STO withdraws US$1.2 million case against DQP MP Riyaz Rasheed’s Meridian Services

The government-owned State Trading Organisation (STO) yesterday withdrew a case worth more than a million US dollars lodged against Dhivehi Qaumee Party (DQP) MP Riyaz Rasheed’s Meridian Services Private limited.

The case concerned an unpaid sum of money worth Rf 19,333,671.20 (US$1,253,804.88), regarding Meridian’s use of the STO’s credit facilities.

Civil Court Judge Abdulla Jameel Moosa ruled that the case was dismissed, in response to a letter sent by the STO requesting the case be withdrawn.

Judge Moosa in his verdict stated that the court had received a letter from the STO requesting the court withdraw the case.

The letter noted that there were decisions to be made by the STO’s board of directors, and that after the “change in government”, the board did not have a sufficient number of members left to meet quorum and hold a board meeting. Therefore, the board was unable to make the required decisions, the organisation stated.

The sum of money the STO sought from Meridian Services included a sum of Rf 18,949,473.20 (US$ 1,228,889.31) for the use of STO credit facilities in payment for fuel oil, and a sum of Rf 384,198 (US$ 24,915.56) as a fine for the failure to make the payments on the date agreed in the contract made between the companies.

Initially, STO and Meridian Services made an oil trade agreement on 31 March 2010, which gave Meridian Services a credit facility worth 20 million rufiyaa (US$ 1,297,016.86) for purchasing oil from STO, and that payments had to be made within a period of 40 days.

However, in August 2010, STO lowered its credit limit from Rf20 million to Rf10 million (US$648,508.43) and shortened the payment period from 40 to 30 days.

Meridian Services sued the STO for breach of contract claiming that STO had brought in the changes to the credit facilities without giving the required notice of one month, in the event that the STO decided to change the credit facility with regard to a policy change.

However, Meridian Services lost the case after Civil Court Judge Abdulla Jameel Moosa ruled in favor of STO, stating that the STO had not breached the contractual terms agreed between the parties and that the documents the STO had submitted to the court was evident that it had brought the changes in proper compliance with the agreement.

Speaking to Minivan News, former legal director of President’s Office and lawyer Hisaan Hussain questioned whether such a big case could be withdrawn without even a board resolution.

“We are not speaking of an ordinary company. This is a public company and its making such a decision without a board resolution is a huge concern,” she said.

“STO has public share holders; they have to be answerable to the share holders,” she said.

The STO is a major supplier of general goods and pharmaceuticals to the Maldives, as well as fuel. It also supplies aviation fuel to Ibrahim Nasir International Airport (INIA).

“Political Motive”

MP Riyaz Rasheed was a very vocal critic of Nasheed during his tenure as president. He at the time alleged that Nasheed’s government had attempted to ruin his business, and when the STO had initially reduced the credit facilities in August 2010, his business suffered significant losses and forced him to fire several employees.

Riyaz was not responding to calls at time of press.

With regard to the case, Maldivian Democratic Party (MDP) Spokesperson MP Imthiyaz Fahmy alleged that the decision to drop the case was politically motivated and that the STO’s making such a decision without a board resolution was part of an ongoing campaign to “cleanse” political figures affiliated to the current “coup regime”.

“They are now cleansing all the corrupt politicians who were involved in bringing about the coup on February 7. They started doing this from day one. At first it was MP Ahmed Nazim [Deputy Speaker of Parliament], then MP Ahmed ‘Redwave’ Saleem and now it is MP Riyaz,” Fahmy said.

In late February the Criminal Court dismissed four cases of fraud against Nazim – an MP of the People’s Alliance formerly headed by Gayoom’s half brother, Abdulla Yameen – stating that his “acts were not enough to criminalise him”.

All four cases against Nazim concerned public procurement tenders of the former Atolls Ministry secured through fraudulent documents and paper companies, and included setting up several paper companies to win a bid worth US$110,000 to provide 15,000 national flags for the atolls ministry in 2003, and a similar tender worth US$92,412 to provide 15,000 national flags in 2005. A third count – conspiracy to defraud the ministry in 2003 in a similar manner to win a public tender for procuring US$115,758 worth of mosque sound systems – was also dismissed.

On February 28 the Criminal Court ruled that MP ‘Red Wave’ Ahmed Saleem – a member of Gayoom’s Progressive Party of the Maldives (PPM) – was not guilty in a corruption case filed by the state, accusing him of paying Neyza Enterprises Private Limited 50 percent of the money given to the former atolls ministry to buy sound systems for mosques in the islands.

Nasheed’s Maldivian Democratic Party (MDP) has alleged that key parts of the judiciary were in the hands of the supporters of former President Gayoom, “and now we are seeing the truth of that claim,” said the party’s spokesperson Hamid Abdul Ghafoor, following Saleem’s case.

“Dr Waheed’s regime is using the courts to settle old scores, to reduce MDP’s parliamentary majority and to wipe the slate clean for government supporters,” he claimed.

Fahmy today alleged that the courts were now “turning down cases against these people, even when the cases have been submitted by an independent auditor general.

“This is clear infringement of free and fair justice system. Now Riyaz is released from owing millions of rufiyaa to a public company, with public shareholders,” Fahmy said.

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