Comment: ‘Mega-loot’ – the murky and frightening sale of MACL

In my previous article in this column, I raised eight pertinent questions about the Waheed Government’s plan to sell 40 percent shares in MACL to Maldivian companies and individuals.

1. Does the proposed sale maintain economic sovereignty or undermines it?
2. Is the sale of MACL shares really an economic necessity in the current context?
3. What is the reason why the sale has to be conducted within a span of 7 days?
4. Why is there an absolute silence on the valuation of MACL shares?
5. Does Waheed have any moral or constitutional authority to make this decision?
6. Why is there absolute secrecy on issues such as the process to be followed for the sale?
7. Is the timing of this transaction appropriate or is it designed to suit vested interests?
8. Are we seeing a repeat of a series of shady transactions in the aviation space like Mamigili Airport lease extension and sale of Gan Airport to the Champa Group?

My conclusion based on a detailed review of each of these questions was that this proposed sale of MACL shares has all the elements of a big scam and that the Waheed government is going ahead with it brazenly.

Since then, the Privatisation Board has come out with a strongly-worded statement that the only prerogative to manage the privatisation process for government owned companies lies with itself.

Strangely, the board hasn’t even been contacted as yet for anything related to the proposed sale of MACL shares. Vice Chairperson of the Privatisation Board Mohamed Yasir quoted specific sections of the law that gives power to the privatisation board to decide on which companies to privatise, what should be the fair process, what should be the fair valuation as well as the process of establishing the same through an independent expert.

The above statements highlight the audacity of the attempt being made by Waheed government at this mega-loot. I have raised the question of Waheed’s moral and constitutional authority earlier. It now seems that that Waheed Government hasn’t even been acting within its legal authority on this issue. As per the process laid out in law, such privatisation of a government asset should be managed by the Privatization Board after getting Majlis approval for the same. I understand, based on discussions with people who are in the know of things that Waheed has set up a Special Committee headed by Azima Shakoor to manage the process for sale of MACL shares. In essence, rather than having the Privatisation Board and the Majlis take decisions and manage the process, it is the Special Committee headed by Azima Shakoor, Economic Committee of the cabinet and the MACL Board which have been asked to take decisions and manage the process. This is a constitutional transgression by an outgoing government, which certainly needs to be stopped in the tracks.

As a matter of fact, the ‘decision’ by Economic Committee of the cabinet is illegal to start with, since it is not authorised by law to make that decision and at best, they could have put forward a proposal to the board highlighting all the economic arguments and analysis in support of the proposal.

What is also most interesting to note here is the fact that an economic decision by the cabinet is not implemented by the Finance Minister but by the Attorney General, who is supposed to be the legal advisor to the government. So much so that the government’s Finance Minister doesn’t even have the authorisation to answer any questions related to this issue and he has been diverting all questions towards Azima Shakoor. It is not the Attorney General’s mandate to head committees which implement a major economic policy decision of the government. That the Attorney General is heading the committee also says a lot about what is going on – it clearly indicates that Waheed government’s focus is on ensuring that they get away with this sale without any legal hurdles rather than ensuring that government gets the right economic value for its asset.

It is difficult to understand the rush for selling MACL shares by a government that will have no constitutional validity three weeks from now. This level of urgency in selling off government assets may have been called for had we been in very severe economic trouble with an imminent risk of sovereign default or any other comparably dire situation. Fortunately for the Maldives, such a desperate situation hasn’t arisen as yet and this level of urgency behind the rushed sale process is certainly suspicious and needs to be investigated deeply.

Moreover, divesting a state asset is a significant economic policy decision. In most democratic countries across the world, and our democracy is modeled on principles from such stable democracies, there is a code of conduct put in place in light of a pending election. For example, as soon as the elections are announced in India, which is typically 6-8 weeks before the election date, a code of conduct comes in place which prohibits the government from making any new decisions or even undertaking activities such as laying foundation stones for projects! For these 6-8 weeks, the government in power is barred from making any new decisions and only has to focus on implementing the already ongoing initiatives. However, we have a case here where an out-going President is making and implementing a major economic policy decision one week before Presidential elections and only three weeks before he is certain to remit office.

As an unelected President, Waheed has made a number of significant economic decisions about our national assets in the last 1.5 years and has got them wrong, which will have a significant bearing on the country in the times to come. He allowed the sale of two seaplane operators to a single monopoly player but never cared to assess the implications of letting a critical part of Maldives’ tourism value chain be totally controlled by a single entity with now unchallenged power over the entire tourism sector. Much of the tourism industry has already highlighted how the sale of sea plane operations to a single monopoly player is posing an increasing threat to the viability of many resorts.

He also unilaterally cancelled the GMR concession agreement without caring to understand the potential future costs of the decision on future generations and the available trade-offs. Early indications are that the GMR arbitration is not going too well for Waheed government and we may potentially be looking at a huge claim from GMR by next year, which will ultimately have to be paid for by taxpayers like you and me.

He may no longer be the President in three weeks but he is doing all he can to make one final and the most outrageous raid on the Maldives exchequer to satisfy his and his cronies’ insatiable thirst for our national resources. All the early warning signals are there and enough alarms have been raised well in time for all the relevant independent institutions such as ACC, Privatisation Board and the Judiciary to take note of this mega-scam-in-the-making. It will be a significant failure of Maldivian institutions and even the Maldivian people if an unelected head of government is allowed to get away with this significant a loot, bypassing all the regulations and laws laid out in our constitution.

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