked, and often paid.
FRC’s procedure is more meticulous and independent, Adam explained. Consultants are included in the bid review process, and officials at local and international FRC offices review projects alongside NDMC officials and consultants.
Had the government been more aware of FRC’s procedures, Adam said it would have noticed that the recently-paid invoice had not been signed by a consultant or passed through the review process at FRC.
The trickle-down effect
Distribution of the Rf18 million (US$110,000) is unclear. One source said it was obvious to anyone familiar with the business community that Dhigali “has profited personally, that he is a crooked businessman is known across the whole Maldives.”
A source familiar with the business community implicated Dhigali in a check fraud case involving companies Apollo and Lotus. The Arif brothers are currently shareholders in Lotus, and were allegedly issued a bad check by Apollo, in which Dhigali is a shareholder.
Other sources believe that anyone involved in processing the payments has also received a share.
The Arif brothers, said to have split associations with Dhigali earlier this year, were reportedly unaware that the payments were made. Ahmed Arif avoided scheduled interviews with Minivan News, and Dhigali did not respond to phone calls.
To date, Moreway’s debt of US$2.3 million has not been paid.
Breaking the Silence
“This is a big fraud and corruption case involving senior members at the government and at NDMC,” said Waheed, who said he suspects political tensions could make the ACC’s investigation difficult. “I’ve told Ilyas and Zaki not to do this. But Ilyas said he is helpless because he is not part of the ruling party. Zaki is MDP, though, and I think the two don’t want to have a conflict.”
While Waheed believes the ACC “is now more professional than before, and we should attach some faith to their investigation,” he chose not to report his findings to the commission.
Instead, he wrote to the President. “Because this involves so many government members I thought it was best to go to the government first, before reporting anything to an outside body. But when I spoke with them they were nervous, they didn’t want this thing to be talked about.”
Minister Inaz had not responded to phone calls at time of press, and Ilyas refused to speak to Minivan News. Deputy Minister Zaki denied all allegations.
ACC’s investigation of NDMC is currently underway.
Correciton: Previously, this article stated “Zaki then took the invoice with comments from Inaz’s desk and passed a new copy to someone else for processing.”
It should have read, “Zaki then took the invoice with comments from NDMC Finance Director Mohamed Shiyam’s desk and passed a new copy to someone else for processing.”
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Well researched and written article.
Wonder why most Maldivian journalists can't do this.
There is no need to get defensive here.
Zaki is a person from Shaviyani Atoll with questionable qualifications in Marketing and no justified standing to be appointed to the Housing Ministry.
The fact that he is a cheap crook has never been in doubt. However, this is how corruption starts. Presidents appoint persons based on recommendations provided by political affiliates. Those recommendations are based merely on their utility to the party's own political agenda.
I have personally known Zaki for some time and noticed his lack of scruples from the get-go.
Corruption is systematic and has more to do with cultural norms rather than a single leader. Nasheed is not personally responsible for all corrupt dealings within his government. However, he will be held responsible by the people as Presidents have to bear the ultimate responsibility for the appointments that they make.
Note: Zaki was appointed by President Nasheed and is NOT a remnant of the old regime.
very good article
Areef brothers are well known crooks in Maldives. They are specialised in forgery, contrabands, adulterating foodstuff and duplicating cigarettes.
The brothers are also specialised in bribing government officials. It is seems that these two are related tyrant Gay Yoom.
Dhigali is a crook businessman who shows to people that he is dedicated Muslim who prays five time to deceive the general public.
What can you expect from these cooks! After all their business is low since the downfall of the tyrant.
Thanks Eleanor for her well researched article. By reading this article one can understand the level of corruption in NDMC. This has been there since tsunami of 2004. It is said that some contractors sometimes submit the same invoice to NDMC to get several payments for the same work being done. Such people are quite rich today having several shops and big yellow-fin tuna dhoanis. NDMC had never been auditted before. The more the ACC investigates the more they would uncover. The payment of RF18 million or RF15 million is just one case in a series of corruption and frauds in NDMC.
"@d@m on Sun, 23rd Oct 2011 7:05 PM
Well researched and written article.
Wonder why most Maldivian journalists can’t do this."
They can Adam they can, but this is early days for Maldivian journalism- Maldivians will soon be using clever sophistry to promote cheap propaganda in the guise of "news".
Western journalists have to pretend to be fair and unbiased. Polarized Maldivian outlets preach to the choir they don't need to pretend.
A regular DhiTV viewer would switch to VTV if the usual monologue "special report" denigrating the president is not aired every single day during news.
Myself an MNBC viewer demands to hear every single quote of our magnificent president- because he is fantastic and can do no wrong.
Wonder why Minivan won't do any research on corruption cases of MDP cronies.
We all know who is involved in this case and which party he is affiliated to.
Why didn't ACC take police to investigate other corruption cases? Why didn't police act seize documents related to other cases even without ACC officials.
One more thing, when MDP cronies traffic more than 20,000 expatriates it is a "Discrepancy".
When MDP cronies are awarded millions of Dollars worth of project and subsidized with state resources there is no investigative journalism into the bidding process or checks even if a there was procedure.
What about all the money spent for the SAARC summit? Will minivan have the guts to investigate the so called best practices followed by MDP?
People say that there is a lot of corruption these days because of MDP but corruption is nothing new to Maldives as you can see from cases such as this.
The only difference is with the increasing coverage of internet and television as well as a huge portion of the population taking an active interest in politics with the new democratic system in place, many more are aware of the extent of corruption within the society as each party tries to sensationalize bad news about the other and take advantage of it.
Things are not perfect by any means but at least we now know there is corruption and we could try doing something about it, which wasn't the case at all in the past 30 years. Newspapers and tv channels never had even close to the amount of freedom they have now to talk about issues such as this.
No wonder all the crooks are unhappy with the progress the country has made and want to go back to the old system where these things would have been hidden from the public.
Apollo Holdings led by Aattey and Dhigali Waheed is so famous for their corruption and fraudulent activities in Maldives.Dhigali began his corruption in the State Electricity Company with Kamini Abdul Shakoor. In the aftermath of 2004 tsunami, Apollo used to get many contracts from the government like the construction of houses, waste management, supplying of water tanks, etc. To get these contracts they submit various proposals under different companies names like Moreway Construction, ABC Company, Islands and Atolls Company and so on. Apollo is also involved in many contraband businesses like the smuggling of illicit drugs into the country hidden with cement and sand bags on board cargo ships travelling between Male and Tuticorin, India.
well total fraud is approx 9m USD ... so research is zero !!!! ..
Very Funny ,
1-French any agency funds procedures with any Government.
2- Tender Board selected procedures of selecting ARUN ECELLO & MOWAY joint venture.
3-Who has morgage who"s property of 40 mln Mrf in this proposal & What has happen & when bank has released this morgage property.
4- The project likely handover during Gasim terms of office what is his responsible did his team has done dudelijence for local partner MOWAY.
5- Did any intelligence info collected. This nature of fund & project selecting has any political party connection with politically mortivated attitude.
6- Both ex- & present government has responsibility in this.
i wonder why minivan always clams on maumoon , but not anni
There is no truthful journalism , media always lie's and works for there benefit
this is not truthful at all
firstly,the FRC would never officially make the statement that any government previous or current was corrupt. they are far too diplomatic for that.
you cant fool everyone all the time
For a_Latheef, I hust want tell you that I have not seen anywhere in this article as FRC claiming the corruptness of either the previous or the present government. It is common knowledge that foreign donors were very hesitant to give cash money to Maumoon Abdul Gayyoom's government during the and even after the tsunami of 2004. Foreign organisations like FRC,BRC,CRC,GRC all handled their money directly by themselves and it was not given to the government.
We all want go to ''Aneh Dhivehi Raaje'' with His Excellency President Mohamed nasheed. It is the ultimate destiny for all of us, otherwise we are not going to survive in the 21st century like other nations on earth. We all have to support for change. We dont want an 89 year old selfish guy.
No wonder why some people are silent about this issue. It is an issue we have to deal with if we want get an overwhleming majoritity in year 2013 Presidential election.
I agree very much with ''herssss'' comment. If the MDP want suceed in 2013 election, there are certain issues to deal with. Among them are the fulfilling of MDPs 7 Promisses. The other pressing issues are to fight against corruption. At present there is a real concern for this, but actually, corruption and many other problems that we face today in our country are the results of the mismanagement of the former government. In general terms, there was widespread corruption in the former government. The most corrupted among them are Abdulla Yamin, Ilyas Ibrahim and Abdulla Hameed. The leader of all these corruption is Maumoon Abdul Gayyoom who saw corruption as the prime force to stay him in power for a long period. For him, eating public money is no problem as long as that person is not involved in politics which may thretened Gayyoom's authority as ruler of the country. This was the principle and secret behind Gayyoom's 30 year rule.
This is a very good article. I support this article. There are fantastic and fabulous comments for this article.
I know zaki and Ilyas personally. They are very stubborn and corrupt people. Only recently, Ilyas was transfered from the Immigration Department over the Border Control System corruption.
In the Peoples' Majlis Ilyas was as stubborn as a roaring lion who even jumped on the chambers bench in an attempt to obstruct Majlis' work. His main problem is, he think he is a very educated and able person person who can become a very popular politician one day as he is from a middle-class background in Male'. When MDP government came to power, Ilyas thought he would get a cabinet post as Minister of Islamic Affairs. He now have the ambition of becoming the Vice President of Maldives one day, once Dr Waheed becomes the President through Gaumee Iththihaad Party.
Zaki on the other hand is an islander who is not known among MDP members. At first, he was a lonly school teacher in the distant Sh.Atoll Komandoo. There, he always had all kinds of problems with the parents over issues such as the treatment of pupils differently ND OVER bitting problems. When political parties were formed in the country, Zaki took a wrong side when he supported Dr Hassan Saeed in the first round of 2008 Presidential election.
When MDP government came to power Zaki was quite lucky to get, through Sh. MP Hussain Waheed, the post of Deputy Mninster in the Norethern Province and was with Hunaif for sometime in Kulhuduffushi. There,soon after, he ran into conflict with State Minister Hunaif maily over bitting and girls. Later the friction was too high to bear for Hunaif, and he reported the problems to President Nasheed who sacked him from his post. Then Sh.MP Hussain Waheed intervened and persuaded the President to give Zaki the post but was transferred to Male' and stayed at the President's Office for a while, untill he was transferred to the Disaster Management Centre two years back.
I wonder why corrupt people like Ilyas and Zaki are still there in the office after all these corruptions. Now they should be sent to home straightaway. With these corrupt people, what are we going to do in 2013 Presidential Election?