Yacht Tours to take legal action over resort termination

Yacht Tours, a company owned by Maldivian Democratic Party (MDP) MP Abdulla Jabir, has said it will take the government to court over the recent termination notice it has been sent in relation to unpaid rent.

At a press briefing held today, Yacht Tours Executive Director Ibrahim Rasheed explained that the company currently owed approximately US$5 million (MVR 77 million) to the state.  According to Rasheed,  one-third of this debt was actual rent payments, while the rest amounted to fines accumulated over recent years.

“We have previously paid USD 1.5 million dollars (MVR 23 million) to the state as an advance for our island Watavarreha. Just after we made the payment, a new law was passed and it came about that this was something our company did not really have to pay,” Rasheed explained.

“But then, keeping the financial status of this nation in mind, our company did not push too hard to get reimbursed. Instead, we requested the government to use this money for rent adjustment of our other resorts,” he said.

Rasheed also gave details of the company’s official communications with the government in regard to the request it had been sent, providing the media with copies of letters exchanged between the state and the company.

Yacht Tours had requested the then Minister of Tourism, Arts and Culture, Dr Mariyam Zulfa, to arrange rent adjustment of the resorts Kudarah and Alidhoo from the Watavarreha advance, which the company said it was owed by the government.

A follow-up letter, dated August 21, 2011, stated that according to the Maldives Inland Revenue Authority (MIRA), the government owed the company US$1,115,374 (MVR 17,176,760).  At the same time, the company was said to owe a total amount of US$1,300,418 (MVR 19.9 million) in charges for the three resorts to the state.

The former tourism minister had then sent a letter on August 21, 2011 to the Ministry of Finance and Treasury, asking the rent adjustment to be processed as was requested by the company.

In a letter dated 27 September, 2011, a letter exchanged between the President’s Office and the Ministry of Finance and Treasury stated that advance money paid by a company can be used as rent adjustments for another resort or tourist business owned by the same company.

Following the transfer of power in February, Yacht Tours had again approached the Tourism Ministry to settle the matter of rent. On 22 February 2012, Yacht Tours wrote to current Tourism Minister Ahmed Adheeb, once again detailing the issue and asking for rent adjustment.

According to the company, Adheeb has failed to respond to the letter.

At a press conference on held December 31, 2012, Adheeb said that Yacht Tours had been sent the termination notices for both the Alidhoo and Kudarah resorts, with a seven day period for handover.

He added that while the ministry had come to a payment system agreement with a number of other companies, Yacht Tours had sent no official written communication in regard to the payment of outstanding rents.

In response, Rasheed claimed he was deeply concerned about the comments, accusing the minister of making a false statement.

“We wrote to the ministry just after he was appointed. We still haven’t received a response to the letter sent back in February. We have also met him officially at a number of instances to discuss this matter. The last time, right after the termination notices were sent in late November, I personally went with Jabir to a meeting with the minister to discuss this issue. At the time, the Minister had said that he was working on it, to arrange rent adjustment,” Rasheed said.

“We are very saddened that the minister has gone and said there are no communications between Yacht Tours and the ministry.  If, let’s say, the current government considers all the letters we have exchanged with the previous governments to be void, then we should be notified of that. Makes me wonder if Adheeb thinks he is the first minister of tourism of the country. With the current actions in mind, it is hard to see Adheeb as a capable minister,” he added.

Yacht Tours Managing Director Ibrahim Shiham spoke about the huge loss the company was facing due to the government’s actions.

“Many of the bookings are getting cancelled. We are also experiencing delays from business partners and financiers. Foreign investors are very concerned about the government’s actions. The market value of the islands are at US$100 million (MVR 1.5 billion) now. And they are trying to terminate this over a value of US$5 million (MVR 77 million).

“Our wish is to settle the matter through dialogue, but now that we have been given seven days to handover the resorts, our legal team will respond to it. We will be taking the matter to court,” Shiham said.

Yacht Tours Chief Executive Officer (CEO) Mohamed Zuhair expressed concerns over the state’s treatment of companies in the tourism industry.

“It goes without saying that all companies in this same industry must be treated equitably and fairly. However, we deeply regret to say that today it is not how things are been carried on. Yacht Tours is not given the same treatment as other companies in the industry,” Zuhair said.

The company furthermore pointed out the silence on the matter of tourism related bodies like MATI and MATATO to be very concerning.

Minister of Tourism Ahmed Adheeb was not responding to calls at the time of press.

Abdulla Jabir is currently not in the country.  Jabir had recently rejoined the MDP from the government-aligned Jumhoree Party (JP).

Last month, staff at Alidhoo Resort alleged both Maldivian and foreign workers had not received pay for several months, despite complaints made to management and various external government organisations.  Minivan News understands some of these payments had since been made by the company.


Government issues ‘last chance’ rent payment notices to resorts owned by political opponents

The Ministry of Tourism on has issued notices to five resorts warning that their lease agreements could potentially be terminated if the rent owed to the state is not paid.

Minister of Tourism Ahmed Adheeb told local newspaper Haveeru that rents paid by resorts constituted a large portion of national income, and said that only a few of the country’s 104 resorts were paying rent inconsistently.

This inconsistency, Adheeb said, was reflected in the national income and that therefore his ministry was giving these resorts one month to pay their dues or face being shut down by the government.

The resorts include Filitheyo Island Resort and Medhufushi Island Resort, both owned by AAA Hotels and Resorts, a family business owned by opposition Maldivian Democratic Party MP Ahmed Hamza.

Zitahli Resorts and Spa Kuda-Funafaru, Kudarah Island resort and Alidhoo Island resort – owned by Yacht Tours Maldives and J Hotels and Resorts – both companies owned by government-aligned Jumhoree Party (JP) MP Abdulla Jabir, were also issued notices.

Jabir – the deputy leader of the JP – this week turned on the government  following his arrest last week while on the inhabited island of Hodaidhoo, along with another fellow MP and senior opposition politicians.

The other arrestees were MDP MP Hamid Abdul Ghafoor – also the party’s international spokesperson – along with former SAARC Secretary General and Special Envoy to the former President, Ibrahim Hussain Zaki, former Press Secretary Mohamed Zuhair and his wife Mariyam Faiz.

Police claimed they found large amounts of “suspected” drugs and alcohol upon searching the island with a court warrant. The arrests were made “based on information received by police intelligence,” police said.

The Tourism Minister meanwhile told Haveeru that the government could “immediately terminate” the lease agreements and take back the resorts if rents and fines for non-payment of rent were not paid, but had instead chose to be lenient on the issue and give the resorts 30 days to pay up.

Adhee added that the government would terminate the lease agreements and reclaim the islands if the rent was not paid during the time period.

“This decision is to those resorts which are currently under operation. Not those that are already being developed. Now we have sent the final notice and the resort owners should decide on paying the rent,” he said.

The Minister claimed the government would terminate the contracts in such a way as to avoid affecting tourists currently staying in the resorts, or the employees working there.

“Politically motivated” – MP Abdulla Jabir

Speaking to Minivan News, Jabir blasted the government claiming the motive behind sudden issuance of the “warning notice” was “purely political” and intending to influence the re-submitted amendment to parliamentary regulations to conduct impeachment votes via secret ballot.

Three days ago a similar amendment initiated by the opposition MDP MP Ahmed Shifaz was defeated in the parliament floor by 34 to 39 votes. However, MDP MP Ibrahim ‘Bondey’ Rasheed has again re-submitted the amendment to Parliament’s Privileges Committee.

“I have only heard about this from the media. I have tried contacting the tourism minister since last night but he had been ignoring my calls. Because of the interview he gave to media, now tour operators are cancelling  bookings and the staff are not satisfied to continue working in the resorts,” Jabir said.

Jabir claimed that he had paid a settlement of US$2 million in rent during former President Mohamed Nasheed’s administration, which was “agreed as a settlement” for the rent of two islands.

However, Jabir claimed that the current government had chosen not to honour the agreement which resulted in continued addition of fines for non-payment of rent, that now stood at about US$4 million.

“I know following the recent political developments and due to my new opposition to the current government, [President] Waheed has now ordered the tourism minister to issue the repayment notice so to threaten his political opponents,” declared Jabir.

“This is highly politically motivated. He knew I was the one behind the submitting of the amendment to parliamentary regulations to make the impeachment vote a secret ballot. It was I who in the first place drafted that amendment and gave it to MP Ahmed Amir. They know this but I will still continue to work for that,” he explained.

“Will do everything to inform international investors what the President is doing” : Jabir

Jabir said he had known for a long time that President Waheed had “the desire to operate a resort” and desperately wanted “to give a resort or two to one of his children”.

“Now I have decided to hand over the resorts, and I am trying to do the formalities in front of the media. But how can I even do that if tourism minister does not have the courage to answer his mobile phone?”

The JP MP questioned why it was that resorts belonging to opposition politicians were being “targeted” while there were many other resorts which had failed to pay rent.

“What I am saying is very clear. If you want to take the resorts, fine take them. But I promise that I will make sure that Waheed’s ‘scorched-earth politics’ and his failed economic policy is informed to all international investors. Who would really want to invest in a country ruled by such a government?” Jabir questioned.

“Even in the US where the economy is failing, the government takes steps to help  businesses. But here it is the other way around. Owners and young businessmen are being beaten and forced to eat sand,” he said, referring to his earlier allegations of torture during the arrest in Hodaidhoo island.

Jabir stated that he was planning to sue the government for the “damages” he incurred following the decision.

“This notice has already costed me in millions,” he claimed.

MDP MP Ahmed Hamza was not available for a comment at time of press.

Statistics from the Maldives Inland Revenue Authority (MIRA) suggest that more than eight resorts are failing to pay rent, and the government is owed US$25 million.

According to Haveeru, Alidhoo Island Resort – operated by Yacht Tours Maldives owes the government a sum of US$4.7 million while Medhufushi Island Resort operated by J Hotels and Resorts owes the government US$ 5.9 million.

Meanwhile Filitheyo Island Resort owes the government a sum of US$ 5.2 million as both land rent and lease while Zithali Resorts and Spa Kuda-Funafaru owes US$395,859.