The Anti-Corruption Commission (ACC) has filed a case with the Prosecutor General’s (PG) Office today over the decision to allow infrastructure group GMR to deduct a court-blocked Airport Development Charge (ADC) from concession fees owed to the state.
The deducted concession fees were to have been paid to the state-owned Maldives Airports Company Limited (MACL).
As part of the filed case (Dhivehi), the ACC is seeking reimbursement of MVR 353.8 million (US$22.9 million) from former MACL Chair Ibrahim ‘Bandhu’ Saleem and former Finance Minister Mohamed Shihab over the alleged misuse of authority it claimed had led to significant financial loses for the state.
The ADC issue had been a key point of contention between GMR and the administration of President Dr Mohamed Waheed Hassan Manik before his government opted last month to void a sovereign agreement with the India-based infrastructure group to develop and manage Ibrahim Nasir International Airport (INIA).
When contacted by Minivan News today, a PG’s Office spokesperson confirmed that the ACC case had been received, but could not provide any further details on the matter while its investigations were taking place.
The spokesperson claimed that under normal procedure, whether a case was submitted from an institution like the ACC or the Maldives Police Service, the PG’s Office would review all details before deciding whether to move ahead with a prosecution.
ACC case
According to the case filed by the ACC, former Finance Minister Shihab stands accused of misusing his ministerial authority to benefit a third party by allowing GMR to deduct the ADC and insurance charges from concession fees it owed MACL between October 2011 and September 2012.
Shihab was not responding to calls from Minivan News at time of press.
The ACC has also accused former MACL Head Saleem of allowing GMR to deduct the ADC through a consent letter signed in violation of the company’s rules. According to the ACC’s case, normal procedure for MACL would be to have the company’s Board of Directors pass a resolution allowing for consent to be given to deduct the ADC.
Airport Development Charge
In late 2011, the then-opposition Dhivehi Qaumee Party (DQP) filed a successful Civil Court case blocking GMR from charging an ADC – a US$25 charge for outgoing passengers stipulated in its concession agreement with the government – on the grounds that it was a tax not authorised by parliament.
Former President Mohamed Nasheed’s administration chose to honour the original contract, and instructed GMR to deduct the ADC revenues from the concession fees due to the government through state-owned MACL, while it sought to appeal the Civil Court ruling.
However, the Nasheed government fell a month later and the opposition inherited the result of its court victory, receiving a succession of bills from the airport developer throughout 2012, despite the government’s insistence that the January 5 letter from MACL outlining the arrangement was no longer valid.
In the first quarter of 2012, the government received US$525,355 of an expected US$8.7 million, after the deduction of the ADC. That was followed by a US$1.5 million bill for the second quarter, after the ADC payable eclipsed the revenue due to the government.
Combined with the third quarter payment, the government at the time of the GMR contract termination owed the airport developer US$3.7 million.
GMR attempted to compromise by offering to exempt Maldivian nationals from the ADC.
The offer was claimed to have had been personally mailed by GMR Chairman G M Rao to President Waheed. However, GMR later claimed to have received no response from the government on the matter.
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Its not these two people who need to be punished. We need to punish the man who had ordered them to sign these documents which is Nasheed.
Poor Lawyers who had advised GMR on ADC before executing the deed.
You're really upset about having your drug supply line cut, eh?
Too bad; your afghan buddies are having an outbreak of a fungus that destroys their opium poppies.
In the end, you don't get your drugs, you get a barely-developed airport, a massive debt and compensation to pay.
Haneef. There are very few poor lawyers. If you have children, I suggest you encourage them to study law.
Mody, as usual, moronic shit. You never provide proof. I can't take you seriously.
Oho.
I don't need to provide proof to you and things will get unfolded soon.
People like you are blind and are the victims of Anni disease and i understand that perfectly well.
You guys have no choice but to defend the idiot with the hope that he will come back to power again.
Mohamed Shihab used to be popular in a lot of households in Male'. But if Anti-corruption commissions move goes forward to Court proceedings, then a lot of people in Male' are going to hate him. A lot.
The Anti-corruption commissions claim is that Shihab, acting as Finance Minister used his influence to benefit GMR in allowing GMR to deduct Airport development charge from the revenues paid to State. Thereby resulting in the stupendous situation where Maldivians had to pay GMR, instead of GMR paying its revenues to the govt. (As happened throughout much of last year).
Lets ask ourselves, what would any other person who had been in the position of Finance Minister done ?
Would he have given consent for this move to go through ? Knowing that this would result in a loss of revenue to the Maldivian govt, yet let it go ahead because of MDP's pledge to develop the airport might have gotten stuck in the mud if GMR had not had their way ?
Isnt the post of Minister of Finance and Treasury used to protect the interests of the Maldives people ? Why then did Shihab consent to everything that GMR wanted and let them walk all over us Maldivians ? Cudnt he have instead tried manage it so that Maldivian govt does not lose revenue and end up not having to pay GMR ?
Did Shihab think this through ? I mean, a guy who has headed Maldives Ports Authority should have this much of common and business sense shouldnt he ? Why then didn't he do the right thing for the Maldivian people ? (Instead of the thing that would benefit an Indian company the most) ?
@geronimoooooooo, Do you know what a contract means, do you know that in almost all contracts of significance there is a clause called the indemnity clause, did you know that Maldivian Government was the guarantor to this particular contract. Did you know that there is an attorney general in the Maldives and what is his function as defined under the constitution, do you know what advise the AG gave to the Finance Minister, do you know that a contract is to be honoured and is not just a piece of paper. Do you know if GMR could not get the ADC lenders may recall their loans, do you know that if GMR invokes the indemnity clause and ask the guarantor to pay for the damages GMR may incur, this may result the guarantor paying more that just the ADC charge. Did you know after the change of government the new government allowed GMR to continue to deduct the ADC from its payment to the Government and that no attempt was made to prevent it.
I think you do not know many things and commenting with limited knowledge is irresponsible.
@ ali
I know that GMR was contracted to build and develop the Maldivian airport.
I also know, that GMR was supposed to do it by investing its own money, not by extorting money from the Maldivian people. You can call it ADC or you can call it whatever you want, Maldivians should not have been billed for developing the airport that GMR agreed to develop with its own funds.
GMR was supposed to invest the profits it earned from running the airport into developing the airport.
Being prohibited to levy Airport Development surcharge by a court order does not give GMR the excuse to start billing the Maldivian govt.
There was a route that GMR and the MDP could have followed to make it possible for GMR to levy ADC. The court verdict prohibited GMR to stop levying ADC, pending the consent of the Majilis. If Majilis had given go-ahead (by sending the issue to Majilis, and successful cooercion relaying the merits involved), then GMR could have legally obtained the right to start to billing for the airport development charge.
Instead MDP decided to put its foot down, and do things their own way. And giving consents willy nilly, so as to fast-track and do everything in the manner GMR wanted. Reducing revenue and fuel concessions to the percentages that GMR wanted. Okaying the billing of the airport development surcharge to Maldives airports company.
It was either the weakness or the bull-headed corruption of Shihab that he bended to GMR's will when he should not have. Shihab was not GMR's FInance Departments finance controller when he signed the letter of consent of ADC. He was the Maldivian Minister for Finance. And being the Minister of Finance, it was his responsibility not to give undue priveledges to an Indian company, and to protect the financial interests of the Maldivian people.
Ibrahim Shihab failed in that perspective.
In my books Ali, what Shihab did equates to corruption. And from the looks of Anti-corruption commissions decision to forward the issue for prosecution, it seems they feel the same way too.
Like you said, I may have limited knowledge about the entire details of the project. But at least i have the guts to state the obvious.
You as an individual may believe its GMR's right to bill the Maldivians for an airport they promised to build.
I however do not.
Peace.
@Gerinomoooo or whatever, at least get the name right.
Sorry dude, Mohamed Shihab.
Ali,
The GMR agreement itself is void. Naadheed signed the contract when Parliament had asked to hold the contract ? Why did Nasheed had to abolish the existing board and appointed a new board and then got them signed the contact less than 24hrs of the appointment of new board ?
There is clearly something fishy here ?
In fact Shihab had no choice but obey his master, Nasheed. That is why Shhab had to signed and agreed for the ADC charges.
The President had no authority to order any one to sign any contract which is against our constitution . Our constitution clearly mentioned that any tax can not be charged without being passed a bill by the parliament .
So does the ADC , which is a tax and this Tax can not be levied without the approval of the parliament .
This is a witch hunt by the current government against the possible presidential candidates. If President Nasheed were to be put behind bars, then Mr Mohamed Shihab is a likely Presidential Candidate from MDP. The current government wants to annihilate all possible threats to them.
Even the Indian Government has ordered GMR to stop taking ADC (US$25 from Foreigners and INR200 from Indians) from the Delhi Airport as of 1st January 2013.