The Maldivian government has reportedly been paying millions of dollars in penalty fees to forensic accountancy firm Grant Thornton, after last year terminating its contract to recover assets allegedly stolen during the 30 year regime of Maumoon Abdul Gayoom.
Under the terms of the contract, signed by the former Nasheed administration in July 2010, Grant Thornton would charge no fee for the investigation beyond costs such as flights and accommodation, instead taking a percentage of the assets recovered. At the same time, Grant Thornton was entitled to charge a penalty fee of up to US$10 million should the government terminate the investigation, such as in the event it arrived at a political deal.
One of the first acts of President Dr Mohamed Waheed’s government after 7 February 2012’s controversial transfer of power was to dissolve the Presidential Commission which had been overseeing Grant Thornton’s investigation, and terminate the agreement with the forensic accountants.
In August 2012, Attorney General Azima Shakoor issued a statement announcing that her office had received two invoices totalling US$358,000 and GBP£4.6 million from Grant Thorton, charges she claimed were for legal advice provided to Nasheed’s government.
Azima had not responded at time of press, but Finance Minister Abdulla Jihad confirmed to Minivan News last week that the government has been paying the charges, though he said he did not have the exact amounts to hand.
Minivan News understands from a source familiar with the matter that the government paid an initial GBP£1.5 million (US$2.4 million) on 24 April 2013, with the remaining amounts to be paid in monthly installments of GBP£300,000 (US$476,000) each.
According to the source, the Maldives Monetary Authority (MMA) remitted these monthly payments to Grant Thorton on May 22, June 27 and July 17.
STO and the Maldives-Burma oil trade
On 1 February 2012, a week before Nasheed’s government was toppled by opposition demonstrators and a mutinous section of the police, the Presidential Commission had forwarded a case for prosecution against Gayoom’s half-brother MP Abdulla Yameen over his alleged involvement in an oil trade of up to US$800 million with the Burmese military junta, during his time as chairman of the State Trading Organisation (STO).
“As of February 2012, Grant Thorton were ready with a criminal complaint, having obtained a number of documents relating to financial dealings from Singapore banks through court orders issued by Singapore courts,” stated Dr Ahmed Shaheed, former Foreign Minister and head of the Presidential Commission, shortly after the contract’s termination.
Yameen is contesting the presidential run-off against Nasheed on September 28. He has publicly dismissed the allegations on repeated occasions, distancing himself from the Singapore branch of the STO where the trade to Burma took place, as well as disputing any illegality in the trade.
The allegations first appeared in February 2011 in India’s The Week magazine, which described Yameen as “the kingpin” of a scheme to buy subsidised oil through STO’s branch in Singapore and sell it through a joint venture called ‘Mocom Trading’ to the Burmese military junta at a black market premium price.
That article drew heavily on a leaked draft of an investigation report by Grant Thorton, dissecting the contents of three hard drives containing financial information regarding transactions from 2002 to 2008. No digital data was available before 2002, and the paper trail was described as “hazy”.
Grilled by parliament’s National Security Committee over the matter in November 2011, Yameen denied any involvement in “micro-management” of STO subsidiary companies during his time as chairman until 2005.
Jumhooree Party vows to reopen investigation
In the lead up to the first round of the presidential election – in which the Jumhoree Party (JP) narrowly missed second place in the run-off to Yameen – JP vice presidential candidate Dr Hassan Saeed vowed to “reopen” the investigation into the STO oil case “as an issue of the highest priority.”
Dr Saeed was President Waheed’s Special Advisor at the time the Presidential Commission was dissolved, and the Grant Thornton contract terminated.
“Abdulla Yameen’s case was started under the previous government. While it was being investigated this government came into office, canceled the contract [with Grant Thornton] and paid 4.6 million pounds on the condition that it not proceed with the investigation, of which a large portion has now been paid,” Dr Saeed declared, during a press conference on August 31.
Saeed claimed that Grant Thornton attempted to communicate with Dr Waheed’s administration regarding the investigation but had received no reply. The accounting firm therefore decided that the contract was at an end and hired a debt collection agency, he revealed.
Asked by media if he had any role in terminating the contract as Waheed’s special advisor, Saeed claimed the contract was already cancelled when he became aware of it.
He further claimed that Dr Waheed was forced to reappoint STO Maldives Singapore Pvt Ltd and Maldives National Oil Company (MNOC) Managing Director Ahmed Muneez because of “pressure from Yameen.”
“Dr Waheed said he had to do it because of extreme pressure from Yameen,” Saeed said.
President Waheed, who polled 5.13 percent in the vote, has since declared he will back Yameen in the second round of the presidential election.
“I say this because in my opinion, the best path for this country cannot be the weakening of the constitutional framework, breaking the law, arson, or the creation of conflict,” Waheed said, explaining his decision to back Yameen in a statement published on the President’s Office website.