The Supreme Court has disqualified former ruling Maldivian Democratic Party (MDP) MP Mohamed Musthafa over a decreed debt which the court concluded makes him constitutionally ineligible to remain in the seat.
Monday’s ruling came following the case filed against Musthafa in July 2009 by opposition Progressive Party of Maldives (PPM) Vice President Umar Naseer, shortly after Musthafa won the election for Thimarafushi constituency against former President Maumoon Abdul Gayoom’s son, Gassan Maumoon.
Umar Naseer contended that Musthafa had not still this date repaid a loan of US$31,231.66 (Rf481,952) borrowed from the Bank of Credit and Commerce International (BCCI) according to the court order and therefore must be removed from Parliament for the violation of article 73(c)1.
According to the article 73(c) 1, “person shall be disqualified from election as, a member of the People’s Majlis, or a member of the People’s Majlis immediately becomes disqualified, if he: 1. has a decreed debt which is not being paid as provided in the judgement.”
The verdict came following a bench opinion which had an interesting split between the seven residing judges of the apex court, where four were in favour of removing Musthafa from the post as they deemed he was responsible for the decreed debt while the three remaining judges shared different views.
Two judges, including the Chief of Justice Ahmed Faiz concluded that it cannot be ruled Musthafa had a decreed debt as the loan had been taken on the name of Musthafa’s company Seafood and Trade International and added that in August 1997 the lower court had ordered the “company” to repay the loan.
Judge Muathasim Adnan meanwhile said that Musthafa and his company are two different legal entities and said the company’s decreed loan cannot be attributed to Musthfafa until a corporate veil is lifted.
Corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders.
Following the ruling, former Attorney General Husnu Suood tweeted that the Supreme Court’s decision is “wrong”. He shared the view of Judge Adnan: “I think the debt is not his, but his company’s which in technical terms a separate legal person.”
Meanwhile, speaking at the MDP rally tonight Musthafa had dismissed the ruling as “unjust and politically motivated”.
He also vowed for a comeback announcing that he will contest for the same seat in the next elections and win. “Only former President Mohamed Nasheed can defeat me,” he claimed.
Suood says that Musthafa can compete in the bi-election after discharging the debt.
However, Musthafa insists that he won’t repay the loan, citing deceptions from the food supplier General Meat Ltd.
Musthafa has also threatened legal action against the Maldives Monetary Authority (MMA) in November if it did not pay the US$500,000 that the Bank of Credit and Commerce International (BCCI) owed Seafood International.
Musthafa alleged that the sum was due to be paid to his company according to a 1991 London court ruling.
Citing MMA as the “live branch of BCCI in the Maldives,” Musthafa previously stated that “the debt of a dead person has to be paid by a living legal parent. If the MMA does not pay us within seven days we will sue the MMA in court and when we sue, we will ask the court to take the amount of money for the loss we have had for the past 20 years as a cause of not having this money.’’
The Supreme Court was due to rule on a case against Musthafa on October 20, 2010 however proceedings were interrupted when MDP called for a nation-wide protest against the judiciary during an emergency meeting.
Speaking to Minivan News at the time, MDP MP and spokesperson for the party’s Parliamentary Group, Mohamed Shifaz, said judges had been blackmailed and that the party would protest the politicised judiciary indefinitely.
Amid the government’s attempt to reform judiciary, when Criminal Court Chief Judge Abdulla Mohamed was arrested by military on January 16, the opposition subsequently took up the protest baton and demanded the release of the judge – whose arrest set in motion the series of events that culminated into the resignation of former President Mohamed Nasheed on Febrary 7 in what he called was a coup.
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One down, more to go 🙂
I am not a fan of Mustafa, and in fact, I believe that he's among those that should not play any prominent role in MDP. He's typical of the class of politicians we want to get rid of from this country.
However, the court ruling is highly questionable. I agree with Suood that this debt is attributable to the Limited Company that Mustafa operated. The Limited Company laws in the Maldives, in common with most non-communist countries of the world is based on British company law. There is a clear separation between the liabilities of company directors, shareholders and the Company which is a separate legal entity.
Unfortunately, some of the judges sitting in our Supreme Court do not understand commercial or company law. For Mustafa, that's the end of the road, as he has no where else to take the matter to!
This sets a very dangerous precedent, which essentially makes the concept of a Limited Company in the Maldives totally useless and will have far reaching consequences!
What happened to my earlier comment?
it doesn't set any precedent because it is that nitwit who has himself previously assumed responsibility for the loan by accepting the lower court verdict to pay the loan and appealed only to cancel the interest amount of the loan.When the person himself has assumed responsibility what does the supreme court do?..Elect such a person again to parliament and he wouldnt honestly even know when he has sold off the country!..In corporate law CEO's or MD's can be held liable for the functioning of the company(because when a company fails there are the interest of alota parties and afterall the company cant go to jail) but it didnt have to go dat far because this man must have boasted he himself is responsible.
I support Mr.Ahmed bin Addu bin Suvadheeb comment. and this matter should be taken seriously seriously and disscussed with ppl who is dealing with Maldives Company ACT (if we have one) by lawyers.
so sad, I couldn't even believe this.
As per my knowledge company is a legal entity name for doing business ... This legal name can not run itself without any responsible persons... That's why company act says every company should have functional board of directors, managing director and chairman ... They should have to responsible for the debts n liabilities of the company ... Musthafa case it's very clear he should take the responsibility of the debts...
@Ahmed on Tue, 21st Feb 2012 1:41 AM
"That’s why company act says every company should have functional board of directors, managing director and chairman … They should have to responsible for the debts n liabilities of the company … Musthafa case it’s very clear he should take the responsibility of the debts…"
I'm afraid you do not understand how a Limited Liability Company works. The key phrase there is "Limited Liability". Go and do some research and understand what all that means.
Not all Limited Liability Companies (LLC)s require boards or chairmen. Directors are not responsible for the debts of the company. They may be liable in exceptional cases, for example, for breaking the law etc.
Let us know if you need further help.
@shahruk on Tue, 21st Feb 2012 12:42 AM
"... because it is that nitwit who has himself previously assumed responsibility for the loan by accepting the lower court verdict to pay the loan ..."
Doesn't matter. He cannot claim responsibility for something that he is not legally responsible for! If he is a moron (which is entirely possible), then the Courts should not be setting legal precedent by going outside the law!
Looks like this is a year for setting precedents...first the coup and now an unfair and unjust, infact an illegal court ruling. Looks like PPM and its allies are on a roll here, careful that these very precedents you people are setting doesn't come back to bite you guys in the back!
Well, this is just the begining of a lot more of what we are going to see with the devils back in power and ordering their clowns in the courts to carry out verdicts decided by their leaders! How very Constitutional eh!
im not talking about the legality of this. All the I know is this man is one of the biggest crooks this country ever produced. So its good to see him go. There are lots of crooks that need to go on both sides of the political divide.
"mustafaa mustafaa DON'T WORRY mustafaa
kaalam nam thoazhan mustafaa"- A.R. Rahman. Fantastic song. 😀
Welcome to the start of the Waheed dictatorship
does this mean, in Maldives, there is no such thing called a separate legal entity?? the whole concept of forming a company is creating a separate personality, independent of its shareholders. companies and separate legal entities are concepts that dates back a very long time. yet our apex court judges are either ignorant of it or are too political to grant it to Mustafaa.. i think its not right when we say we have problems in our judiciary, i think the judiciary it self is now a problem to the people.
In Maldives its a bit funny - the corporate law is very individual. DHIRAAGU disconnects and bans all its services from any or if not all of the company directors if a company has an outstanding bill. the limited liability does not apply.
@ahmed bin addu - then why dont u repay the amount if u feel so sad about that crook.
Learn more about legal matters and law before you shoot comments. You guys are bunch of idiots!!
Musthafa is someone that should be thrown away along with other idots like Raako, Gadhdhoo Zahir, Addu DRP member Latheef, Riyaz Rasheed and a bunch of others. These people staying there has done more harm than good for the country.
let us all make limited liability companies and take bank loans in company's name!...company law is with us except for poor musthafa...dont worry musthafa!
Another argument would be Musthafa did take liability of the loan, the fact that he he had no means to pay the loan does not mean it's a criminal act in itself.........
this is a weird ruling indeed.
No!! Raees Nasheed Please save MP Mustafa!! Like Gayoom you need the corrupt and unethical politicians besides you!! If ever you have some clean politicians or Technocrats, never trust them! Why? Becoz the technocrats will disagree with you when you make big blunders, the corrupt politicians will say "Raees Nasheed is the man!!" Same with Gayoom! So now I must say, Nasheed has to fight back to get Mustafa seat for him and make him make all the corrupt money! Money! Money!! Pyramid Mausoom, Need some cash?
You cant escape from the law saying "sea food' is an adjective. The judges are right in this case, Cheif Justice is dead wrong in this, shows how incompetent the guy is to understand the case, similarly the English law man Muuthasism and oath expert Areef.
OMG!
Stunningly alarming!
This, along with Nazim's case - too alarming!
If this is "one down and more to go" case, well; no comment!
But all the same, it cannot be said as justice being served to whosoever, be it Mustafa or Dhajjaal!
This is a dangerous! I am selling off all my shares in Public companies!
I am very glad that the Chief Justice voted against this decision!
clap clap clap....Great work..Its time to clear our parliament from these useless corrupt foul mouthing idiots..his threats and call for violence on MDP stage alone should be enough for the courts to relive him of his duties....BYE BYE Musthofa.
dowie on Tue, 21st Feb 2012 11:29 AM
"@ahmed bin addu – then why dont u repay the amount if u feel so sad about that crook."
I hate the guys guts as much as you do, if you care read my posts. However, I do not agree to the law being made a mockery of, by the very people who are supposed to uphold it.
"let us all make limited liability companies and take bank loans in company’s name!"
Well, first, go and find a bank that will lend your limited company ANY money. Once you find one, please come back and tell us more!
ahmed bin addu bin
“let us all make limited liability companies and take bank loans in company’s name!”
Well, first, go and find a bank that will lend your limited company ANY money. Once you find one, please come back and tell us more!
Arent you contradicting yourself?
na na naa na hey hey hey good bye
Banks in Maldives give loans to companies only when an individual in his personal capacity gives a guarantee for the loan. This is to stop companies from pleading separate legal entity argument and not pay the loan and go bankrupt.
Musthafa personally guaranteed the loan. Even though the loan was to a company.
Rasge Fern on Tue, 21st Feb 2012 9:43 PM
"Arent you contradicting yourself?"
Not at all. I assume you did not read what I wrote earlier on. I was replying to a comment made by "Jawaharlal"! I quoted his text and my reply shows how silly his argument was.
@Hakeem on Wed, 22nd Feb 2012 12:57 AM
"Banks in Maldives give loans to companies only when an individual in his personal capacity gives a guarantee for the loan."
Banks are within their rights to do that. In a country which lacks any form of sensible commercial law enforcement (most of our judges will have no clue), banks will require those kinds of guarantees.
That goes to show, how very under-developed our commercial infrastructure is and a strong commercial environment needs good legal safeguards.
Having said all of this, I still think that it's a GOOD thing that Mustafa lost his seat! The guy has been bragging about all sorts of stuff in public and private. It's high time he learnt a valuable lesson.
Ahmed bin Addu bin Suvadheeb on Wed, 22nd Feb 2012 6:13 AM
If the banks gave a moron like mustafa y woudn't it give me?...fail to understand,atleast i wil have enough brains to keep an account statement properly...banks in the country wil be running to save their skin with every1 turning judges...judgements are made on a case by case basis based on the hearings n wat is said in court..law is no joke as the people of the country are turning it into..