The State Trading Organisation (STO) has denied local media reports that Chairman Farooq Umar used the government company’s corporate credit card for personal use.
A press statement released yesterday explains that corporate credit cards were issued to senior executives after approval by the board of directors “to cover necessary expenses.”
“Although corporate credit cards were made for STO’s necessary expenses, the credit card policy approved by the board of directors allows personal use in cases of emergency or necessity,” it reads, adding that in such cases the policy was for executives to reimburse the company at the end of the month.
The State Trading Organisation (STO) yesterday hiked the prices of diesel to Rf13.50 per litre and petrol to Rf13.53 per litre, an increase of 89 laari and 86 laari respectively.
Yesterday’s changes marked the third time prices have been increased this month. On March 15, STO hiked the price of a litre of diesel to Rf12.61 and a litre of petrol to Rf12.67.
A press statement from STO explains that the revised prices reflect the change in cost of the new oil shipment.
GMR Male’ International Airport Limited (GMIAL) has announced that the Maldives State Trading Organization (STO) will begin supplying fuel to its operations from the beginning of April under the terms of a one-year contract.
The company has claimed that STO beat off competition from a host of international bidders to win the contract that will commence from 1 April 2011. The contract is expected to amount to a total value of US$140m over its twelve month lifespan – reflecting the supply of about 1.1 million barrels of fuel.
GMIAL said in a statement that the success of STO’s bid was based on both technical and economic factors such as the capability to supply both Jet A-1 fuel and Marine Gas Oil (MGO) as well providing testing facilities and the lowest financial premiums.
Andrew Harrison, CEO of GMIAL, said the decision was a key step in working to try and set the airport up as a world class facility and reduce any interruptions to transport services, while also offering direct economic benefits to the local economy.
“This contract will bring commercial revenue in form of US Dollar receipts to a Maldivian company, which will be a valuable benefit in terms of foreign exchange trading,” he stated.
Singaporean police are reportedly investigating former President Maumoon Abdul Gayoom’s half brother Abdulla Yameen for alleged involvement in an international money laundering racket thought to be worth up to US$800 million – if accurate, a staggering 80 percent of the Maldives’ annual GDP.
Yameen is an MP and leader of the People’s Alliance (PA) party, which in coalition with the opposition Dhivehi Rayyithunge Party (DRP), of which Gayoom is the ‘honorary leader’, together maintain a parliamentary majority in the Maldives.
The allegation is central to an explosive piece in India’s The Week magazine by Sumon K Chakrabarti, Chief National Correspondent of CNN-IBN, who describes Yameen as “the kingpin” of a scheme to buy subsidised oil through the State Trading Organisation’s branch in Singapore and sell it on through an entity called ‘Mocom Trading’ to the Burmese military junta, at a black market premium.
“The Maldives receives subsidised oil from OPEC nations, thanks to its 100 percent Sunni Muslim population. The Gayooms bought oil, saying it was for the Maldives, and sold it to Myanmar on the international black market. As Myanmar is facing international sanctions, the junta secretly sold the Burmese and ‘Maldivian’ oil to certain Asian countries, including a wannabe superpower,” alleged Chakrabarti, who is writing a book on Gayoom’s administration and the democracy movement that led to its fall.
“Sources in the Singapore Police said their investigation has confirmed ‘shipping fraud through the diversion of chartered vessels where oil cargo intended for the Maldives was sold on the black market creating a super profit for many years,’” the report added.
Referencing an unnamed Maldivian cabinet Minister, The Week states that: “what is becoming clear is that oil tankers regularly left Singapore for the Maldives, but never arrived here.”
The article draws heavily on an investigation report by international accountancy firm Grant Thorton, commissioned by the Maldives government in March 2010, which obtained three hard drives containing financial information detailing transactions from 2002 to 2008. No digital data was available before 2002, and the paper trail “was hazy”.
According to The Week, Grant Thorton’s report identifies Myanmar businessman and head of the Kanbawza Bank and Kanbawza Football Club, Aung Ko Win, as the middleman acting between the Maldivian connection and Vice-Senior General Maung Aye, the second highest-ranking member of the Burmese junta – one of the world’s most oppressive regimes, perhaps exceeded only by North Korea.
Also allegedly implicated in the Grant Thorton report are Brigader-General Lun Thi, the junta’s Minister of Energy, Aung Thaung, the Burmese Minister of industry, “and his son, Major Pye Aung, who is married to Aye’s daughter, Nander Aye.”
“Another Burmese business couple, Tun Myint Naing (aka ‘Steven Law’) and his wife, were linked to the Gayooms,” alleged The Week.
According to a 2000 report on the Golden Triangle Opium trade by Hong Kong-based regional security analysis firm, Asia Pacific Media Services, “in 1996 Steven Law was refused a visa to the USA on suspicion of involvement in narcotics trafficking”, and several companies linked to him were blacklisted because of his suspected involvement in his father’s drug empire.
His father, Lo Hsing Han, also known as Law Sit Han, is named in the report as a notorious ‘Golden Triangle’ heroin baron turned businessman, with financial ties to Singapore. He was also responsible responsible for arranging a lavish wedding in 2006 for the daughter of Burmese dictator Than Shwe.
“Lo Hsing-han and his family set up the Asia World Company… involved in import-export business, bus transport, housing and hotel construction, a supermarket chain, and Rangoon’s port development,” APMS wrote.
According to The Week report, “Yameen was allegedly aided by Ahmed Muneez, former Managing Director of STO Singapore, and by Mohamed Hussain Maniku, former MD, STO. Maniku was MD from 1993 to 2008, and currently serves as the Maldives’ Ambassador to Washington.
The operation
According to The Week article, the engine of the operation was the Singaporean branch of the government-owned State Trading Organisation (STO), of which Yameen was the board chairman until 2005.
Fuel was purchased by STO Singapore from companies including Shell Eastern Petroleum Pvt Ltd, Singapore Petroleum company and Petronas, and sold mostly to the STO (for Maldivian consumption) and Myanmar, “except in 2002, when the bulk of the revenue came from Malaysia.”
The “first red flag” appeared in an audit report on the STO by KPMG, one of the four major international auditing firms which took over the STO’s audits in 2004 from Price WaterhouseCoopers.
The firm noted: “A company incorporated in Singapore by the name of Mocom Trading Pte Ltd in 2004 has not been discluded under Note No. 30 to the Financial Statements. There was no evidence available with regard to approval of the incorporation. Further, we are unable to establish the volume and the nature of the company with the group.”
In a subsequent report, KMPG noted: “The name of the company has been struck off on 20th April 2006.”
Investigators learned that Mocom Trading was set up in February 2004 as a joint venture between STO Singapore and a Malaysian company called ‘Mocom Corporation Sdn Bhd’, with the purpose of selling oil to Myanmar and an authorised capital of US$1 million.
According to The Week, the company had four shareholders: Kamal Bin Rashid, a Burmese national, two Maldivians: Fathimath Ashan and Sana Mansoor, and a Malaysian man named Raja Abdul Rashid Bin Raja Badiozaman. Badiozaman was the Chief of Intelligence for the Malaysian armed forces for seven years and a 34 year veteran of the military, prior to his retirement in 1995 at the rank of Lieutenant General.
As well as the four shareholders, former Managing Director of STO Singapore Ahmed Muneez served as director. The Week reported that Muneez informed investigators that Mocom Corportation was one of four companies with a tender to sell oil to the Burmese junta, alongside Daewoo, Petrocom Energy and Hyandai.
Under the contract, wrote The Week, “STO Singapore was to supply Mocom Trading with diesel. But since Mocom Corporation held the original contact, the company was entitled to commission of nearly 40 percent of the profits.”
That commission was to be deposited in an United Overseas Bank account in Singapore, “a US dollar account held solely by Rashid. So, the books would show that the commission was being paid to Mocom, but Rashid would pocket it.”
In a second example cited by The Week, investigators discovered that “STO Singapore and Mocom Trading duplicated sales invoices to Myanmar. The invoices showed the number of barrels delivered and the unit price. Both sets of invoices were identical, except for the price per barrel. The unit price on the STO Singapore invoices was US$5 more than the unit price of the Mocom Trading invoice. This was done to confuse auditors.”
As a result, “the sum total of all Mocom Trading invoices to Myanmar Petrochemical Enterprises was US$45,751,423, while the sum total of the invoices raised by STO Singapore was US$51,423,523 – a difference of US$5,672,100.”
Furthermore, “investigators found instances where bills of lading (indicating receipt of consignment) were unsigned by the ship’s master.”
Gayoom's half-brother and PA leader Abdulla Yameen
Money from the Maldives
Despite his officially stepping down from the STO in 2005, The Week referenced the report as saying that debit notes in Singapore “show payments made on account of Yameen in 2007 and 2008.”
Citing the report directly, The Week wrote: “The debit notes were created as a result of receiving funds from Mr Yameen deposited at the STO head office, which were then transferred to STO Singapore’s bank accounts. This corresponded with a document received from STO head office confirming the payments were deposited by Yameen into STO’s bank accounts via cheque.
The Week claimed that Yameen was aided by Muneez on the STO Singapore side, and by Mohamed Hussain Maniku, former STO managing director, on the Maldivian end until 2008.
“In conversation with Mr Muneez, this was to provide monies for the living expenses of his [Yameen’s] son and daughter, both studying in Singapore. Their living expenses were distributed by Mr Muneez,” the Grant Thorton report stated, according to The Week.
In an interview with Minivan News, Yameen confirmed that he had used the STO’s accounts to send money to his children in Singapore, “and I have all the receipts.”
He described the then STO head in Singapore as “a personal friend”, and said “I always paid the STO in advance. It was a legitimate way of avoiding foreign exchange [fees]. The STO was not lending me money.”
He denied sending money following his departure from the organisation: “After I left, I did not do it. In fact I did not do it 3 to4 years before leaving the STO. I used telegraphic transfer.”
Yameen described the wider allegations contained in The Week article as “absolute rubbish”, and denied being under investigation by the Singaporean police saying that he had friends in Singapore who would have informed him if that were the case.
The article, he said, was part of a smear campaign orchestrated by current President of the Maldives Mohamed Nasheed, a freelance writer and the dismissed Auditor General “now in London”, who he claimed had hired the audit team – “they spent two weeks in the STO in Singapore conducting an investigation.”
Yameen said he did not have a hand in any of the STO’s operations in Singapore, and that if Muneez was managing director at the time of any alleged wrong-doing, “any allegations should carry his name.”
He denied any knowledge or affiliation with Steven Law or Lo Hsing Han, and said that as for Mocom Trading, “if that company is registered, Maniku would know about it.”
Asked to confirm whether the STO Singapore had been supplying fuel to Myanmar during his time as chair of the board, “it could have been – Myanmar, Vietnam, the STO is an entrepreneurial trade organisation. It trades [commodities like] oil, cement, sugar, rice to places in need. It’s perfectly legitimate. “
Asked whether it was appropriate to trade goods to a country ostracised by the international community, Yameen observed that the trading had “nothing to do with the moral high-ground, at least at that time. Even even now the STO buys from one country and sells to those in need.”
Asked why the President would hire a freelance writer to smear his reputation after the local council elections, “that’s because Nasheed would like to hold me in captivity.”
The only way Nasheed could exert political control, Yameen claimed, “was to resort to this kind of political blackmail”.
“Unfortunately he has not been able to do that with me. I was a perfectly clean minister while in Gayoom’s cabinet. They have nothing on me.”
Last time around
No love is lost between Yameen and the present Maldivian administration, which detained him and Jumhoree Party (JP) leader Gasim Ibrahim in early July 2010 on accusations of bribery and, according to the police charge sheet, “attempting to topple the government illegally.”
President Nasheed’s cabinet had resigned en masse the week prior, in protest against what they claimed were the “scorched earth politics” of the opposition-majority parliament, leaving only President Mohamed Nasheed and Vice President Mohamed Waheed Hassan in charge of the country. The move circumvented regulations blocking the arrest of MPs while no-confidence motions were pending against sitting ministers.
Several days later, audio recordings of conversations between several MPs, including Yameen and Gasim, were leaked to the media. The recordings carried implications of vote-buying within parliament, suggestions of collaboration with the officials in the Anti-Corruption Commission (ACC), and details of a plan to derail the progress of a taxation bill.
Yameen defended the conversation at the time as “not to borrow money to bribe MPs… [rather] As friends, we might help each other.”
The issue quickly became one of invasion of privacy, and the Human Rights Commission of the Maldives (HRCM) issued a statement to that effect.
Unable to get an arrest warrant extension for the pair through the Maldivian courts, the government quickly found itself facing international criticism and diplomatic urging to “stick to the rule of law”, after Yameen was detained by the military on the Presidential Retreat of Aarah purportedly “for his own protection.”
While in custody, Yameen told local media he did not wish to be detained in ‘protective’ custody. The military refused to present him before the court on a court order, raising more international eyebrows.
Later in July, the President’s Press Secretary Mohamed Zuhair told Minivan News that the government had felt obliged to take action after six MDP MPs came forward with statements alleging Yameen and Gasim had attempted to bribe them to vote against the government.
The opposition PA-DRP coalition already has a small voting majority, with the addition of supportive independent MPs. However, certain votes require a two-thirds majority of the 77 member chamber – such as a no-confidence motion to impeach the president.
Zuhair told Minivan News at the time that given the severity of the allegations against them, neither could be considered prisoners of conscience.
“I cannot describe these people as political leaders – they are accused of high crimes and plots against the state,” Zuhair said.
“These MPs are two individuals of high net worth – tycoons with vested interests,” he explained. “In pursuing their business interests they became enormously rich during the previous regime, and now they are trying to use their ill-gotten gains to bribe members in the Majlis [parliament] and judiciary to keep themselves in power and above the fray.”
“They were up to all sorts of dark and evil schemes,” Zuhair alleged. “There were plans afoot to topple the government illegally before the interim period was over.”
Yameen was also one of many former and serving Ministers on an audit hit-list issued by Auditor General Ibrahim Naeem, prior to his dismissal on March 29, 2010.
Naeem, who was appointed by former President Gayoom, had produced a damning report detailing the previous government’s spending habits. These, according to an article on the report published in the New York Times, included an estimated “US$9.5 million spent buying and delivering a luxury yacht from Germany for the president, $17 million on renovations of the presidential palace and family houses,a saltwater swimming pool, badminton court, gymnasium, 11 speed boats and 55 cars, including the country’s only Mercedes-Benz.”
“And the list goes on, from Loro Piana suits and trousers to watches and hefty bills for medical services in Singapore for ‘important people and their families. There was a US$70,000 trip to Dubai by the first lady in 2007, a US$20,000 bill for a member of the family of the former president to stay a week at the Grand Hyatt in Singapore. On one occasion, diapers were sent to the islands by airfreight from Britain for Mr Gayoom’s grandson,” wrote the NYT, citing Naeem’s report.
The Maldives government had “begun the paper chase”, the NYT report claimed, “but it lacks the resources to unravel a complex trail that it assumes runs through the British Channel Islands, Singapore and Malaysia.”
On March 24, Naeem sent a list of current and former government ministers to the Prosecutor General, requesting they be prosecuted for failure to declare their assets, citing Article 138 of the Constitution requiring every member of the Cabinet to “annually submit to the Auditor General a statement of all property and monies owned by him, business interests and all assets and liabilities.”
He then held a press conference: “A lot of the government’s money was taken through corrupt [means] and saved in the banks of England, Switzerland, Singapore and Malaysia,” Naeem said, during his first press appearance in eight months.
Five days later he was dismissed by the opposition-majority parliament on allegations of corruption by the Anti-Corruption Commission (ACC), for purportedly using the government’s money to buy a tie and visit Thulhaidhu in Baa Atoll. The motion to dismiss Naeem was put forward by the parliamentary finance committee, chaired by Deputy Speaker and member of Yameen’s PA party Ahmed Nazim, who the previous week had pleaded not guilty to ACC charges of conspiracy to defraud the former ministry of atolls development while he was Managing Director of Namira Engineering and Trading Pvt Ltd.
The parliament has yet to approve a replacement auditor general.
Representatives of the former government have steadfastly denied the existence of stolen funds. Gayoom’s assistant and former chief government spokesperson Mohamed Hussain ‘Mundhu’ Shareef told Minivan News in December 2009 that ”there is no evidence to link Gayoom to corruption”, and urged accusers “to show us the evidence.”
“If you have the details make them public, instead of repeating allegations,” he said at the time. “[Gayoom] has said, ‘go ahead and take a look, and if you find anything make it public.’”
Shareef had not responded to Minivan News at the time of going to press.
Before his return, the president visited the Maldives High Commission in Malaysia. He urged the staff to set an example for Maldivians living in Malaysia, and to participate in Malaysian cultural events.
President Nasheed also met with a delegation of Malay business people, where he spoke of the importance of broadening economic relations between the two countries.
He said Maldives is now open for business, and invited them to invest in the country. Senior officials from State Trading Organisation (STO) and Maldives Industrial Fisheries Company (MIFCO) were present at the meeting.
The president also met with a group of Maldivian students in Malaysia. He advised them to pursue their higher education and asked if they were having any “difficulties that needed attention.”
A case concerning the People’s Alliance (PA) leader Abdulla Yameen has been forwarded to the police by the Presidential Commission.
The investigation concerns corruption allegations against Yameen during his time as chairman of the State Trading Organisation (STO). It involves a Rf16.7 million loan from the STO to buy a resort, which was allegedly given to local businessman Abdulla Jabir by Yameen.
The transaction was found to be in violation of corporate principles and was red-flagged in last year’s STO audit report.
Spokesperson for the Presidential Commission, Abdulla Haseen, confirmed they have “finished the report and we have submitted it to police.”
Haseen said the loan was “against corporate governance” and claimed it had been connected to corruption.
“During 2001 the loan was given to the business partner of the STO chairman at the time,” Haseen said, though he would not confirm “who that business partner was.”
He said the commission hopes the case will be forwarded to the Prosecutor General, although it might take a few weeks.
Police Sub-Inspector Ahmed Shiyam confirmed police had received “a new case from the Presidential Commission related to the STO,” but could not give any more details.
Maldivian Democratic Party (MDP) spokesperson Ahmed Haleem confirmed Jabir had recently signed up as a member of the MDP and said the party will benefit from having him as a member “as he is an experienced politician, former MP and spoke out for the change to democracy.”
He noted the MDP was not concerned about Jabir’s suspected involvement in the case, claiming “MDP is not like that, we are very straight-forward.”
He said if someone is accused of corruption, the party would want the Presidential Commission to look into the case.
Former member of the Presidential Commission, Idham Muizzu Adnan, who recently resigned over “political influences”, said he could not discuss details of his work at the commission and could not comment on the case as he had signed a non-disclosure agreement on his departure.
Yameen did not respond to Minivan News by time of press.
A cargo ship belonging the State Trading Organisation (STO) is being held in an Indian port.
The ship was loaded with 44,000 sacks of rice to be brought to Male’.
Ismail Shakir, director general for the ministry of economic development said “The report we have received from the STO is that the ship is being held because the rice they got was not meant to be exported.”
Ismail Sadiq of STO confirmed the report. “The ship belongs to us and so does the rice.”
Sadiq also reassured the public that “The supply of rice will not be affected by this incident.”
The State Trading Organisation (STO) will begin selling its newest onion shipment on Saturday, in an effort to reduce the current high prices for the basic commodity.
According to Miadhu, the STO said that even though the shipment was small, they would continue weekly shipments until prices stabilised.
STO also requested small stores to sell the onions at a set price. Miadhu reported that the STO would keep tabs on these stores and if they did not conform to these prices they would take action against them.
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