Tag: acc

MIFCO denies reducing staff allowances, ACC investigates fraudulent US$1 million transaction

The chairman of Maldives Industrial Fisheries Corporation (MIFCO) has denied rumours the company is to reduce staff allowances, while the Anti-Corruption Commission (ACC) has launched an investigation after US$1 million receivable to MIFCO was transferred to an incorrect bank account.

Speaking to Haveeru, MIFCO board Chairman Hassan Rasheed said the recent merging of the two state-owned fisheries companies with MIFCO had brought the need to “synchronise” the allowances as the employees were being paid differently at the two companies.

Kooddoo Fisheries and Felivaru Fisheries were brought under the management of MIFCO in September this year after having been separated into independent entities during former President Mohamed Nasheed’s administration.

“The staff allowances were not the same in the three companies,” said Rasheed. “While attendance allowance is provided not for staff in one company, the other provides attendance allowance, thus bringing about the need to synchronise the allowances.”

Meanwhile, the ACC and the Maldives Police Service have launched an investigation into a missing US$1 million after a company from Thailand transferred the money into an account that did not belong to MIFCO.

ACC president Hassan Luthfee told Minivan News that the commission initiated the investigation last week. Local media reported that the commission had started the investigation after rumours began circulating in the press and social media.

Speaking about the transaction, MIFCO CEO Adhlee Ismail alleged the Thai company was tricked into sending the sum to the wrong account after a group of people impersonating MIFCO contacted them via email.

“What really happened was, the buyer sent the money to a wrong account after a group of hackers impersonated MIFCO by creating an email with an extra letter to the MIFCO email. The buyer did not do the necessary background checks before transferring the money,” local media reported Adhlee as saying.

Adhlee denied MIFCO staff involvement in the fraudulent transaction while alleging that the emails were sent to Thailand from Nigeria.

According to Raajje.mv, MIFCO submitted the case to Maldives Police Service on Thursday and the company has since received US$600,000 of the missing money.


Related to this story

Kooddoo, Felivaru merged with MIFCO

MIFCO yellow fin tuna receives Friends of the Sea eco-label

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Corruption charges pile up against former NDMC heads

The Anti-Corruption Commission (ACC) has accused former National Disaster Management Center (NDMC) heads Abdulla Shahid and Mohamed Shahid of defrauding the state of MVR 250,000 (US$16,181).

The two men (unrelated) had authorised payment from the state budget for an electricity generator, after it had been donated to Haa Dhaal Kumundhoo Island by MP ‘Colonel’ Mohamed Nasheed via a private company, the ACC said.

In June 2013, police and the ACC accused the former State Minister Abdulla Shahid and former NDMC Director Mohamed Shahid of fraud involving MVR24million (US$1.55 million).

Regulations on public finance management require state bodies to obtain multiple price quotations for any purchase worth more than MVR25,000 (US$1,618). The requirement can only be bypassed in a situation of emergency.

However, Abdulla Shahid had admitted there was no emergency in Kumundhoo case, said the ACC.

According to the commission, the Finance Ministry had allocated MVR250,000 in the 2010 state budget for procurement of a second-hand generator for Kumundoo on the President’s Office’s order.

The Finance Ministry specifically ordered the NDMC to disburse funds as per public finance management regulations, the ACC said.

Instead, the NDMC deposited the funds directly to a shareholder of the company involved in donating the generator for Kumundhoo. There only communications between the NDMC and the company were regarding the payment, the ACC said.

“Investigations prove this transaction violates the Public Finance Act. [The generator] was not procured by the state, but by an MP for his constituency in his personal capacity, and investigations prove the state’s payment for [the generator] is abuse of position to benefit a third party,” the ACC said.

The ACC does not clarify the connection between MP Nasheed and the company.

Mohamed Shahid is the brother of MP and former Speaker of the People’s Majlis Abdulla Shahid.

The commission has recommended the prosecutor general file charges against Abdulla Shahid and Mohamed Shahid for abuse of position and order them to reimburse the MVR250,000 to the state.

The Maldives Police Services in February 2013 arrested Abdulla Shahid and Mohamed Shahid in a corruption case involving MVR24 million after an Auditor General’s special report revealed the NDMC had photocopied, edited and reused ‘Credit Purchase Order Forms’ used in 2005, to withdraw the MVR24 million from the centre’s budget at the Finance Ministry.

The ‘Credit Purchase Order Forms’ were originally given to the Disaster Management Centre in 2005 to withdraw cash from the Tsunami Recovery Fund.

The auditor general’s report also suggested that the finance ministry was complicit in the alleged fraud.

Police have requested the prosecutor general press charges against Abdulla Shahid, Mohamed Shahid and seven other individuals.

The ACC in March 2012 had also accused the NDMC of corruption in a 2006 housing project worth MVR18million.

In 2013, the commission began investigation in 1316 cases of corruption, and completed 620 cases. The ACC forwarded 178 cases for prosecution.

Despite increased reports of corruption, the conviction rate is very low in the Maldives.

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President’s Office calls for applications for ACC

The President’s Office is calling for new applications for the Anti Corruption Commission (ACC).

The application period opened on August 5 and will run until 3pm on Monday, August 11.

The first independent ACC’s term is to expire this year.

Applicants must be over 25 years of age, must not hold political party membership, a political position, or a civil service position, must not have committed a hadd offense in the past five years, and must not have committed any act of corruption.

If potential applicants have been convicted of another criminal offense, a period of five years must have lapsed since the end of the sentence or their pardoning.

The president will vet applicants and submit nominations to the People’s Majlis for approval.

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Transparency Maldives concerned over “stagnation of democratic consolidation”

An assessment of the effectiveness of Maldivian institutions in preventing and fighting corruption points to a “stagnation in democratic consolidation and a reversal in democratic gains,” anti-corruption NGO Transparency Maldives (TM) has said.

Institutions of the National Integrity System (NIS) – consisting of the three branches of the state, public sector agencies, and non-government actors – were evaluated on their resources and independence, mechanisms to ensure transparency, accountability and integrity, and extent to which each institution fulfilled their assigned role in preventing corruption.

The Elections Commission (EC), the Anti- Corruption Commission (ACC) and the Auditor General’s Office were ranked the strongest pillars, while political parties and civil society received the lowest scores.

“The findings show that most institutions do not fully adhere to the legal framework, meaning there is a gap between practices and mandates afforded by the law, and that oversight mechanisms are not working as intended,” TM’s Advocacy and Communications Manager Aiman Rasheed said.

Noting the erosion of the separation of powers and the judicial attempts to undermine the independence of the EC and the ACC, Aiman said he was concerned over the lack of public outcry in instances where the powers of key democratic institutions are undermined.

“What is most worrying is the culture of impunity in the Maldives. There is no outcry from civil society, meaning those who undermine democratic consolidation can get away with almost anything,” he said.

A strong and functioning NIS serves as a bulwark against corruption and as a guarantor of accountability, while a weak system harbors systemic corruption and produces a myriad of governance failures, the report said.

Politicisation

Although the 2008 constitution established a mechanism for separation of powers, the period between 2008 and 2013 saw the legislature and judiciary curbing the powers of the executive and independent institutions, the report noted.

It specifically cited an amendment to the Public Finance Act in 2010, which curtailed the powers of the executive with regard to public finance management and state assets. The revision allows an opposition-dominated parliament to prevent the exercise of governmental policy.

A Supreme Court in September 2012 also limited the ACC’s powers to halt projects or issue binding orders and injunctions, it noted.

‘The verdict has made the commission toothless. We believe the ACC must at the very least have the power to suspend actions perceived as corrupt,” Aiman said.

He also said the 16-point guideline imposed by the Supreme Court on the EC in October is a blow to the commission’s independence.

“There are questions on how much authority the commission has in making decisions on electoral processes and the conduct of elections. The events of the past cycle of elections had had a tremendous negative impact on the Election Commission’s independence,” he said.

Systemic failure

Political parties associated with powerful individuals dominate the People’s Majlis, and their self-serving political practices have constrained the legislature’s ability to function with independence, the report noted.

Although there are provisions to hold the executive in check through budget review, appointment of cabinet, and questioning ministers on policies, in practice, the extent to which the executive was held accountable depended on the level of support the president’s political party enjoyed in the Majlis.

Meanwhile, allegations of political influence within the judiciary, and concerns over the qualifications and suitability of serving judges have raised questions over the independence of the judiciary, the report said.

But key oversight institutions, such as civil society organisations and the media, lack adequate resources and the professionalism necessary to effectively influence government policy for the betterment of society, the report continued.

Systemic weakness in upholding democratic institutionalism was demonstrated by the controversial transfer of power in February 2012, the report said, arguing that former President Mohamed Nasheed’s resignation under questionable circumstances created doubts over the political system’s ability to guarantee democratic governance.

“Although the Constitution of 2008 created a democratic Constitutional Government, the traditionally transmitted undemocratic political practices are also embedded in the new politico-institutional framework, thus weakening the overall institutional framework, and leaving room for misgovernance and political malpractices,” a press statement accompanying the report said.

Recommendations

The report recommended the enforcement of a comprehensive code of conduct for MPs, political appointees, and judges, with penalties for non-compliance.

MPs and political appointees must declare their assets and business interests, and legislation that limits party cross-over in the Majlis must be established, it said.

The executive must be granted more independence in determining public spending, albeit with strong measures to ensure integrity and transparency in decision-making.

Qualification and experience requirements of judges stipulated in legislation need to be enforced and the Supreme Court must exercise greater judicial restraint in interpreting its powers, it said.

The report also called on greater powers to be granted the ACC, Police Integrity Commission, and said that financial and human resources must be provided for the efficient functioning of all political, economic and social institutions.

Read the report here

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Corruption allegations a political attempt at defamation, says Tourism Minister

Tourism Minister Ahmed Adeeb has denounced corruption allegations publicised by local media as a “political attack” aimed to defame him.

A case filed at the Anti Corruption Commission (ACC) last week alleged Adeeb abused his position of power to obtain MVR 77.1 million (US$5 million) from Maldives Ports Limited and US$1 million from Maldives Tourism Development Corporation (MTDC).

It is alleged that Adeeb subsequently loaned the funds to relatives and friends via state-owned tourism promotion company the Maldives Marketing and Public Relations Corporation (MMPRC).

The complainant claimed the MMPRC had obtained Maldivian Rufiyaa from the MPL in the guise of buying dollars with a promise to reimburse the amount four months later. However, two repayment cheques dated May 10 and 15 bounced due to insufficient funds.

The US$1 million reimbursement dated check for MTDC also bounced, they added.

Speaking to Minivan News today, Adeeb did not deny involvement in the transfer but said such transactions were routine between state owned companies in order to avoid purchasing dollars on the black market.

“The problem here is that I am being singled out and targeted,” he said, suggesting the unfair “defamation attempt” was linked to his refusal to support certain individuals for the position of speaker of the 18th People’s Majlis.

“There is absolutely no room for anyone to say that I fled with the MMPRC’s coffers,” he continued.

The minister confirmed cheques had bounced, but said the MTDC’s US$1 million had been reimbursed, while MPL had been paid one- third of the owed amount in dollars. The remaining two thirds are due in June, he added.

The ACC and the auditor general have confirmed they are investigating the case.

Suspicious transactions

Leaked documents filed at the ACC include an MMPRC letter to MPL CEO Mahdi Imad on February 24, in which the company’s Managing Director Abdulla Ziyath asked the MPL for the rufiyaa equivalent of US$5 million. The amount was to be paid back in dollars in four months through dated checks.

“Reference is made to the meeting held between the Tourism Minister Ahmed Adeeb and Maldives Ports Limited CEO Mahdi Imad,” the letter said

“An agreement is to be drafted by MPL for this transaction whose purpose is to provide foreign currency support to MPL through other government companies,” it read.

The complainant, however, questioned the justification, claiming: “The MMPRC is run on state funds, and as the company does not earn in dollars, it is highly questionable that the MPL gave the company money to buy dollars,”

MPL had also transferred rufiyaa to MMPRC at a time when the company had failed to pay dividends to the government. The company had argued it did not have money in its accounts, the complainant said.

They further alleged the MMPRC Managing Director Abdulla Ziyath personally went to MPL with the company’s seal to collect the cheques, demonstrating “the act was a planned act, for personal gain by the leaders of MPL and MMPRC.”

“When one company’s MD personally goes to receive funds from another company, it is evident this act is committed in secrecy, behind the company’s employees’ backs.”

The accuser also questioned why a company set up for tourism promotion was engaging in dollar sales. They also said it was against procedures for the MPL to release the money without any security measures.

In response, Adeeb said that as Tourism Minister he had also helped the state’s primary wholesaler State Trading Organisation (STO) obtain dollars to import goods.

He further pointed out the transactions took place between the companies via board resolutions and official letters, not through documents he had signed. He claimed the MPL needed dollars to buy equipment such as barges.

MPL’s Mahdi Imad was not responding at the time of press and an MMPRC official said Abdulla Ziyath was on leave today.

Loans to relatives

The complainant said as soon as the MMPRC obtained the money, it was transferred in two installments to a company owned by Adeeb’s friend called Millennium Capital Management without any bank checks or security procedures.

The US$1 million obtained from MTDC was loaned to a company owned by Adeeb’s father called Montillion International Pvt Ltd. Adeeb used to own majority of the shares in the company, but on becoming tourism minister in 2012, transferred all of his shares to his father Abdul Ghafoor Adam.

The complainant does not appear to have submitted any supporting evidence for the transfer of funds from MMPRC to the two companies.

When asked if the MMPRC had indeed transferred the funds to companies owned by his friends and relatives, Adeeb did not deny the claim and said he does not hold any business interests and is not a board member of any company.

“If you look at a 360 degrees, the case is very clear,” he said claiming the media was very “judgmental.”

Adeeb has previously been accused of involvement with an infamous pair of Armenian brothers linked with drug trafficking, money laundering, raids on media outlets and other serious crimes in Kenya.

Photos of the Arturs in the company of Adeeb and Minister of Defense Mohamed Nazim Maldivian ministers emerged on social media in April 2013, apparently taken during the Piston Motor Racing Challenge held on Hulhumalé between January 25 and 26.

One photo showed Artur Sargsyan next to Adeeb and Nazim, while another has him apparently starting one of the motorcycle races at the event, which was organised by the Maldivian National Defence Force (MNDF). Another image showed Sargsyan at the red carpet opening for the Olympus Cinema.

Adeeb acknowledged meeting the brothers during the event, but said he had no personal links with them, saying the brothers had come to see him over a business dispute with members of the opposition Maldivian Democratic Party (MDP).

He had asked the brothers to leave “for the good of the country.”

However, letter from the Tourism Ministry to immigration authorities requesting a residency visa for Margaryan and Sargayan Artur – dated January 27 and signed by Adeeb – was subsequently leaked on social media.

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Family Court slams corruption investigators for disrespectful behavior

The Family Court has slammed a corruption investigator who was denied entry to the court on May 15 for disrespectful behavior, local media have reported.

In a letter to the Anti Corruption Commission (ACC), the Family Court said the actions of the commission’s investigators were “not that expected in a court of law” and denounced false media reports that the court had verbally abused and thrown out the investigators.

ACC President Hassan Luthfy told local media last week he was saddened by the court’s refusal to provide information and had denied two investigators entry and access to information despite warrants by the commission.

The court further said it has provided the requested information previously and would hand over the information again if a “clear” request was made.

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Family Court throws out corruption investigators

The Family Court has thrown out two investigators from the Anti Corruption Commission (ACC).

ACC President Hassan Luthfee told local media the two investigators had gone to the court last Thursday (May 15) with a warrant from the commission but court officials refused them entry.

“We have faced this issue with [government] offices before. It is very concerning that this is happening in the judiciary or the courts,” Luthfee told newspaper Haveeru.

The ACC will continue with its legal obligations despite challenges, he added.

A Family Court official denied the allegations, but declined to comment on the matter further. Local media have said this is the second time the ACC has been denied access to the Family Court.

In December, Luthfy said government companies passed board resolutions to prevent the ACC from accessing information. He then urged the government to pass an anti-corruption bill stating that the biggest obstacle to the fight against corruption was lack of laws on the issue.

The ACC currently relies on the outdated law on Prevention and Prohibition of Corruption passed in 2000 under former President Maumoon Abdul Gayoom.

The commission’s ability to prevent state institutions from proceeding with questionable agreements has also been hampered by a Supreme Court verdict in September 2013.

The ruling said the ACC did not have the legal authority to stop the Department of Immigration and Emigration from signing a contract with Malaysian mobile security firm Nexbis in 2010, to establish a border control system (BCS).

Recently, the Malé City Council cited the ruling in its refusal to abide by the ACC’s instruction to cancel a contract on holding a night market in the capital.

Meanwhile. President Abdulla Yameen last week urged the ACC to expedite investigations involving infrastructure projects worth “hundreds of millions of rufiyaa” claiming the government is facing losses due to delays.

The ACC told the state broadcaster at the time that the commission has always endeavoured to complete investigations as quickly as possible in order to avoid losses to the public and the government.

The commission noted that recurring problems hindering investigations included having to provide a legally-mandated period for accused parties to respond to allegations after seeking legal counsel, as well as difficulties in obtaining relevant documents from state institutions.

According to a survey published by advocacy NGO Transparency Maldives in December, 83 percent of people surveyed felt corruption had increased or stayed the same during the past two years.

The Majlis topped the Global Corruption Barometer (GCB) survey with 60 percent feeling it to be ‘extremely corrupt’, followed by political parties at 57 percent, the judiciary at 55 percent and the police at 34 percent.

A recent survey on public attitudes towards democracy also found 46 percent of the public have no confidence in the courts. Only 20 percent reported a great deal of confidence in the courts.

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MACL can sue former chairman over GMR airport charge decision, says Civil Court

The Civil Court has ruled the Maldives Airports Company (MACL) can sue its former chairman for allowing the disputed Airport Development Charge (ADC) to be deducted from Indian infrastructure giant GMR’s concession payments during it’s ill-fated agreement.

MACL alleges ‘Kuda Bandhey’ Ibrahim Saleem’s decision to be an act of ‘Ultra Vires’ – meaning that Saleem had acted beyond his permitted authority.

The ruling came following a procedural issue taken by Saleem said he was being wrongfully charged claiming the lawsuit was filed in violation to Article 18 (c) of the Contract Act and Article 74 Company Act.

The Contract Act states a clause requiring a party to refer to arbitration any dispute arising from the contract shall be valid, while the Company Act says the court has a right to issue orders holding personally liable the directors of the company to commit an offense in the name of the company.

But the Civil Court ruling stated that the Company Act does not prohibit the company chairman from being sued personally.

The airports company sued Saleem after he signed a letter sent to GMR on January 5 2012 stating that the ADC and the insurance surcharge fee had been deducted from GMR’s concession payments.

In late 2011, the then-opposition Dhivehi Qaumee Party (DQP) had filed a successful Civil Court case blocking GMR from charging US$25 charge for outgoing passengers – stipulated in its agreement with the government – on the grounds that it was a tax not authorised by parliament.

Former President Mohamed Nasheed’s administration subsequently chose to honour the original contract, instructing GMR to deduct the ADC revenues from the concession fees due to the state-owned MACL while it sought to appeal the Civil Court ruling.

However, with the Nasheed’s controversial resignation coming just one month later, the opposition soon inherited the contractual problem.

Dr Mohamed Waheed’s government then received a succession of bills from the airport developer throughout 2012, despite its insistence that the January 5 letter from MACL outlining the new arrangement was no longer valid.

In December 2012, the Anti-Corruption Commission (ACC) filed a case with the Prosecutor General’s Office over Saleem’s decision to allow GMR to deduct the ADC from concession fees owed to the state.

As part of the filed case (Dhivehi), the ACC was seeking reimbursement of MVR 353.8 million (US$22.9 million) from Saleem and former Finance Minister Mohamed Shihab over the alleged misuse of authority it claimed had led to significant financial loses for the state.

These losses were used as justification for the contract’s eventual termination in December 2012, for which GMR is currently seeking compensation via a Singapore court of arbitration.

According to the case filed by the ACC, former Finance Minister Shihab stands accused of misusing his ministerial authority to benefit a third party by allowing GMR to deduct the charges between October 2011 and September 2012.

The ACC has also accused Saleem violating the company’s rules. According to the ACC’s case, normal procedure for MACL would be to have the company’s board of directors pass a resolution allowing for consent to be given to deduct the ADC.

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Malé night market to continue despite alleged corruption

The Malé night market will continue despite the Anti Corruption Commission’s (ACC) instruction not to continue with the deal, the Malé City Council has said.

Deputy Mayor Shifa Mohamed told Minivan News their legal advisors had told them that the ACC does not have the authority stop the agreement with GoMedia from going ahead.

“They asked us to stop certain things, but it has to be finalised from the court,” Shifa said.

“So according to legal officers the Supreme Court has taken a role in saying the ACC is not a place to stop any projects,” she stated.

Shifa referred to a Supreme Court verdict in September 2013 in which the apex court said the ACC does not have the authority to stop a contract between the Maldives government and a Malaysian mobile security firm Nexbis to establish a border control system.

The ACC is consequently planning to take legal action against the Council and GoMedia.

Speaking to Vnews, ACC President Hassan Luthufee said that the Go Media agreement should not be followed by any means and that the agreement’s maintenance was a direct attempt to abet a criminal offense.

“We have forwarded the Go Media case to PG (Prosecutor General) Office for prosecution. If the present Malé City Council members are speaking with this intent, we have to investigate and prosecute them as well,” Luthufee said.

Council disputes corruption allegations

The ACC had stated that the agreement made between Malé City Council and Go Media was compiled in manner that favored some parties and paved way for possible corruption.

However, Shifa yesterday stated that investigations into corruption had not been carried out sufficiently, and questioned the thoroughness of the ACC’s research.

“The Major has sent letter telling [ACC] to redo the whole investigation,” revealed Shifa.

“When the ACC started looking there was one single letter, by a single councilor. The ACC have not really gone into depth,” she added. “They need to check all the documents.”

The arrangements for the market are well underway with many of the stalls already let out to traders, and stopping the plans now could damage many small business owners, Shifa said.

GoMedia has rented out 450 stalls and three canteens at the rate of MVR 4000 (US$ 259) each.

“Small business have already bought tables,” she explained, “we should not disappoint them. We have to consider the fact that agreement was signed.”

“The ACC’s main responsibility is to check if the project is going on properly,” Shifa continued.

She explained that any grievances the ACC may have should be put forth to the Prosecutor General.

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