The Supreme Court has disqualified former ruling Maldivian Democratic Party (MDP) MP Mohamed Musthafa over a decreed debt which the court concluded makes him constitutionally ineligible to remain in the seat.
Monday’s ruling came following the case filed against Musthafa in July 2009 by opposition Progressive Party of Maldives (PPM) Vice President Umar Naseer, shortly after Musthafa won the election for Thimarafushi constituency against former President Maumoon Abdul Gayoom’s son, Gassan Maumoon.
Umar Naseer contended that Musthafa had not still this date repaid a loan of US$31,231.66 (Rf481,952) borrowed from the Bank of Credit and Commerce International (BCCI) according to the court order and therefore must be removed from Parliament for the violation of article 73(c)1.
According to the article 73(c) 1, “person shall be disqualified from election as, a member of the People’s Majlis, or a member of the People’s Majlis immediately becomes disqualified, if he: 1. has a decreed debt which is not being paid as provided in the judgement.”
The verdict came following a bench opinion which had an interesting split between the seven residing judges of the apex court, where four were in favour of removing Musthafa from the post as they deemed he was responsible for the decreed debt while the three remaining judges shared different views.
Two judges, including the Chief of Justice Ahmed Faiz concluded that it cannot be ruled Musthafa had a decreed debt as the loan had been taken on the name of Musthafa’s company Seafood and Trade International and added that in August 1997 the lower court had ordered the “company” to repay the loan.
Judge Muathasim Adnan meanwhile said that Musthafa and his company are two different legal entities and said the company’s decreed loan cannot be attributed to Musthfafa until a corporate veil is lifted.
Corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders.
Following the ruling, former Attorney General Husnu Suood tweeted that the Supreme Court’s decision is “wrong”. He shared the view of Judge Adnan: “I think the debt is not his, but his company’s which in technical terms a separate legal person.”
Meanwhile, speaking at the MDP rally tonight Musthafa had dismissed the ruling as “unjust and politically motivated”.
He also vowed for a comeback announcing that he will contest for the same seat in the next elections and win. “Only former President Mohamed Nasheed can defeat me,” he claimed.
Suood says that Musthafa can compete in the bi-election after discharging the debt.
However, Musthafa insists that he won’t repay the loan, citing deceptions from the food supplier General Meat Ltd.
Musthafa has also threatened legal action against the Maldives Monetary Authority (MMA) in November if it did not pay the US$500,000 that the Bank of Credit and Commerce International (BCCI) owed Seafood International.
Musthafa alleged that the sum was due to be paid to his company according to a 1991 London court ruling.
Citing MMA as the “live branch of BCCI in the Maldives,” Musthafa previously stated that “the debt of a dead person has to be paid by a living legal parent. If the MMA does not pay us within seven days we will sue the MMA in court and when we sue, we will ask the court to take the amount of money for the loss we have had for the past 20 years as a cause of not having this money.’’
The Supreme Court was due to rule on a case against Musthafa on October 20, 2010 however proceedings were interrupted when MDP called for a nation-wide protest against the judiciary during an emergency meeting.
Speaking to Minivan News at the time, MDP MP and spokesperson for the party’s Parliamentary Group, Mohamed Shifaz, said judges had been blackmailed and that the party would protest the politicised judiciary indefinitely.
Amid the government’s attempt to reform judiciary, when Criminal Court Chief Judge Abdulla Mohamed was arrested by military on January 16, the opposition subsequently took up the protest baton and demanded the release of the judge – whose arrest set in motion the series of events that culminated into the resignation of former President Mohamed Nasheed on Febrary 7 in what he called was a coup.