Day: May 12, 2015

Government can suspend services to Villa if frozen accounts are empty

If the government is unable to recover sums owed to the state by freezing a company’s accounts, it can suspend all services to the company, including customs clearance and foreign worker visas, the Maldives Inland Revenue Authority (MIRA) has said.

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

But Villa officials today told local media that the accounts of the holding company, the Villa Shipping and Trading Pvt Ltd, are empty.

The government is seeking US$90.4 million 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 MIRA did not freeze the company’s accounts, saying the move may negatively affect the Maldivian economy, local media has said.

Executive director of finance at Villa, Shimad Ibrahim, told Haveeru today that the company’s accounts were empty before the government’s decision to freeze accounts.

“We knew we were going to face financial difficulties before the decision to freeze the accounts. We were set to get a loan to offset the downturn, but that loan was cancelled due to these issues. That is why the company’s accounts are empty,” he said.

Speaking to Minivan News, Fathuhulla Jameel at MIRA said the authority’s enforcement policy allows it to order government offices to suspend all services to the company, and ask the civil court to set an arrangement to recover funds if the company’s accounts do not hold the owed sums.

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 anti-government march.

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Maldives obtains US$20m from Saudi Arabia to manage cash flow

The Maldives has obtained a US$20 million grant from Saudi Arabia for budget support, despite official figures indicating record levels of income and the economic ministry saying it has authorised US$600 million worth of foreign investment this year.

Finance minister Abdulla Jihad told Minivan News today that the Saudi funds will be used to “manage cash flow” as revenue was lower than expected.

A large portion of forecast revenue is expected later in the year, he said, adding that shortfalls are currently plugged through sale of treasury bills.

The forecast for government income in this year’s record MVR24.3 billion (US$1.5 billion) budget is MVR21.5 billion (US$1.3 billion).

The projected revenue includes MVR3.4 billion (US$220 million) anticipated from new revenue raising measures, including revisions of import duty rates, the introduction of a “green tax”, acquisition fees from investments in special economic zones (SEZs), and leasing 10 islands for resort development.

Import duties hikes came into effect on April 1. However, three weeks later, the government reversed hikes for motorcycles and garments. Jihad said revenue from custom duties will be lower than expected as a result of the policy reversal.

Jihad also said acquisition fees from SEZs are expected during the second half of the year.

Tax revenue

The Maldives Inland Revenue Authority (MIRA) said today that the revenue collected in April was 6.5 percent above forecasts and 14.9 percent higher than the same period last year.

Total revenue last month reached MVR940.3 million (US$60.9 million), with goods and services tax accounting for 70 percent of income. Total revenue collected so far this year has reached MVR4.6 billion (US$298 million).

The customs authority also collected MVR574 million (US$37 million) during the first quarter of 2015 as import duties, fees, and fines, representing a 28 percent increase from the previous year.

Further figures by the MIRA show revenue from taxes have been higher than expected in the first quarter of 2015.

The central bank, the Maldives Monetary Authority, meanwhile says business activity in the tourism, construction, wholesale, and retail sectors increased during the first quarter of 2015, and expects further improvements in the second quarter.

Foreign investment

The economic development ministry revealed today that it has authorised foreign investments worth nearly US$600 million this year, and says it is expecting US$1.8 billion worth of foreign investments in the next five years

Registrar of companies Mariyam Wisham told the press that most foreign businesses registered between January and April were investors interested in the tourism, construction, and real estate sectors. The investors were mainly from the Middle East, South Asia, and China, she said.

Economic development minister Mohamed Saeed said the number of foreign businesses registered under the current administration showed investor confidence in the Maldives.

Wisham also revealed that 5,014 new small and medium-sized enterprises have been registered so far this year following the enactment of a new company registration law last year.

But the opposition has criticised the lack of significant foreign investments despite assurances from the government following the passage of its flagship SEZ legislation in August last year.

The government signed a Memorandum of Understanding in March with Dubai Ports World to develop a commercial port and free trade zone near Malé and said a joint venture agreement will be signed in a month.

However, Saeed told the press today that an extension has been agreed upon for negotiations, citing the government’s unwillingness to compromise “national issues” as the reason for the delay.

The main opposition Maldivian Democratic Party has alleged corruption in the deal.

Saudi-Maldives relations

The Saudi Arabian government had pledged the US$20 million during president Abdulla Yameen’s state visit to the kingdom in March.

Contrary to Jihad’s statement that the Saudi funds will be used to manage cash flow, fisheries minister Dr Mohamed Shainee told Haveeru today that the US$20 million in grant aid will be “spent through the budget on various projects the government wants.”

A delegation including officials from the Saudi Fund for Development as well as Saudi contractors meanwhile visited the Maldives last week and gathered information on the various projects for which the government is seeking loan assistance.

The projects included road construction at the airport, an airport hotel, and a road network for Hulhumalé, Shainee said.

Shainee has previously said the Saudi Arabian government also assured loan assistance to develop the international airport.

During the visit, President Yameen held talks with King Salman bin Abdulaziz Al-Saud and Saudi Arabian ministers for education, defence, petroleum and mineral resources, and finance.

Then-Crown Prince Salman had visited the Maldives in March last year. During the trip, he pledged US$1.2 million to build 10 mosques across the country and donated US$1.5 million and US$1 million, respectively, to the health sector and the Islamic ministry’s waqf fund.

Prince Salman also visited the Maldives in April 2010. He ascended to the Saudi throne in January following the death of King Abdullah bin Abdulaziz.

A joint communique issued during president Yameen’s visit stated that the two sides agreed to increase “their commercial exchange while expanding and enhancing investment between the two countries and extending invitations to their respective private sectors to explore the available investment opportunities in both countries.”

“The Saudi Fund for Development will continue to finance the development projects in the Republic of Maldives and will consider participating in the expansion of Malé airport and beach preservation in Hulhumalé,” it added.

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Suspect accused of stuffing murdered girlfriend into suitcase acquitted

The criminal court has acquitted the chief suspect in the murder of Mariyam Sheereen in January 2010, citing insufficient evidence.

Mohamed Najah was accused of killing his girlfriend, stuffing her body into a suitcase, and dumping it at a construction site in Malé.

Almost five years after the murder trial began, chief judge Abdulla Mohamed said in the verdict delivered today that in addition Najah denying the charges, the state had failed to submit conclusive evidence.

The three doctors who examined Sheereen’s body had not been able to determine the cause of death, he noted, and said there was no written evidence of the doctors’ suggestion to conduct a postmortem.

None of the prosecution’s witnesses had testified to Najah committing any act to murder Sheereen, the verdict stated.

The 30-year-old woman’s body was found hidden under a pile of sandbags in a construction site on January 3, 2010 by a Bangladeshi worker.

Police said the body was found 36 hours after her death. Najah was accused of taking the suitcase to the vacant building in a taxi.

The driver of the taxi that Najah took also testified at the trial.

Police showed CCTV footage from January 2 of Najah dragging the suitcase and testified that DNA samples from the bag matched Sheereen’s.

The couple were living together in an apartment in Maafanu Kurahaage.

Witnesses also testified to hearing Najah threatening to kill Sheereen and told the court that she was last seen entering the apartment on the night she went missing.

Prosecutors told the court that Najah had come out several times, locking the door each time, and was later seen leaving with a suitcase.

Judge Abdulla said that the taxi driver had only said that he transported Najah with a heavy suitcase and that he smelled a foul scent only after Najah had left the cab.

The chief judge has been accused by the opposition of corruption and bribery. Former president Mohamed Nasheed – who was found guilty of terrorism charges over the military’s detention of judge Abdulla in January 2012 – had said the judge was suspected of involvement in a “contract killing.”

If he had been found guilty, Najah would have faced the death penalty.

Sheereen’s heirs had told the court that they no objection to Najah’s execution if he was found guilty.

Najah has been previously sentenced to 10 years imprisonment on drug abuse charges in January 2009.

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Bank of Maldives introduces new loan scheme for teachers

The Bank of Maldives launched a new loan scheme today dedicated for Maldivian teachers and lecturers, offering loans up to MVR100,000 for a period of five years.

The new scheme offers teachers loans ranging from MVR 50,000 to MVR 100,000 at a 15 percent interest rate per year, the national bank said today.

“The purpose of the loan is to encourage the development of teachers, whether it is a training program or further studies or to purchase additional equipment such as laptops,” reads a statement by the bank.

Education Minister Dr Aishath Shiham praised the bank for its contribution to the development of teachers.

“Teachers play a pivotal role in our community by nurturing, moulding and shaping the future generations of the nation. As the national bank, we’re proud to launch this customised loan product for this special group of people in our society,” said the bank’s CEO and managing director, Andrew Healy.

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116 May Day detainees released, 129 facing charges

Some 116 people out of a 193 arrested from an antigovernment protest on May 1 have now been released, but the police is seeking charges against some 129 individuals.

The Prosecutor General (PG) office says it is researching the police’s claims, and will decide on prosecution shortly. Protesters face charges of disobedience to order and obstruction of police duty, offences that carry a MVR 3000 fine or six-month jail term.

Approximately 20,000 protesters took to the streets on May 1, demanding the release of ex-president Mohamed Nasheed and ex-defence minister Mohamed Nazim. But violent clashes erupted when protesters attempted to enter Malé’s main Republic square at dusk.

Police used tear gas, pepper spray and stun grenades to disperse protesters. Two police officers were also beaten by protesters resulting in indiscriminate arrests.

Meanwhile, police arrested two men, including Jumhooree Party council member Ali Hameed, from a street protest last night. The two were released within a few hours.

Police say the opposition’s protests must not disrupt public order, and have said the opposition must seek prior permission before organizing demonstrations, despite the constitution saying no prior notice is needed.

May Day arrests

Opposition leaders – Adhaalath party president Sheikh Imran Abdulla, Maldivian Democratic Party (MDP) chairperson Ali Waheed and Jumhooree Party deputy leader Ameen Ibrahim – were also arrested on May Day.

The arrests are the largest from a single protest in a decade. MDP lawyers say detainees were kept in packed cells and were denied medical treatment. Lawyers also said three men arrested on suspicion of beating a police officer were brutalized.

The criminal court granted a blanket 15-day remand for 173 of the 193 arrested. Some 20 women were released after police failed to present them at court within the required 24 hours. Opposition leaders were also remanded for 15 days.

Lawyers have lodged complaints with the high court over the criminal court’s decision to remand all 173 protesters. Appeal hearings over the remand of Imran, Waheed and Ameen have concluded. But the high court has not specified when a verdict will be issued.

Meanwhile, a ninth suspect in the beating of the police officer handed himself in last night. All nine have been remanded for 15 days.

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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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