Villa Group unable to pay salaries

Opposition politician Gasim Ibrahim’s Villa Group has announced it will not be able to pay salaries of more than 4,500 employees after the government froze its accounts last week over unpaid fines.

The conglomerate – which operates businesses in shipping, import and export, retail, tourism, fishing, media, communications, transport, and education – says the government’s US$90.4million claim is unlawful and is contesting it at the civil court.

The opposition says the government is targeting Gasim’s businesses because of his split from the ruling coalition in January.

“This company’s revenue has suffered since last November. The struggle to balance the company has been brought to a halt by the government propaganda’s, blatant lies and the freezing of our accounts,” managing director Ibrahim Siyad Gasim said in a memo sent to all employees on Wednesday.

“In these difficult circumstance, employees who find it hard to work with us to rebuild the company again are advised to find other job opportunities,” he continued. “The employees who leave will be paid their outstanding salaries as soon as we find the means to pay.”

Human resource manager of Villa Shipping, Ibrahim Moosa said the memo will apply to more than 4500 employees of Villa Shipping and subsidiary companies.

“This is a very difficult situation for the company. I plead with our staff to stay with us. God willing we will overcome this situation,” he said.

A journalist from Villa TV, also owned by Gasim, said the memo does not come as a surprise.

“They put out a memo a few weeks back saying some employees might be sacked due to the circumstances. Also there was another memo issued back in November. We have not been paid April’s salary yet,” she said.

Another employee at Villa’s domestic airline Flyme said staff had been paid half of their salaries and half of a transport allowance for March.

“All of us at Flyme understand what is happening. We know that Gasim is really being squeezed financially,” he said.

Since the notice was issued, Gasim has not been seen in opposition protests or made any comments on the imprisonment of ex-president Mohamed Nasheed and ex-defence minister Mohamed Nazim.

However, JP MPs and council members are part of a new coalition formed between the main Maldivian Democratic Party, the Adhaalath Party, defectors from the ruling coalition and members of Nazim’s family.

In an appearance on Villa TV in April, Gasim said two European banks have cancelled loans worth US$80 million due to media reports of the notice.

Unfairly freezing Villa’s accounts would “impoverish thousands of citizens” and one of the largest companies in the country will “head towards bankruptcy,” he said.

The Maldives Inland Revenue Authority (MIRA) issued the US$90.4 million notice after the tourism ministry terminated agreements for several properties leased to Villa and subsidiary companies for resort development.

Some 27 cases challenging the termination of the agreements and MIRA’s notice as well as appeals of the civil court’s refusal to grant stay orders are ongoing at court.

Villa – which won the tax authority’s “Ran Laari” award last year as one of five companies that paid the highest amount to the state – insists it does not owe any money to the state.

But the civil court last month refused to issue stay orders until the conclusion of the dispute, saying the state could reimburse and compensate the company if the ongoing cases are decided in Villa’s favour.

MIRA’s notice stated that Villa owed US$75.5 million as fines, US$600,000 as interest, and US$14.8 million as unpaid rent dating back to original lease agreements signed in 2006 and 2007.

A second notice for the payment expired on April 18, but the Maldives Inland Revenue Authority (MIRA) did not freeze the company’s accounts saying the move may negatively affect the Maldivian economy, local media have said.

The JP has since accepted an offer by President Abdulla Yameen to commence talks.