Villa

Tourism ministry moves to freeze Villa accounts

The tourism ministry has ordered the tax authority to freeze the accounts of companies with pending bills, including that of the opposition Jumhooree Party leader Gasim Ibrahim’s Villa group.

The government is seeking US$90.4million allegedly owed as unpaid, rent, fines and interest on several properties from Villa group. The conglomerate – which operates businesses in shipping, import and export, retail, tourism, fishing, media, communications, transport, and education – says the notice is unlawful and is contesting it at the civil court.

The notice for payment expired on April 18, but the Maldives Inland Revenue Authority (MIRA) did not freeze the company’s accounts saying the move may negatively affect the Maldivian economy, local media have said.

Deputy tourism minister Hussain Liraar told Minivan News: “We did not mention a specific business or company. But the ministry sent a letter to the tax authority asking to freeze the accounts that owe money to the state.”

MIRA has declined to comment on the issue saying: “It’s not our policy to give out information regarding specific tax payers.”

Meanwhile, Tourism minister Ahmed Adeeb today told Haveeru: “The government must recover any money owed to the state. This is public money. We cannot let it slide for certain individuals.”

According to Haveeru, the tourism ministry’s order to freeze accounts came in response to a letter from MIRA, in which the tax authority said freezing Villa’s accounts could have adverse impacts on the economy. In response, the tourism ministry ordered MIRA to freeze the accounts of all companies with pending bills.

Some 20 companies, including Villa Shipping and Trading Pvt Ltd, now face an accounts freeze.

“Fabricated”

MIRA issued the US$90 million notice after the tourism ministry terminated agreements for several properties leased to Villa and subsidiary companies for resort development. The move followed Gasim’s JP forming an alliance with the main opposition Maldivian Democratic Party (MDP). However, the government denies the opposition’s accusations of unfairly targeting Gasim’s business interests.

Some 27 cases challenging the termination of the agreements and MIRA’s notice as well as appeals of the civil court’s refusal to grant stay orders are ongoing at court.

While the tourism ministry cited lack of “good faith” as the reason, the Villa officials insisted the terminations were unlawful and that the fines were “fabricated”.

Villa – which won the tax authority’s “Ran Laari” award last year as one of five companies that paid the highest amount to the state – insists it does not owe any money to the state.

But the civil court last month refused to issue stay orders until the conclusion of the dispute, saying the state could reimburse and compensate the company if the ongoing cases are decided in Villa’s favour.

Since the notice was issued, Gasim has not been seen in opposition protests or made any comments on a deepening political crisis triggered by the arrest of opposition politicians. JP’s deputy leader Ameen Ibrahim was also arrested last week after clashes between protesters and police following a 20,000 strong antigovernment march. 

Settlement agreements 

The properties at stake were leased under a settlement agreement signed with the tourism ministry on December 12, 2013, less than a month after president Abdulla Yameen took office.

The settlement agreement was reached after the Supreme Court on November 19 ordered the state to pay US$9.7 million to Villa in one month as compensation for damages incurred in a project to develop a city hotel in Laamu Kahdhoo.

As part of the settlement, Villa withdrew cases involving a dispute over a city hotel in Haa Dhaal Hanimadhoo and resort development on Gaaf Dhaal Gazeera. In return, the government signed five ‘amended and restated lease agreements’ with Villa for three islands and several Kaafu atoll lagoons.

The government also agreed to forgo rents for the islands and lagoons for a construction period of five years and seven years, respectively.

However, after the settlement agreement was terminated in February, MIRA’s notice stated that Villa owed US$75.5 million as fines, US$600,000 as interest, and US$14.8 million as unpaid rent dating back to original lease agreements signed in 2006 and 2007.

The Villa officials noted that the company has paid over US$15 million as advance payments for the properties.

In the case of Kahdhoo, MIRA claimed an unpaid rent of US$293,000 and a fine of US$10 million – 34 times the allegedly unpaid rent – despite the 2013 Supreme Court judgment declaring Villa does not owe rent for the property, the officials said.

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2 thoughts on “Tourism ministry moves to freeze Villa accounts”

  1. Qasim is no knight in white shining armour. I recall the way he extended the lease of Maamigili Airport without the approval of President's office. I'm not saying several judges are in his pockets but I'm not discounting the possibility either. If you ask him he will probably tell you that how conglomerates are run. Good luck. Mr. Qasim

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