President Abdulla Yameen has asked the Anti-Corruption Commission (ACC) to investigate the alleged US$800 million oil fraud conducted by the State Trading Organisation (STO) during his chairmanship.
Speaking at a celebratory function held by the Progressive Party of the Maldives (PPM) on Wednesday night, local media reported Yameen as stating “Why not investigate the case? I want the allegations against me investigated while I’m president. We won’t try to cover up anything.”
The allegations first surfaced in an Indian magazine article, which alleged Yameen was “the kingpin” of a scheme to buy subsidised oil through the State Trading Organisation’s branch in Singapore and sell it on at a premium through an entity called ‘Mocom Trading’ to the Burmese military junta.
The article drew on an investigation report by international accountancy firm Grant Thorton, commissioned by Nasheed’s government in March 2010 to investigate the oil sales after it obtained three hard drives full of financial information detailing transactions from 2002 to 2008. No digital data was available before 2002, and the paper trail was described as hazy”.
Yameen has previously acknowledged the trade but has disputed its illegality, describing the allegations as attempts at “political blackmail.”
“Myanmar, Vietnam, the STO is an entrepreneurial trade organisation. It trades [commodities like] oil, cement, sugar, rice to places in need. It’s perfectly legitimate. I was a perfectly clean minister while in Gayoom’s cabinet. They have nothing on me,” he told Minivan News following the publication of the Indian article.
“The truth is, towards the end of Nasheed’s government, the company that investigated the case had filed it to Singapore Appeal Court,” he told the PPM gathering last night.
“The case had been withdrawn from the court during Nasheed’s presidency, as requested by Nasheed, because there was nothing more to be investigated, no way forward. But until now, the government has not received any document that belongs to the company, that carries the company’s stamp. I went to Singapore twice and met with the lawyers,” the new president said.
Government pays penalty fees to halt investigation
In September this year the Finance Ministry confirmed the government had paid millions of dollars in contractual penalty fees to Grant Thornton, after last year terminating its contract to recover assets allegedly stolen during the 30 year regime of Yameen’s half-brother, former President 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.
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 on May 22, June 27 and July 17.