Author: Ahmed Naish

Maldives human rights situation ‘rapidly deteriorating’

The human rights situation in the Maldives is “rapidly deteriorating” with the government cracking down on peaceful protests, stifling dissent, and imprisoning opposition politicians, Amnesty International has said.

A delegation from the international human rights organisation conducted a fact-finding mission in the Maldives from April 17 to 22 and released a briefing report titled ‘Assault on civil and political rights’ today.

“There’s a climate of fear spreading in the Maldives, as safeguards on human rights are increasingly eroded. The authorities have a growing track record of silencing critical voices by any means necessary – be it through the police, the judicial system, or outright threats and harassment. This must end immediately,” said Abbas Faiz, Amnesty International’s Maldives researcher, after launching the briefing at a press conference in New Delhi, India.

“The international community must wake up and realise that behind the façade of a tourist paradise, there is a dark trend in the Maldives where the human rights situation is rapidly deteriorating.”

Raghu Menon, Amnesty International India’s advocacy coordinator, who was part of the fact-finding mission, said India as a regional power “has a responsibility to work towards a human rights-friendly environment in the Maldives.”

The delegation also sought meetings with government officials this week, but were offered meetings in May.

President’s office spokesperson Ibrahim Muaz Ali told Minivan News today that he did not wish to comment on the report.

“The government has invited various international organisations. So they will come and reveal [information about] their work. The government does not have to respond to each report. The government will take the initiative and respond in cases where it believes it has to,” he said.

The delegation also requested a visit to the Dhoonidhoo detention centre to meet former president Mohamed Nasheed and other detainees, but the foreign ministry offered to facilitate a visit in May.

Faiz meanwhile called on the government to “immediately end its disturbing crackdown on human rights.”

“Political tensions are already at a boiling point, and further harassment and attacks on those opposing the authorities will only make the situation spiral out of control,” he warned.

“The international community cannot turn a blind eye to what is happening in the Maldives. The upcoming UN [Universal Period Review] session in Geneva in May is a key moment to push the Maldives authorities to immediately take concrete action to improve the country’s human rights situation.”

Crackdown

Amnesty said the government was “abusing the judicial system” to imprison political opponents, including opposition leader Nasheed, ex-defence minister Mohamed Nazim, and former ruling party MP Ahmed Nazim.

“Mohamed Nasheed’s imprisonment came after a sham trial, but he is far from the only one locked up on trumped-up charges and after unfair trials. It is disturbing how far the Maldives government has co-opted the judiciary as a tool to cement its own hold on power,” said Faiz.

Amnesty also noted that at least 140 people have been arrested from opposition protests since February, with the court releasing several protesters on the condition that they do not attend protests for 30 to 60 days.

The opposition, human rights NGOS, and the prosecutor general have said the condition is unconstitutional as freedom of assembly is a fundamental right.

“Additionally, police have imposed far-ranging restrictions on where and when protests in the Maldives capital Male can take place,” Amnesty said.

“Demonstrations are only allowed in certain areas far away from official buildings, contrary to international law and standards.”

The briefing also noted increasing threats and attacks against journalists, civil society organisations, and human rights defenders, adding that police have not “meaningfully” investigated threatening text messages or phone calls.

Amnesty said that “vigilante religious groups allegedly in cahoots with the police have in recent years stepped up kidnappings and attacks on social gatherings, in particular against those accused of promoting ‘atheism.'”

“This year, such gangs have in connivance with police attacked peaceful demonstrators, yet no one has been brought to justice for these attacks.”

The briefing also noted that the Supreme Court last year charged the Human Rights Commission of the Maldives (HRCM) with “high treason and undermining the constitution” following the state watchdog’s submission on the state of human rights in the Maldives to the UPR.

Meanwhile, in an op-ed published on The New York Times this week, Mariyam Shiuna, executive director of local NGO Transparency Maldives, observed that “political persecution has intensified, civil society is silenced and media intimidation has become the norm.”

“The international community needs to put pressure on the government to halt its crackdown on opponents and dissidents from all parts of the political sphere. Without basic freedoms and space for dissent the Maldives is slipping back to the dark days of dictatorship,” she wrote.

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Parliament reverses import duty hikes for garments and motorcycles

The parliament today reversed import duty hikes for garments and motorcycles, three weeks after increased rates came into force.

Higher tariffs approved by parliament in December as part of revenue raising measures proposed by the government came into force on April 1.

However, days before the changes took effect, economic development minister Mohamed Saeed told the press that the government was reviewing the new rates as motorcycles had become “a basic need in the Maldives”.

The custom duty for motorcycles had been raised from 100 to 150 percent.

A marketing executive at Sheesha Pvt Ltd, one of the largest automobile whole-sale and retail traders in the country, told Minivan News today that the company has not increased prices as its last shipment arrived before April 1.

Sales picked up dramatically in early February and its stock of motorcycles was completely sold out before April, the executive said.

In late March, hundreds of people queued up to buy cigarettes before import duties on tobacco was hiked from 150 to 200 percent and from 90 laari to MVR1.25 for a single cigarette.

The amendments passed today also require the customs authority to reimburse motorcycle importers who were charged the hiked rates from April 1.

However, Sheesha does not expect a reimbursement as its new shipment has not cleared customs yet.

According to a 2011 report by the Environment Protection Agency, one in six residents of the capital own a motorcycle.

Debate and voting on the government-sponsored legislation meanwhile took place today amid continuing protests by opposition Maldivian Democratic Party (MDP) MPs.

The amendments to the import-export law submitted by Progressive Party of Maldives (PPM) MP Jameel Usman were passed with 46 votes in favour.

The import duty for ready-made garments was raised from zero to 15 percent in April last year. The rate will be brought back to zero once the amendments are ratified.

MP Ahmed Nihan, parliamentary group leader of the PPM, said today that discussions are ongoing with the government to reduce tariffs for other items as well, including heavy-duty vehicles used for construction.

Former minister Mahmoud Razee told Minivan News earlier this month that the government was “flip-flopping” with its policy reversals.

In December, the government also reversed a decision to impose a 10 percent import duty on staple foodstuff such as rice, flour, wheat and sugar.

“There’s no clear-cut, defined, long-term policy,” the economic development minister under the MDP government said.

Revenue raising measures

This year’s record MVR24.3 billion (US$1.5 billion) state budget includes MVR3.4 billion (US$220 million) anticipated from new revenue raising measures.

In addition to revisions of import duty rates, the measures include the introduction of a “green tax” in November, acquisition fees from investments in special economic zones, and leasing 10 islands for resort development.

The government expected MVR533 million (US$34.5 million) in additional income from import duties.

On April 1, the import duty for oil or petroleum products was raised from zero to 10 percent while duties for luxury cosmetics and perfume was increased from zero to 20 percent.

The import duty for cars, vans, and jeeps was hiked to 200 percent.

Import duties were also raised in April 2014 for most items, including textiles, cotton, sugar confectionaries, iron, steel, diesel motor oil, and seat covers of passenger vehicles.

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Tourism ministry seizes environment regulatory powers

The parliament has granted powers to the tourism ministry to authorise developments on resorts in a move critics say will weaken the environment protection regime, and pave the way for corruption.

Amendments to the tourism law passed today transfers to the tourism ministry the Environment Protection Agency’s (EPA) powers to evaluate environmental impact assessments (EIAs) and authorise projects such as land reclamation. The agency functions as an independent body under the environment ministry.

Voting on the bill submitted by government-aligned MP Mohamed Ismail took place amid continuing protests by opposition Maldivian Democratic Party (MDP) MPs.

It was passed with 41 votes in favour after Speaker Abdulla Maseeh Mohamed asked for a show of hands.

If the amendments are ratified, resorts will have to seek authorisation from the tourism ministry for any development that could “permanently alter” the island, plot of land, or lagoon’s environment. The ministry must evaluate an EIA report before issuing permission.

EPA permanent secretary Ajwad Musthafa told the economic affairs committee during its review of the legislation last week that “the independent checks and balances system will be lost” if the regulatory powers are transferred to the tourism ministry.

The move amounts to allowing the tourism ministry to “self-regulate,” he contended.

The EIA process is the “main instrument” of the environment protection regime and adheres to international best practices, he said, noting that the reports are prepared by independent and qualified consultants.

Ajwad also objected to transferring technical experts to the tourism ministry as the agency’s “institutional capacity” was built up over a long period.

EPA director Miruza Mohamed meanwhile warned that the move could reduce funding from international donors.

However, the ruling party says “making the services available under one roof would ease the burden on investors, speed up services, and improve investor confidence.”

The involvement of other ministries and institutions in regulating resorts hinders the tourism ministry and “lowers investor confidence”.

The new provisions state that “only the tourism ministry will have the authority” to conduct assessments and authorise development projects.

The tourism ministry will also have the power to impose fines not exceeding US$5 million for violations.

Transparency and accountability

Environmental NGO Ecocare warned that the move conflicts with the environment protection law – which requires the EPA to evaluate assessments – and could “pave the way for corruption”.

“Under this particular scenario we also feel that when EPA assess and evaluates EIA reports, it is a more transparent practice than leaving this to the Tourism Ministry, who carry out the evaluation and awarding of bids for tourist resorts,” Ecocare said in a press release today.

The current system put in place by the Environment Protection and Preservation Act includes checks and balances and assures transparency and accountability, Maeed Mohamed Zahir from Ecocare told Minivan News today.

With the changes to the law, an unscrupulous official at the tourism ministry can grant approval “regardless of the effect on the environment,” he said.

Opposition Maldivian Democratic Party (MDP) MP Fayyaz Ismail said at the committee last week that the tourism ministry presently “discriminates” in issuing and suspending operating licenses to resorts.

Fayyaz warned that officials could misuse the authority to approve development projects on resorts and selectively impose fines at whim.

MP Ali Fazad, a ruling Progressive Party of Maldives MP, also expressed concern with the amendments conflicting with the existing environment law as “two laws would have two [provisions] for the same thing”.

However, all ruling coalition MPs on the committee voted in favour of the bill and forwarded it to the parliament floor.

The law also introduces a new scheme to allow the extension of resort leases to 99 years for a lump sum payment of US$5 million.

The changes aim to incentivise investors, make it easier to obtain financing from international institutions, and increase revenue for the government.

To be eligible for a lease extension, a resort property must be operational with an existing lease period of 50 years and must not owe money to the government.

Under the current Tourism Act, the maximum lease period for resorts or hotels is 50 years. However, the constitution allows leases up to 99 years.

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Horns and megaphones banned in parliament chamber

The People’s Majlis today banned the use of horns, sirens and megaphones in the parliament chamber following weeks of protests by opposition MPs.

MPs of the Maldivian Democratic Party and Jumhooree Party have been protesting since March 2 over the arrest and imprisonment of former president Mohamed Nasheed on terrorism charges.

Opposition MPs continued protests with horns and megaphones today, but Speaker Abdulla Maseeh Mohamed called for a vote on the changes proposed to the parliamentary rules despite the disorder in the chamber.

The changes were proposed by the speaker and approved with 43 votes in favour at today’s sitting.

The debate on the bill was once again inaudible to the viewing gallery and the parliament secretariat ceased providing a live feed of the sittings to television stations this morning.

“Work on bringing an end to the MDP’s horns by amending article 51 of the parliament rules is on the agenda today,” tweeted majority leader Ahmed Nihan before today’s sitting.

Nihan was not responding to calls at the time of publication.

MDP spokesperson Imthiyaz Fahmy told Minivan News today that opposition MPs will continue the protests.

With daily anti-government demonstrations and heightened political tension, the state of the nation shall be reflected in the People’s Majlis, he said.

“While democratic principles are destroyed and political leaders are jailed, the Majlis is a place where such issues can be resolved,” he said.

The MPs are calling for a resolution to the political crisis, but the “current majority party does not want to listen,” he added.

Imthiyaz also questioned the need for the changes as the rules allow the speaker to order the sergeant-at-arms to expel MPs who disrupt sittings.

He contended that laws were passed in recent weeks in violation of parliamentary rules as voting took place with disorder in the chamber.

Constituencies represented by opposition MPs did not have a say either, he added.

Previous speakers resolved disputes through dialogue with political parties, but the current speaker “is too dictatorial and doesn’t even want to talk to the minority,” he said.

Maseeh is conducting sittings in violation of the rules while insisting that there was order in the chamber despite the protests, Imthiyaz said.

But neither the speaker nor MPs were able to hear debates, he noted.

Last week, a three-month delay for the implementation of the new penal code was approved with a show of hands amid protests by MDP MPs.

Rules of procedure

The new provisions state that cases of MPs who use horns or megaphones and approach the speaker’s desk will be investigated by the ethics committee.

The committee can cut 55 percent of an MPs’ monthly committee allowance and suspend participation in an official parliament trip for six months.

Imthiyaz said the proposed punishment was “ridiculous” as it amounted to undoing or erasing committee attendance.

MPs receive a monthly allowance of MVR20,000 for attending more than 50 percent of committee meeting.

The purpose of today’s changes to impose pay cuts on opposition MPs as the ruling coalition lacked two-third majority required by the constitution for non-payment of salaries and allowances, he said.

He also noted that the MDP parliamentary group leader sent a letter to Maseeh expressing concern with sittings taking place in violation of the rules.

However, in a meeting last week, Maseeh insisted that he was following the rules.

Imthiyaz also objected to the speaker refusing to allow MDP MPs to speak during debates and advocate on behalf of their constituents.

At a previous sitting, deputy speaker ‘Reeko’ Moosa Manik refused to allow MDP MP Mariya Ahmed Didi to speak.

Imthiyaz said Mariya was seated, but the deputy speaker said the MDP MP will not be allowed to speak while her fellow MPs were protesting.

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Chief judge praises criminal court over Nasheed’s trial

Chief judge Abdulla Mohamed has praised judges and staff at the criminal court for the swift conclusion of former president Mohamed Nasheed’s terrorism trial which related to the judge’s arrest in 2012.

The criminal court handed Nasheed a 13-year jail term, sparking international outrage and daily protests across the country.

“The Maldivian military was brought to alert, tents set up at the justice building, scan machines were kept, and the whole country was brought to alert,” Judge Abdulla was quoted as saying by local media.

“A three-judge panel was formed, and a verdict was delivered in 19 days by criminal court judges and staff in a case that couldn’t be concluded in three years,” the chief judge said at a function held last night to mark the court’s anniversary.

Nasheed’s rushed trial was widely criticised by foreign governments, the UN, and Amnesty International for its apparent lack of due process.

Judge Abdulla meanwhile said criminal court judges and staff were awake at night and during weekends while the rest of the judiciary was asleep.

The court proved that the “judiciary is awake” after “matters reached the state where some people believed the judiciary was incapable.”

In addition to Nasheed, his defence minister Tholhath Ibrahim Kaleyfaanu, then-chief of defence forces Moosa Ali Jaleel, then-Malé Area Commander Brigadier General Ibrahim Mohamed Didi, and ex-colonel Mohamed Ziyad were charged with terrorism over the judge’s arrest.

Tholhath was found guilty and sentenced to 10 years in prison.

Nasheed has meanwhile accused Judge Abdulla of involvement in a “contract killing,” and said he had blocked an investigation into his misconduct by the judicial watchdog, and obstructed the police from carrying out their duties.

Judge Abdulla last night also said unlawful arrests by the state have not come to an end, despite six years passing after the adoption of the 2008 constitution.

Seven cases of unlawful detention were submitted to the court last year, he said.

Judge Abdulla said last year’s cases of unlawful arrest included four expatriates suing the immigration department, and one expatriate suing the police. In addition, three Maldivians sued police and the correctional services.

He also referred to the arrest of then-MP Abdulla Yameen and MP Gasim Ibrahim in 2010.

“There’s no doubt that these matters will become a lesson in Maldivian history,” judge Abdulla reportedly said.

He called for more benefits and additional security to criminal court judges.

Lack of space and facilities at the court posed difficulties in providing lawyers access to their clients and the ability to study case documents, the chief judge said.

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World Bank reiterates concern over unsustainable spending

The Maldives is spending beyond its means with government expenditure outstripping revenue for years, the World Bank has warned.

Contrary to the government’s estimate of 3.4 percent of GDP for the fiscal deficit in 2014, the World Bank said the deficit has been on “an upward trajectory since 2011” and reached an estimated 11.6 percent last year.

“Despite high revenue of 32.4 percent of GDP, Maldives is spending beyond its means reaching 44 percent of GDP, leading to persistent fiscal imbalances,” reads the South Asia Economic Focus 2015 report released last week.

“Subsidies, transfers and social welfare payments contributed substantially to the expansive spending,” the report stated.

The spike in expenditure resulted from President Abdulla Yameen’s decision to increase wages and an allowance to senior citizens from MVR 2300 to MVR 5000.

The World Bank meanwhile said the country’s risk of external debt distress has been reduced from high to moderate due to revised estimates of a lower current account deficit.

However, overall public debt is high at 74.6 percent of GDP in 2014, the report noted.

“Although the level of external public and publicly guaranteed debt remains below the policy-dependent thresholds under the baseline, a shock to tourism exports could make it difficult for the country to service its external debt,” the World Bank cautioned.

While imports and tourism receipts nearly balance each other out, the report explained that  “substantial outflows through interest payments, dividends and remittances keep the current account in a deficit at 8.0 percent of GDP.”

“The current account is more than fully financed by Foreign Direct Investment (FDI), and gross international reserves are estimated to have increased. Net FDI inflows are estimated at 13.3 percent of GDP,” it added.

Usable reserves are estimated at US$120 million, enough for less than half a months imports, but “the private sector is able to supply sufficient quantities of foreign exchange.”

“Faced with limited investment opportunities in the private sector, banks are parking their assets elsewhere; meanwhile financial soundness indicators have been improving,” it added.

Challenges

While the government’s forecast for economic growth in 2015 is 10.5 percent, the World Bank said growth is projected at five percent and warned of a negative impact from spending cuts.

The International Monetary Fund has also welcomed the government’s cost-cutting and revenue raising measures for 2015, including imposing a green tax, acquiring fees from Special Economic Zones, raising import duties, a public employment freeze, and better targeting of subsidies.

The World Bank meanwhile suggested that state-owned enterprises may pose risks as “most are loss-making and depend on government support”.

Only nine companies have contributed dividends in the past four years, it noted.

“The immediate macroeconomic challenge is the fiscal and external imbalances driven by high and rising public spending,” the report advised.

“However, the economy also remains undiversified and sources of growth and employment remain misaligned. Besides, Maldives’ form of tourism- led growth has followed an enclave model, reliant on imported goods, labor and finance.”

Balancing the budget in two years is a campaign pledge of president Yameen, who said last year that the record MVR24.3 billion (US$1.5 billion) state budget for 2015 has a “primary balance surplus.”

The projected fiscal deficit for 2015 is MVR1.3 billion (US$84 million) or 2.5 percent of GDP, which president Yameen said was allocated for arrears or unpaid bills from recent years.

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Maldives blames GMR, Axis Bank for sanctions by India after airport takeover

An Indian infrastructure company and a bank successfully lobbied India for sanctions on the Maldives over the 2012 cancellation of a deal to develop the international airport, the government has claimed.

The government made the allegation last month at a Singaporean arbitration tribunal, where India’s Axis Bank is seeking the repayment of a US$160 million loan from the Maldives. The loan was given to GMR group in 2011 to upgrade and manage the Maldives’ main airport.

India had tightened visa regulations for Maldivians and ceased exporting some construction materials to the Maldives, after the government took over the airport in 2012, but neither India nor the Maldives had explained the reasons for the sanctions.

India only lifted the restrictions after President Abdulla Yameen was elected in November 2013.

In its submission to the Axis Bank tribunal – obtained by Minivan News – the government claimed the bank had been involved in an “attempt to secure political pressure from the Indian government” to prevent cancellation of the deal.

The Axis Bank in 2012 also told the government it would “approach the regulatory-diplomatic authorities in India” after GMR was ordered to handover the airport, the government said.

GMR also wrote to the prime minister in August 2012 “requesting intervention by the Indian government, when it was clear that future of the concession agreement was in jeopardy,” the government said.

GMR is meanwhile claiming US$803 million from the Maldives in a separate arbitration after the tribunal ruled last year that the government had “wrongfully” terminated a “valid and binding” concession agreement.

The campaign by GMR and Axis Bank led to Indian officials including then-Prime Minister Manmohan Singh telling ex-president Dr Mohamed Waheed that the “Indian government stood ready to assist GMR in making sure [the cancellation] did not happen.”

According to minister Mohamed Hussain Shareef, “the message [Waheed] got from them was confident and unbending: they expected [the Maldivian government] not to take any action to terminate the concession agreement”.

The Indian government subsequently “insisted on the repayment of outstanding debts of US$100m” in mid-November 2012 and warned of “repercussions” shortly before the agreement was terminated, lawyers representing the Maldives said.

The lawyers also alleged that then-Indian high commissioner to the Maldives “sought to intervene through several meetings with [then-defence minister Mohamed Nazim] in which he asked the Maldives to cooperate in allowing GMR/GMIAL back into the airport.”

Nazim in his testimony said that the message from India was “either back off or suffer the consequences.”

Documents disclosed during arbitration proceedings also showed that the Axis bank’s officials had met the Indian High Commissioner in January 2013, a month after the government took over the airport, lawyers added.

The submission noted that former president Mohamed Nasheed stated after a visit to India in February 2013 that “India believes the deteriorating ties between Maldives and India will recover” if the 25-year contract is restored.

“On 11 March 2013 several Indian Navy attack craft were reported as having conducted exercises just outside Maldivian territorial waters,” it added.

With the tightening of visa regulations for Maldivian citizens, dozens of people to queued outside the Indian High Commission to obtain visas to travel for medical treatment.

In February 2013, the Indian government revoked a special quota afforded to the Maldives for the import of aggregate and river sand. The move led to a shortage of the supply of construction material and rising costs for construction companies.

The current Indian Prime Minister Narendra Modi meanwhile invited the GMR chairman to a state banquet in honour of President Abdulla Yameen in January 2014, lawyers representing the Maldives noted.

Minivan News is awaiting a response to the allegations from the Axis Bank and GMR, while the government has declined to comment on the ongoing arbitration.

The Axis Bank is seeking repayment of the US$160 million loan as well as an additional US$10 million as interest and fines from the Maldivian government. The bank contends that state is liable for the loan in the event of an early termination or an expropriation of the airport.

However, the government has argued that declaring the concession agreement invalid from the outset does not amount to an early termination. The government also accused the Axis Bank and GMR of colluding to extract large sums of money, claiming the developer paid for the bank’s litigation fees for the separate arbitration process.

The Axis Bank meanwhile dismissed the argument as “highly semantic” and stated: “what words were used by the government to characterise its own acts are irrelevant to establishing whether the acts of the government amounted to an expropriation.”

Verdicts are expected in both the GMR and Axis Bank arbitrations in June.

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Villa accounts freeze will ‘send shockwaves’ through Maldives economy

Jumhooree Party leader Gasim Ibrahim’s Villa Group has warned of negative repercussions for the Maldivian economy if the tax authority freezes the company’s bank accounts next week.

A 20-day final notice seeking US$90.4 million allegedly owed as unpaid rent, fines and interest expires on Saturday (April 18), while the civil court last week refused to grant stay orders halting enforcement of the notice.

The enforcement policy for defaulting taxpayers involves freezing bank accounts to recover the unpaid amounts and ceasing to provide services from any state institution.

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.

“It is not only Villa’s shareholders’ and the company’s rights that are lost [if bank accounts are frozen]. The rights of a lot of employees who work at the company, small and medium-sized businesses dependent on this company, guests who have made bookings at our resorts, tour operators, and many other people, would also be lost,” said Villa Group executive director Shimad Ibrahim at a press conference last night.

Banks that have issued loans to Villa will also be affected, he added.

“In sum, we are having to face something on Sunday that will send shockwaves through the whole economy,” he said.

The holding company Villa Shipping and Trading Pvt Ltd conglomerate operates businesses in shipping, import and export, retail, tourism, fishing, media, communications, transport, and education.

Villa business secretary Ibrahim Rasheed added: “We are all holding our breath.”

Rasheed said the company will continue to seek “a peaceful resolution” and “hope for justice”.

He noted that Villa companies employ about 5,000 people.

In an interview on his Villa Television on Saturday, Gasim repeatedly appealed for talks with president Abdulla Yameen and tourism minister Ahmed Adeeb to resolve the dispute.

However, the Villa officials said the government has not responded to “pleas” for discussions.

Adeeb meanwhile accused Gasim at a ruling coalition rally last week of hoarding islands and lagoons and refusing to pay money owed to the state.

“Fabricated”

The Maldives Inland Revenue Authority (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. 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”.

If rent is not paid, the government is required to give a 30-day notice before issuing fines or seizing the properties, they noted.

The lease agreements also specify procedures for termination on the grounds of financial or non-financial breaches, but the tourism ministry’s termination notices did not refer to any violation.

“This is something that investors should seriously consider. This is a frightening and dangerous thing,” said Villa lawyer Ahmed Shafeeq.

In response to a letter from Villa contending there was no basis for the fines, Shimad said MIRA told the company it was “following instructions” from the tourism ministry.

Settlement agreement

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 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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Gasim’s Villa group bankruptcy imminent

Jumhooree Party (JP) leader Gasim Ibrahim’s Villa Group is facing bankruptcy with the courts refusing to issue stay orders on a US$90 million payment to the state ahead of an April 18 deadline.

The civil court yesterday denied Villa’s requests for stay orders, stating the company does not face “irrevocable losses” if a notice by the tax authority to collect US$90 million in allegedly unpaid rent and fines is enforced.

The rulings pave the way for the state to freeze Villa’s bank accounts after April 18.

Gasim has said unfairly freezing Villa’s accounts would “impoverish thousands of citizens” and that the public does not want one of the largest companies in the country to “head towards bankruptcy.”

However, the court said the state could reimburse and compensate the company if the ongoing cases are decided in Villa’s favour.

The JP launched daily anti-government demonstrations in alliance with the main opposition Maldivian Democratic Party (MDP) in early February.

However, since the notice was issued, Gasim has not been seen in opposition protests or made any comments on a deepening political crisis.

Gasim made an appearance on Villa TV on Saturday for the first time in weeks and appealed for discussions with the government to resolve the dispute, insisting that Villa does not owe the “imaginary” amount.

He noted the JP had not condemned the sentencing of former president Mohamed Nasheed to 13-years in jail on terrorism charges last month

“When the judiciary made a judgement I don’t want to comment on it,” he said.

The JP is remaining “silent” and presently does not have a “stand” of supporting any party, Gasim said.

The party is not officially a part of the ‘Maldivians against brutality’ campaign launched by the MDP and religious conservative Adhaalath Party, he added.

Two European banks have cancelled loans worth US$80 million due to media reports of the notice, Gasim said.

Gasim’s interview followed strong criticism from tourism minister Ahmed Adeeb at a ruling coalition rally last week. He accused the tycoon of hoarding islands and lagoons and refusing to pay money owed to the state.

Adeeb also said the JP leader was “in hiding” after unsuccessfully seeking the presidency through his opposition alliance.

In response, Gasim said he is following his best judgment and suggested Adeeb’s anger might stem from insecurity or “lack of self-confidence”.

However, Gasim said he does not bear “animosity towards anyone” and repeatedly said he is ready to meet president Abdulla Yameen or Adeeb at any time.

Senior members of the JP are active in street protests in their individual capacity, Gasim said.

Bankruptcy

The government denies the opposition’s accusations of unfairly targeting Gasim’s business following the JP’s split from the ruling coalition.

The tourism ministry terminated agreements for several properties leased to Villa and subsidiary companies on February 5, shortly after the JP formed the alliance with the MDP.

On February 26, a day before an MDP-JP anti-government mass rally, the Maldives Inland Revenue Authority (MIRA) gave a 30-notice for Villa to pay US$90 million allegedly owed as unpaid rent and fines for the seized properties.

Gasim did not attend the February 27 protest march after failing to return from a trip to Sri Lanka

After the 30-day notice expired, MIRA issued a 20-day notice warning Villa that its accounts will be frozen under the authority’s enforcement policy against defaulting taxpayers.

After the tourism ministry terminated the agreements, Villa filed five cases against the ministry in February, contending that the move was unlawful.

Five additional cases were filed against MIRA over the US$90 million notice.

In rulings during the past two weeks, the civil court refused to grant stay orders in any of the cases. Villa is currently in the process of appealing the rulings at the High Court.

While the court initially granted a stay order in one case in early February, the High Court overturned the ruling.

A Villa official told Minivan New today that the judge who granted the stay order was transferred to the drug court.

The official explained that the properties at stake were leased as part of a settlement agreement signed with the government on December 12, 2013, less than a month after president Yameen took office.

The settlement agreement was reached after the Supreme Court ordered the state to pay over US$9 million to Villa. As part of the settlement, the government signed ‘reinstated and amended lease agreements’ with Villa for several islands and lagoons.

Gasim noted that Villa paid the state about US$15.8 million eight years ago as advance payment for the leased properties.

However, MIRA issued the 30-day notice claiming Villa owed US$75 million as fines and more than US$14 million as unpaid rent dating back to the original lease agreements signed in 2006 and 2007.

Under the settlement agreement, the government had agreed to forgo rents for the leased islands and lagoons for five years and seven years, respectively.

Correction: A previous version of this article stated that the tax authority is seeking US$100 million from the Villa Group, based on statements by Gasim Ibrahim. The company has since explained that the accurate figure is US$90 million. 

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