Health ministry audit reveals Rf11.8 million (US$761,290) fraud

A local company charged with procuring medical consumables and laboratory equipment for Malé and regional hospitals has defrauded the health ministry out of Rf 11.8 million (US$ 761, 290), an audit report has revealed.

F- Tech Solutions Pvt. Ltd doctored invoices and delivery notes and forged signatures to collect payment on goods that have not been supplied to the health ministry to this day, Auditor General Niyaz Ibrahim claimed.

The company had only supplied Rf 930, 512 (US$ 60,033) worth of medical consumables and laboratory equipment to the government, the report said.

The tender evaluation board awarded the contract to F- Tech Solutions even though the company had no prior experience in supplying medical equipment, had lied about previously supplying medical equipment to the health ministry in bidding documents, and had no import licenses or permits from the Maldives Food and Drug Authority to distribute medical supplies, the report noted.

The Rf 12.8 million (US$ 831,169) contract was awarded to F-Tech in September 2010 against the Anti Corruption Commission’s (ACC) advice at the time. The ACC had raised concerns over F-Tech’s lack of necessary licenses and permits.

According to the report, the State Minister of Finance at the time opened a Local Letter of Credit facility (LC) worth the total contract amount for F-Tech Solutions at the State Bank of India (SBI). The Auditor General said the move contravened the Maldives Finance Act which states only 15 percent of total contract value can be paid out in advance.

Further, although the contract was made between F-Tech and the health ministry, the state minister for finance authorised finance ministry staff instead of health ministry staff to sign delivery notes, the report said.

Niyaz said the state minister’s decision to establish a LC facility “opened up the opportunity” for payments to be made for unsupplied goods and “weakened the state’s internal control mechanisms.”

A Deputy Director General at the Ministry of Finance and Treasury authorised payment to F-Tech without confirming receipt of goods with the health ministry, even though SBI had noted discrepancies between the invoices and delivery notes. Nine of the 21 invoices were issued a month before the date printed on delivery notes, the report said.

Moreover, the Health Ministry did not annul the contract with F- Tech Solutions as per the agreement even though the company had failed to supply medical equipment for the period October – December 2011.

Instead, the ministry had procured the consumables itself and told F- Tech the amount would be deducted from the total payment to the company. However, no such deduction took place.

Niyaz recommends filing fraud charges against F- Tech Solutions, and filing negligence charges against the Tender Evaluation Board, and relevant Health Ministry and Finance Ministry officials. The report does not name the accused.

Niyaz has asked the police to investigate the case on April 18.

Doctored invoices

The report, published on April 19, said F – Tech Solutions had forged signatures on delivery notes and invoices claiming goods had been supplied to the health ministry. Even on the instances goods were delivered, the prices listed for goods were much higher than that pledged in the contract.

“This office notes that F- Tech Solutions forged signatures on some delivery notes and invoices. Further, the health ministry, hospitals and health centers have not received any of the goods said to have been delivered on the delivery notes. While the health ministry’s supply department has received goods noted on one invoice, the prices noted on the invoice are extraordinarily higher than prices pledged in the contract document,” the report said.

Nine of the 21 delivery notes worth Rf 5,787,272 (US$ 373, 372) were signed by a health ministry procurement officer. However, “the procurement officer in a statement to the office said the signature on the delivery notes were not his, that he had not signed the delivery notes, and that he had not claimed said medical supplies.”

Further, the procurement officer noted he was not authorized to receive medical supplies on behalf of the health ministry, and had not done so previously.

Two of the 21 delivery notes worth Rf 4, 215,642 (US$ 271, 977) were signed by a health ministry staff that did not exist in the health ministry records. However, the name matched the nickname of the ministry staff, but the staff told the Audit Office he had not signed or received goods on behalf of the ministry.

On the instances F – Tech Solutions had supplied goods, the company defrauded the ministry of Rf 1,816,793 (US$ 117, 212). The company had claimed Rf 2,368,954 (US$ 152, 836) on goods that were only worth Rf 522,161 (US$ 33,687).

The Maldives Customs Services has confirmed that F – Tech Solutions has never imported medical consumables and laboratory equipment, the report said. The goods that were supplied to the health ministry were bought on credit from a separate private company.

Further, even though F – Tech had agreed to import Rf 12.8 million (US$ 831,169) worth of goods, the import license approved to the company from the Economic Ministry was only worth Rf 500,000 (US$ 32,258).

According to local media Haveeru, F – Tech’s six directors are: Managing Director: Mohamed Abdulla, Director of Operations: Abdulla Rashid, Director of Administrations: Abdulla Shafeeg, Director of Sales and Marketing: Ahuyad Hisaan, Director of Logistics: Rilwan Shareef, and Director of Human Resources: Fathimath Shiuna.

Of the six, Haveeru notes Shareef and Shiuna are prominent former ruling Maldivian Democratic Party (MDP) activists.

The Supreme Court disqualified MP Ismail Abdul Hameed in February 2012 for authorising payment for goods before delivery while he was director at the Malé Municipalty in 2008. Hameed was sentenced to one year six months banishment.

Meanwhile, Deputy Speaker Ahmed Nazim was acquitted of four counts of fraud in February. The charges against Nazim concerned public procurement tenders of the former Atolls Ministry secured through fraudulent documents and paper companies.

MP ‘Redwave’ Ahmed Saleem was also cleared of corruption charges in February. The state has charged Saleem with the conspiracy to defraud the former Atolls Ministry in the purchase of the mosque sound systems.

In addition, the State Trading Organisation (STO) has withdrawn a a case worth more than a million US dollars lodged against Dhivehi Qaumee Party (DQP) MP Riyaz Rasheed’s Meridian Services Private limited. The case concerned an unpaid sum of money worth Rf 19,333,671.20 (US$1,253,804.88) regarding Meridian’s use of the STO’s credit facilities.


12 thoughts on “Health ministry audit reveals Rf11.8 million (US$761,290) fraud”

  1. Nasheed will be remembered as a corrupt dictator. Heavy load and mega Maldives and the list goes on ..

  2. So MDP stole 700K USD, pressured the courts release Redwave Saleem, but banished independent MP Hameed. ....... But the article seems to imply that the courts don't want to prosecute DQP Riyaz Rasheed? And that he is stealing more? Is there context to this? Or is it another piece of bias in an otherwise good article. The last four paragraphs deserve context - without bias.

  3. wow i voted anni for a change and he was as corrupt as maumoon! i think more cases of corruption scandals by the yellow regime are set to unfold. i wonder what mdp members think about this!!

  4. the unnamed state minister is Ahmed Asad (brother of former minister Aslam) and the deputy director general is Ali Arif. Both have paid these sums against invoices to Prepaid Shiuna's F Tech company. this is a serious case of negligence and malpractice on finance ministry's behalf.

  5. @anthu, here's a little insight
    This case is very different from heavy load or mega Maldives. Here we are talking about a payment made before delivery of goods. Not even an advance but whole thing.. Here's what happened in the other two cases

    Heavy load: Thilafushi corp opened the dredging contract for bid, no party responded. Majority of board members decided to go for negotiated contracts, and as so it happens Reeko moosa's heavy load gave best deal which was several millions lower than boskalis offer and several months quicker to complete than MTCC (that bid lower price than heavy load). So Thilafushi made a good business decision although highly n utterly unpopular politically, in the end they did dredge but contract did not complete as Thilafushi had funding problems as they reported bank pulled their loans upon hearing news of "perceived" corruption. Moosa was never paid the entire 21 million against popular belief, as a matter of fact he has not been paid since the advance payment and the sand dredged today on Thilafushi is probably worth more than the advance and recent lease of those lands was a massive success to that corporation. Reeko Moosa will suffer the fate in this govt. as his dredger has already been pulled out from project and now heavy load faces a dirty but eventual premature end to the contract.

    Mega Maldives: one, an entrepreneur of sort in aviation, proposed to then invest Maldives a charter flight business from china to Maldives. It so happened Ahmed mifzal, an advisor to invest Maldives and ministry of trade at the time got hold of the proposal as his dad was ambassador to china and took advantage of both their positions n leverage to secure that opportunity to set up a JV with George n mifzals family for the business to start in Maldives, today mifzal lives in uk, his sister and brother in law are executives also in the firm. Perhaps the use of position bit may sound corrupt but what the hell, if not for their pioneering effort Maldives tourism would have lost a few %s in arrivals from china.

    BUT more importantly than both Anthu,

    What do u have to say about why This govt abolished presidential commission investigating $800 m of fraud by yaamin, n judiciary's blind eyes n ears to Riyaz Rasheed, red wave saleem n jangiya Nazim. What's with that, are they not more corrupt than any of the above.

  6. Where is ACC? They are running behind immigration border , which last 2 years investigating immigration border without solid evidence trying to destroy immigration with the hand of Baaqee shahid and AG Azima .
    This company Fake invoice was done by Indian two guys , check from Police and they both agreed in Police that fake sign and everything was done by fake and nobody was sign from health Ministry.
    Did ACC found health Ministry officer was sign and the ACC investigate team talk with him??
    Did ACC investigate team check the documents ?
    ACC is courrpt and independent comission are under political umbrella..

  7. both Nasheed and Maumoon are corrupted dictators and they will be remembered always.

    why did not Anni finished USD 800 million cases when he was ruling the country for 3 years. This is because Anni knows how much money he had been taking from the Government and he will be questioned. But what he did not expect was that he could be over thrown prior expiry of his term and he thought Maumoon and his gangs will be in power when Anni is gone.

    Both Maumoon and Anni had an mutual understanding of robbing this country. Look at what rolled Maumoon played in bringing Anni ? Non of them will be able to take any actions against each other.

  8. I understand ACC is not Independent, since Naeem comment is good comment. ACC used as immigration project as political side, which ACC goes beyond their mandates which they themself are planning council and Technical and Bid and there reports written to misinformation to get public support and media coverage.

    Even before investigating everything was leak in Haveeru Media and some other media,? is this call independent commission .

    we had seen the health Ministry case was in ACC but how much they investigates and did they went according to the bid and technical and company profile.

    But Immigration project bad rumors and International company name and reputation ACC trying to destroy because they have another intrest in this project, why ACC join hands with Baaqee shahid and why now AG.. is this call independent.

  9. Does this surprise anyone? Of course not! Think about all the fraud and scandals that have not yet come out in the open. Many will never be discovered...The people in power will fill their pockets and leave the common man to rot.

  10. ACC's slogan "corruption ah magu fahi vaagothah" has been used to slay almost each and every project it sets its politically directed sight on.

    It is such a loose term that can be applied to almost anything and everything. perhaps they should firm up their investigative skills and employ more professionals in respective fields than the group of accountants and auditors they have in that incompetent organization.

  11. Maldives is more Corrupt than Somalia and Bangladesh. Thank you . Maumoon and Anni. You are a true leaders. First one was 'Father of enviroment' and Spiritual leader of religious cult. Second one was ' Mandealaa of Maldives', Campion o f Democracy and Human Right. No Country has such capable leaders.


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