Tag: 17th SAARC summit

Nasheed dismisses allegations of SAARC Summit embezzlement, acknowledges overspend: “Senior officials wanted things to get done quickly”

Maldivian Democratic Party (MDP) presidential candidate and former President Mohamed Nasheed has dismissed allegations that his government embezzled state funds to host the 17th SAARC Summit, but acknowledged that it was possible money had been spent contrary to the Public Finance Act.

The Auditor General’s report on government expenses for the 17th SAARC Summit held in Addu City and Fuvahmulah in 2011, revealed several financial discrepancies including an overspend of more than MVR 430 million (US$27.9 million) on the event’s allocated budget.

According to the report compiled through audits of expenditure by the Ministry of Housing, the Ministry of Foreign Affairs, the President’s Office and the Maldives National Defense Force (MNDF), Nasheed’s government spent MVR 667,874,870.84 (US$ 43.3 million), on the summit – 188.82 percent more than the MVR 231,240,000 (US$14.99 million) budget passed by parliament.

Speaking during a campaign rally held at Haa Dhaal Atoll Vaikaradhoo Island yesterday (July 24), the former President welcomed the audit reports on his administration and echoed his party’s position that no corruption was involved in the spending.

“Since the ratification of the 2008 constitution, and since the beginning of word to word enforcement of laws that came after the ratification, it is quite possible that there may be certain things carried out in contrast with the public finance act. This is because senior officials of the government wanted things to get done quickly,” Nasheed said.

Discrepancies highlighted in the report included financial losses incurred by the government, violations of the Public Finance Act and Public Finance Regulation and wasteful spending.

However, the opposition MDP dismissed the findings of the report describing it as “naive” and “misguided political posturing”, while also challenging its credibility and accuracy.

“It is not possible for the MDP-led government to be involved in blatant corruption. Because we came with a plan and strategy for reforms,” said MDP’s Spokesperson Hamid Abdul Ghafoor at the time.

“Looking at perspective of development and progress, we see this report as just ‘petty accusations’. The report lacked due procedure, impartiality and transparency. It may have been possibly influenced by the political vibe in the country.”

Nasheed stressed that he had not dishonored the trust that the people had placed in him, and had not embezzled “a single laari” from the state budget.

The audit report on the SAARC Summit was released during the MDP’s campaigning ahead of the upcoming 2013 election.

Previous reports

A similar wave of audit reports were released shortly before the 2008 presidential elections, revealing the extravagant spending of then President Maumoon Abdul Gayoom – who now heads the Progressive Party of Maldives (PPM), claiming for presidency in September.

In April 2009, former Auditor General Ibrahim Naeem – the country’s first independent auditor general, who was appointed by Gayoom in January 2008 – released a damning audit report (English) of the presidential palace’s finances, revealing that over US$3 million earmarked for helping the poor was spent on “the president’s relatives, ministers and their families, senior government officials and some MPs.”

More than SGD$2.3 million (US$1,500,000) was spent on one of Gayoom’s relatives and his family on trips to Singapore throughout 2007 and SGD$ 1.4 million (US$930,000) for another relative and his family for multiple trips to Singapore.

In March 2008, SGD$23,756 (US$16,000) was spent for a minister’s grandson to stay in a hotel in Singapore for 21 days; in April, SGD$50,022 (US$33,000) was spent on medical expenses for a friend of the president; and in July 2008, SGD$6,905 (US$4,600) was spent on two pairs of glasses for a minister and his wife.

In October 2012, Dhivehi Rayyithunge Party (DRP) MP Rozaina Adam leaked invoices and bills of the spending through the social media, which revealed extravagant expenses of former President Gayoom’s family out of the former presidential palace Theemuge’s budget allocated for helping the poor.

Among the spending included, money spent on trouser materials, jewellery and expensive family stays at luxurious hotels and resorts abroad.

An invoice dated March 31, 2008 showed SG$ 14,977 spent for trouser material (polyester viscose), which was authorised and signed by former Executive Director of the Presidential Palace Ismail Faiz.

On December 20, 2006, a purple gold diamond pendant for SGD$824 and purple gold diamond bracelet for SGD$1,510 were bought using Nasreena’s credit card. Another invoice showed over SGD$28,000 paid out of the Theemuge account to the Grand Hyatt in Singapore.

Moreover, an average of MVR 5,500 (US$430) a day was spent on food for the former President and his family – equivalent to one month’s wages for an employee working in the palace at the time.

So far no action has been taken against any of the embezzlement allegations.

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SAARC Summit ran US$28 million over budget: Auditor General

The Auditor General’s report on government expenses for the 17th SAARC Summit held in Addu City and Fuvahmulah in 2010 has revealed several financial discrepancies including an overspend of more than MVR 430 million (US$27.9 million) on the event’s allocated budget.

According to the report (Dhivehi), former President Mohamed Nasheed’s government spent MVR 667,874,870.84 (US$ 43.3 million), on the summit – 188.82 percent more than the MVR 231,240,000 (US$14.99 million) budget passed by parliament.

The report was compiled through audits of expenditure by the Ministry of Housing, the Ministry of Foreign Affairs, the President’s Office and the Maldives National Defense Force (MNDF).

The report also made several recommendations including the recovery of money spent, as well as action against those found responsible for the expenses.

The release of the report comes at a time when former President Nasheed – who headed the Maldivian delegation at the summit – is campaigning for a second term in the upcoming 2013 election as the opposition Maldivian Democratic Party (MDP) presidential candidate.

More than a year after the summit, Nasheed was ousted from government in what his party described as a “bloodless coup d’état”, amid a mutiny by sections of the police and military. His controversial resignation followed weeks of anti-government protests that began in January 2012 after the detention of the Chief Judge of Criminal Court Abdulla Mohamed over allegations he posed a threat to national security.

Progressive Party of Maldives (PPM) presidential candidate Abdulla Yameen Abdul Gayoom condemned the financial discrepancies highlighted in the report, prior to its release.

Discrepancies

“Until the end of March 2013, excluding the grant aid and projects, a sum of MVR 667,874,870.84 (US$43.3 million) was spent. This figure is MVR 436,634,870 (US$ 28.5 million) or 188.82 percent more than the budget passed by the parliament to conduct the SAARC summit. The figure that was passed by parliament was MVR 231,240,000. No parliamentary consent as required by Article 96(c) of the constitution was obtained in spending the sum,” read the Auditor General’s report.

Other discrepancies pointed out in the report included an additional MVR 61.8 million (US$4 million) being paid for the construction of the Equatorial Convention Centre built for the summit.

The report stated that the initial cost of the project proposed by the contractor Ameen Construction Private Limited stood at MVR 210.4 million (US$13.7 million). However, after negotiations and changes to the materials being used and the overall design of the structure, a figure of MVR 150 million (US$9.7 million) was agreed between the contractor and the Ministry of Housing and Environment.

“However, due to changes brought to the plan by the government, the cost of completing the convention centre stood at MVR 211,852,834.84 (US$13.8 million). [This was] MVR 61,852,834.84 (US$4 million) or 41 percent excess of the amount that was agreed,” the report claimed.

The report noted the cost, which was more than the initial proposition from contractor, resulted from failure in properly planning the project and frequent changes brought to the agreed design in a non ad-hoc manner.

Apart from the costs, due to a delay in depositing the advance guarantee, the government claimed that the SAARC Convention centre needed to be built as quickly as possible, an advance payment of MVR 30 million (US$ 1.9 million) was paid to the contractor. The report added that the advance guarantee, which included both the advance payment and performance guarantee, had not been deposited.

The advance payment of MVR 30 million was given by the government after converting the retention money taken from the same contractor on a different government contract as the payment guarantee of the convention centre project.

This conversion, the report said, could be perceived as an attempt by the government to financially support a specific party contravening existing laws, since other companies who had proposed their bid did not have any retention money owed by the government and could not therefore enjoy the same privileges.

The Auditor General’s findings said that the advance MVR 30 million payment was made in contrast to section 8.23 of Public Finance Regulation, which states that any such advance payment should not exceed 15 percent of total costs. The MVR 30 million advance stands at around 20 percent of the cost, the report added.

Other discrepancies highlighted in the report included financial losses incurred by the government, violations of Public Finance Act and Public Finance Regulation and wasteful spending.

MDP response

Former ruling party MDP Spokesperson Hamid Abdul Ghafoor described the report as “naive” and “misguided political posturing”, while challenging its credibility.

“What we are saying is that after an audit report is released, the litigation based on the findings must begin as soon as possible. The longer time between the release of the report and start of litigation means such reports are open for political manipulation,” he said.

Ghafoor claimed that MDP came out to reform the country, which included fighting against corruption.

“It is not possible for the MDP-led government to be involved in blatant corruption. Because we came with a plan and strategy for reforms,” Ghafoor contended.

He also said that the public will judge the audit reports and will know how politically motivated the report is.

“Looking at perspective of development and progress, we see this report as just ‘petty accusations’. The report lacked due procedure, impartiality and transparency. It may have been possibly influenced by the political vibe in the country,” Ghafoor alleged.

Auditor General Niyaz Ibrahim meanwhile disputed in local media that the timing of the audit report before the election was political, stating that information contained in such reports was necessary for people to make informed decisions.

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Official SAARC summit website launched

The official website of the upcoming 17th SAARC (South Asian Association for Regional Cooperation) summit was launched this week by Special Envoy of the President Ibrahim Hussein Zaki.

Speaking at the launching ceremony at the Foreign Ministry, Zaki, who was the first Maldivian secretary-general of SAARC, said that the website would be an important tool for free flow of information from organisers to delegates and participants.

As well as in-depth information about the summit, the website features information about Addu City and interactive services for delegates and the media.

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