Nexbis sues Shahid, while reappointed former controller decides to continue Nexbis agreement

Department of Immigration and Emigration has decided to proceed with the stalled border control system contracted to Malaysia’s Nexbis Limited. Meanwhile, Nexbis has filed a lawsuit at the Civil Court seeking Rf 669 million (US$43 million) in damages from the former Immigration Controller Abdulla Shahid.

The first hearing of the case, scheduled for Wednesday, was cancelled.

According to the lawsuit, Nexbis alleged Shahid refused to proceed with the project despite court approval and spread false information regarding the agreement to the media, tarnishing Nexbis’ global reputation.

Nexbis claims that misleading media coverage adversely affected its global operations – the company suffered a drop in share prices when the Maldives Anti-Corruption Commission (ACC) raised concerns of corruption, costing Nexbix AUD$39.9 million (Rf669 million).

Nexbis has now requested the court to recover the damages and the cost of its lawsuit from Shahid.

Speaking to Minivan News, Shahid refused to be held personally accountable to any decisions of the Immigration Department.

“I don’t have to take personal responsibility. When I was at Immigration I did hear about the case and had requested it to be forwarded to the Attorney General’s Office,” Shahid observed.

The 20-year Build, Operate and Transfer (BOT) agreement to upgrade the Maldives’ border control security system, valuing US$39 million (Rf600 million), was signed with Nexbis by Shahid’s predecessor, Ilyas Hussain Ibrahim – who was reappointed to the post last week by President Dr. Mohamed Waheed Hassan Manik, following the ousting of former president Mohamed Nasheed on February 7.

The day after the concessionaire contract was signed, ACC announced it had received “a serious complaint” regarding “technical details” of the bid, and issued an injunction pending an investigation into the agreement citing “instances and opportunities” where corruption may have occurred.

Nexbis shares immediately plunged 6.3 percent on the back of the ACC’s announcement. The company subsequently issued a statement claiming that speculation over corruption was “politically motivated” and had “wrought irreparable damage to Nexbis’ reputation and brand name.”

“Nexbis’ shareholders own and manage multi-trillion dollar assets globally and will not jeopardise their reputation for an investment return,” the company said at the time.

Claiming financial loss Nexbis subsequently threatened legal action over the stalled border agreement, prompting the cabinet to resume the project after reviewing the existing agreement with Nexbis to address the concerns raised by the department.

In December 2011, the ACC forwarded a corruption case against Ilyas Hussain Ibrahim, then head of the Center for Disaster Management, and Director General of the Finance Ministry Saamee Ageel to the Prosecutor General’s Office (PG). The ACC claimed the pair had abused their authority for undue financial gain in the Nexbis deal.

Meanwhile, the ACC requested the project be re-tendered with the consent of the cabinet. However, the cabinet decided to continue the project with Nexbis after revising the agreement.

ACC attempted gain a legal injunction against the move, but failed as the civil court ruled in January 2012 that ACC cannot order to terminate the Nexbis agreement.

Speaking to Minivan News today Immigration Controller Ibrahim confirmed that the department will continue the border control project as there is no “legal obstruction”.

“I have decided to continue all the works including the border control system project, as there is no legal obstruction,” Ilyas observed.

Ilyas had steadily disputed the claims of corruption and insisted that the project was awarded to Nexbis through a transparent international bidding process.

However, in earlier interviews with Minivan News, Shahid expressed concern over both the cost and necessity of the project, calculating that as tourist arrivals continue to grow Nexbis would earn US$200 million in revenue over the project’s 20-year lifespan.

Comparing Nexbis’ earnings to the government’s estimated revenue of US$10 million, Shahid suggested the government instead maximize its income by operating a system given by a donor country.

“Border control is not something we are unable to comprehend – it is a normal thing all over the world,” Shahid told Minivan News at the time. “There is no stated cost of the equipment Nexbis is installing – we don’t know how much it is costing to install, only how much we have to pay. We need to get everything out in the open.”