Tag: audit report

Millions in environmental fines owed to government

The government is owed at least MVR45 million (US$2.9 million) in unpaid fines for environmental damage, an official audit has revealed.

The owner of a Thai fishing vessel that ran aground on the reef near Shangri-La Villigili Island Resort in November 2011 has failed to pay an MVR42.1 million (US$2.7 million) fine, according to the audit report of the then-Ministry of Housing and Environment for 2011.

The State Electricity Company (STELCO) still owes R3.3 million (US$214,000) following an oil spill in which a pipe buried under Malé’s ring road Boduthakurufaanumagu burst in March 2011, the report said.

The pipe leaked large quantities of oil into the track swimming area, frequented by schoolchildren and the public.

normal_Emerald_Reefer,Pan,19960501,ROTThe Thai fishing vessel, Emerald Reefer, was meanwhile beached for two months in the Muli Kolhu reef. The Environment Protection Agency (EPA) said at the time that the reef was “destroyed” and was unlikely to recover in the near future.

Under environmental regulations, the boat’s owner was given 25 days to remove the boat before incurring a fine of RF700,000 (US$45,000) per day that the boat remained grounded.

EPA Director General Ibrahim Naeem told Minivan News today that both fines have not been collected to date, adding that the agency was coordinating with the relevant authorities.

The Emerald Reefer fine was “pending” due to legal issues, he said.

“Those are the just the fines from 2011. There are lot more fines that haven’t been collected,” he said.

The audit office meanwhile recommended taking action in accordance with public finance regulations to collect the outstanding fines.

The fines were imposed during the final months of the administration of former President Mohamed Nasheed, who resigned in February 2012, later saying he had done so under duress in what amounted to a coup.

In 2012, the then-President Dr Mohamed Waheed shifted the departments dealing with the environment – including the EPA – to the newly formed Ministry of Environment and Energy.

Among other cases highlighted in the report, the auditor general noted that the ministry spent nearly MVR70 million (US$4.5 million) for three infrastructure projects despite the funds not being allocated in the 2011 budget.

The projects involved installing revetments in Shaviyani Feevah, road construction in Haa Dhaal Kulhudhufushi, and harbour construction for three islands in Addu City.

The ministry also paid a 30 percent advance payment to the contractor in the road construction project in violation of public finance regulations, the report said.

Aside from the flagged issues, the report stated that the ministry’s expenses in 2011 were legal and in line with public finance laws as well as the budget approved by parliament.

The new auditor general – appointed under controversial circumstances in November – has yet to release any reports on ministries under the current administration or the Waheed administration.

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Tourism Minister implicated in US$6million corruption scandal

An audit report has implicated Tourism Minister Ahmed Adeeb in a corruption scandal involving US$6million, a day after ruling Progressive Party of the Maldives (PPM) amended the Audit Law to reappoint the Auditor General (AG).

AG Niyaz Ibrahim, in today’s special audit report, said the Maldives Marketing and Public Relations Company (MMPRC) obtained a US$1million loan from Maldives Tourism Development Corporation in the guise of making an urgent payment to a foreign party and subsequently loaned the money to a company owned by Adeeb’s father.

Adeeb owned a 35 percent share in Montillion International Private Ltd, but transferred his shares to his father in March 2012 when he assumed the post of Tourism Minister.

The company only made MVR 70,100 in 2011 through trade, but in the period between 2012 and 2014, US$ 6.8 million and MVR 3.6 million from tourism related business rolled through the company’s accounts, the report noted.

In a separate case, the MMPRC also asked the Maldives Ports Ltd (MPL) to hand over MVR 77.1million to pay the company US$5million at a later date. MPL agreed to transaction despite demonstrating no need for dollars.

MMPRC immediately transferred MVR 77.1million to a private company Millenium Capital Management Pvt Ltd. Only US$ 3 million of the pledged US$5million has been paid back. The audit report said Adeeb helped MMPRC push the deal through.

It also suggested the Tourism Ministry awarded a company owned by an Italian an island for resort development to pay back US$2.25million of the US$6million MMPRC owed to MPL and MTDC.

According to the report, Adeeb has failed to declare assets as per Article 138 of the Constitution since he took up the post of Tourism Minister.

The Tourism Ministry and Maldives Inland Revenue Authority (MIRA) refused to cooperate with the investigation, the report noted.

In a tweet Adeeb has condemned the report as politically motivated.

Channel News Maldives (CNM) broke the story of the US$6million corruption scandal in May. Its reporter Abdulla Haseen was charged with disobedience to order in August, but the Prosecutor General withdrew the charges a few weeks later.

Minivan News understands former deputy Speaker of Majlis Mohamed Nazim was involved in leaking documents to CNM. His passport was withheld last week, but Nazim left the country on the date the warrant was issued.

Millenium, Montillion, New Mood

Niyaz said MMPRC had obtained MVR77.1million from MPL and US$1million from MTDC to provide illegal loans to private companies.

Although MPL approved the MVR 77.1million payment in exchange for US$5 million, the company had no need of dollars and the transaction was made on MMPRC’s initiation, not MPL’s.

Further, MPL’s 2014 budget shows it required only US$2.2million for machinery in 2014, but the bidding process had not been opened at the time of transaction. MPL also had US$800,000 in treasury bonds and a large amount of dollars in its accounts.

Moreover, MMPRC is not authorized to engage in dollar trade and does not have the capacity to buy or sell US$5 million, as its working capital at the end of 2013 stood at US$4.5million and assets were only worth MVR 324,485.

MPL authorized the “risky” transfer after MMPRC issued two dated checks. When MMPRC failed to make its second payment of US$2.5 million on July 8, the agreement was amended to allow the company to pay back the money by December 1. The report said the amendment was made because Millennium failed to repay MMPRC on time.

In the second case, MMPRC on April 9 asked MTDC for an urgent loan of US$1million to make an urgent payment to a foreign party for tourism promotion. The loan was to be paid back by May 15.

The money was transferred to Adeeb’s father’s company Montillion on April 15.

But MMPRC made no payment to any foreign party in the period. The loan was paid back by New Mood Resort Pvt Ltd, which was given Dhaalu Atoll Maagau Island, at a head lease rent of US$2.25 million.

Toursim Ministry and MIRA refused to reveal details of the Maagau deal despite repeated requests, the audit report said.

Montillion is also accused of bribing a senior tourism ministry official with US$450,000 in February in a separate resort development deal.

Neither the Finance Ministry nor the MMPRC board were involved in either case. The MMPRC’s Managing Director Abdullah Ziyath personally handled all of the transactions, including picking up checks, against the company’s procedures.

Niyaz has recommended all individuals involved in the two cases be investigated for corruption and charged with abuse of power.

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ACC spent MVR3 million in excess of approved budget, reveals audit

The Anti-Corruption Commission (ACC) spent MVR3.5 million (US$226,978) in excess of the annual budget approved by parliament, the commission’s audit report for 2013 has revealed.

“The overspent amount was facilitated by a budget extension of MVR3,605,647 made to the commission by the Ministry of Finance and Treasury,” explained the report released last week.

“However, it was observed that the parliamentary approval for this budget extension was not obtained as per clause 32(e) of the Public Finance Act.”

The report noted that the ACC Act stipulates that the finance ministry should provide the commission’s budget in accordance with the annual budget passed by parliament.

As a result of “the significance of the matter”, the Auditor General’s Office concluded that the ACC’s expenditures in 2013 were not made “in all material respects, for the achievement of its objectives and for the purposes intended in the budget” and in line with public finance law.

“Extending the budget of the commission by the Ministry of Finance and Treasury without the approval of the parliament negates the objective of approving the budget of public institutions by the parliament as set out in enabling laws of the former,” the report stated.

“It also creates the risk of spending over and above the budget set for the public institutions that could consequently increase the budget deficit.”

In early August, Finance Minister Abdulla Jihad revealed that the government was facing “great difficulty in managing the budget deficit” due to shortfalls in anticipated revenue.

The ballooning budget deficit – which Jihad warned could reach MVR4 million (US$260,000) or 10.6 percent of GDP – could affect the government’s ability to pay civil servants, the finance minister had said.

A budget deficit of MVR1.3 million (US$84,306) had been projected in the record MVR17.96 billion budget approved by parliament for this year.

Meanwhile, auditors also found that the ACC renewed an office cleaning contract in violation of public finance regulations.

A contract with its previous cleaner was renewed on September 8, 2013 for a monthly fee of MVR7,420 (US$481).

“This contract was made without obtaining and evaluating estimates from competing vendors,” the report noted.

“According to the commission, seeking new estimates may have increased their cleaning costs.”

However, public finance regulations require estimates to be sought and evaluated from competing bidders for services costing between MVR25,000 (US$1,621) and MVR1.5 million (US$97,276).

“By not following the public finance regulation, the commission has no assurance that it is obtaining the best service at the lowest price.”

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Employment Tribunal spent MVR1.2 million in excess of approved budget

The Employment Tribunal spent MVR1.2 million (US$77,821) in excess of the parliament-approved budget in 2013, the institution’s audit report for 2013 made public today has revealed.

An annual budget of MVR5.7 million (US$369,649) for the tribunal had been approved by parliament.

“The overspent amount was facilitated by a budget extension of MVR1,251,429 made to the Tribunal by the Ministry of Finance and Treasury. However, it was observed that the parliamentary approval for this budget extension was not obtained as per clause 32(a) of the Public Finance Act,” the report stated.

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Stalled Ali Hameed cases “exposes state of Maldivian judiciary,” says MDP

The opposition Maldivian Democratic Party (MDP) has expressed “surprise and concern” with the revelation yesterday (May 4) that documents of a corruption case against Supreme Court Justice Ali Hameed were destroyed in a coffee spill at the Criminal Court.

An official from the Prosecutor General’s (PG) office told Minivan News that the Criminal Court requested resubmission of the case files three weeks ago, but has so far refused to present the allegedly damaged documents.

Justice Hameed is facing charges over the illegal transfer of credit from his state-funded mobile phone in 2010.

In a press release yesterday, the main opposition party stated that the lack of progress in cases involving Justice Hameed as well as “these incidents that occur when a case reaches court exposes quite well the state of the Maldivian judiciary.”

“As the documents of the corruption case raised by the state against Ali Hameed were destroyed after coffee was spilled on them, the party hopes that the Criminal Court will not decide that the charges cannot be proven for that reason,” the MDP’s press release stated in conclusion.

The Judicial Service Commission’s (JSC) regulations stipulate that action must be taken within 48 hours of a criminal case being filed against a judge. However, the judicial oversight body told local media last month that a decision would be made once the court decides to hear the case.

The Criminal Court’s media official told Minivan News on April 13 that the court had not decided whether or not to accept the case.

Cases filed by the PG office are scrutinised in the order of submission “to make sure all the paperwork is complete and that there are no missing documents,” he said. The process normally takes “two to three days,” he added.

The case against Justice Hameed – accused of abuse of authority to benefit a third party – was sent to the PG office in July 2013 by the Anti-Corruption Commission after investigating allegations in the 2010 audit report of the Department of Judicial Administration.

Auditors found that a Supreme Court Justice transferred MVR2,223 (US$144) from his state-funded mobile phone on different occasions during 2010.

Sex tapes

Justice Hameed is also the subject of investigations by both the police and the JSC over his alleged appearance in a series of sex tapes that emerged in May 2013.

A further video showed Hameed and a local businessman, Mohamed Saeed, discussing political influence in the judiciary.

After the secretly taped videos of Hameed engaging in sexual relations with three prostitutes in a Sri Lankan hotel room surfaced online, the JSC set up committees to investigate the case twice – in May and December 2013.

Both subcommittees unanimously recommended the JSC suspend Hameed pending an investigation.

However, in July 2013, the JSC disregarded the recommendation citing lack of evidence, while a JSC decision on the December subcommittee’s recommendation is still pending.

The MDP meanwhile stated that disgraced judges accused of corruption or blackmail should be suspended pending the outcome of a trial, noting that the practice was “regrettably” alien to the Maldivian judiciary.

Justice Hameed’s continued presence on the Supreme Court bench violated international best practices and judicial norms, the party contended.

Other cases

Meanwhile, the 2010 audit also discovered that MVR13,200 (US$856) was spent out of the apex court’s budget to repair a state-owned car used by an unnamed Supreme Court Justice, later revealed in the media to be Justice Hameed.

According to the police report cited by auditors, the driver of the justice’s car was responsible for the accident, which occurred on January 23, 2011.

However, the official driver insisted the car was undamaged when he parked and left it the previous night.

Despite the findings of the audit report, in March 2011 the Supreme Court dismissed allegations of corruption reported in local media regarding phone allowances and use of court funds to repair Justice Hameed’s car.

Moreover, in September 2011, the ACC began investigating allegations that over MVR50,000 (US$3,200) of state funds was spent on plane tickets for Justice Hameed’s official visit to China in December 2010.

The complainant alleged that Hameed also visited Sri Lanka and Malaysia both before and after his trip to China to attend a conference by the International Council of Jurists.

A return ticket on a direct flight from Malé to Beijing at time cost MVR16,686 (US$1,080).

Furthermore, in May 2012, the ACC revealed that Justice Hameed was among three sitting judges illegally occupying state-owned apartments.

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Justice Ali Hameed’s ‘corruption’ documents destroyed in coffee spill

The Criminal Court has asked the Prosecutor General’s Office (PG) to resend all files concerning Supreme Court Justice Ali Hameed’s alleged misuse of state funds after case documents were destroyed in a coffee spill.

The PG has asked the Criminal Court to present the damaged documents three weeks ago, but the court has not done so yet, an official from the PGO told Minivan News.

The state is raising corruption charges against Ali Hameed over the illegal transfer of credit from his state-funded mobile phone in 2010.

An official from the Criminal Court told Minivan News on April 13 that the court had not decided to accept the case or not.

Cases filed by the PG office are scrutinised in the order of submission “to make sure all the paperwork is complete and that there are no missing documents,” he said. The process normally takes “two to three days,” he added.

The case against Justice Hameed – accused of abuse of authority to benefit a third party – was sent to the PG office in July 2013 by the Anti-Corruption Commission (ACC) after investigating allegations in the 2010 audit report of the Department of Judicial Administration.

Auditors found that a Supreme Court Justice transferred MVR2,223 (US$144) from his state-funded mobile phone on different occasions during 2010.

According to the audit report, the interim Supreme Court bench on October 23, 2008 decided to provide for each justice “a post-paid line, a phone and to pay the phone bill without a set limit out of the court’s budget”.

The report also noted that between October 2008 and December 2011, Supreme Court judges paid their phone bills amounting to MVR 281,519 (US$18,257) from the state budget, despite the fact that parliament had not allocated any phone allowances to the judges. Additionally, MVR 117, 832 (US$7640) was found to have been overspent on wages and allowances to the driver of a judge’s car.

The judge is also currently subject to investigation over his alleged appearance in multiple leaked sex videos depicting him fornicating with foreign women in what appears to be a Colombo hotel room.

A further video also appears to show Hameed and a local businessman, Mohamed Saeed, discussing political influence in the judiciary.

Justice Hameed in the video reveals his political ‘hook-up’ with President Abdulla Yameen, claiming that he was one of Yameen’s “back-ups” and that his stand was “to do things the way Yameen wants”, promising to “kill off” Dhivehi Rayithunge Party (DRP) leader Ahmed Thasmeen Ali “if it comes into my hands.”

Even [Speaker of Parliament] Abdulla Shahid will know very well that my stand is to do things the way Yameen wants. That the fall of this government was brought with our participation,” he adds.

However, he also claims that he was a person who “even Yameen cannot play with” and that over time he had “shown Yameen” who he is.

After the sex tapes of Hameed surfaced in May 2013, the judicial oversight body, Judicial Services Commission (JSC), set up committees to investigate the case twice – in May and December 2013.

Both subcommittees unanimously recommended the JSC suspend Hameed pending an investigation.

However, in July 2013, the JSC disregarded the recommendation citing lack of evidence, while a JSC decision on the December subcommittee’s recommendation is still pending.

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President’s Office spent MVR30 million in excess of approved budget in 2011, audit reveals

The President’s Office (PO) spent MVR30.6 million (US$1.9 million) in excess of the approved budget in 2011 while MVR2.8 million (US$181,582) was used to cover expenses that were not directly related to the office’s mandate, the PO’s audit report (Dhivehi) has revealed.

Among the unrelated expenses were MVR1.8 million (US$116,731) spent on trips by former President Mohamed Nasheed to 88 islands ahead of the February 2011 local council elections, MVR904,855 (US$58,680) spent for then-Vice President Dr Mohamed Waheed to stopover in Singapore after attending the “Third Symposium on the European Academic Space” in Italy, and MVR139,676 (US$9,058) spent on a trip by the PO to check progress on the editing of ‘The Island President’ documentary.

While MVR526,454 (US$34,140) was spent for two trips to the United States by the vice president and his family, the report made public yesterday noted that there were no details of expenditure for MVR364,267 (US$23,623) of that amount.

Moreover, MVR235,556 (US$15,276) was spent out of the vice presidential residence’s budget for the vice president, his wife, child, and father to make the Hajj pilgrimage, but there were no details of expenditure for MVR60,524 (US$3,925) spent on food and accommodation.

“And while MVR69,112 (US$4,481) was spent for medical treatment during a trip by the vice president and his wife to Singapore in 2011, no documentation concerning the medical treatment was submitted,” the report stated.

Similarly, the report noted that MVR462,326 (US$29,982) was spent to cover the medical expenses of the president’s family in 2011, but were no documents related to the medical expenses.

A total of MVR677,369  (US$43,927) was meanwhile spent in 2011 on holidays for the president’s family, the report revealed.

Auditors also found that the PO paid mobile phone bills for political appointees out of the office’s budget in the absence of either a ceiling limit or rules to determine whether the calls were made for official purposes.

While MVR187,397 (US$12,152) was loaned from the PO budget to political appointees for personal expenses, auditors found that MVR184,191 (US$11,944) had not been repaid.

Moreover, MVR51,669 (US$3,350) was spent out of the vice presidential residence’s budget to pay mobile bills of the vice president’s wife, Madam Ilham Hussain, in contravention of the law governing privileges and state benefits for the vice president.

While the law stipulates that security for the vice president and his family must be arranged by the Ministry of Defence and National Security, auditors found that travel expenses for bodyguards during unofficial overseas trips by the vice president and his wife were settled out of the vice presidential residence, Hilaaleege’s budget.

Among other cases flagged in the report, auditors found that the PO had to pay MVR555,808 (US$36,044) as compensation to Shady Cabin after screws and sponges from 170 rented chairs went missing. The chairs were rented for the SAARC summit held in Addu City in November 2011.

The PO also covered expenses for foreign dignitaries out of its budget in the absence of rules for hospitality, the report noted.

Auditors found that MVR294,037 (US$19,068) was spent out of the presidential residence Muleeage’s budget for the stay of two British citizens from February 16 to 23.

Moreover, MVR29,058 (US$1,884) was spent out of the Muleeage budget for the “son of the president of a neighbouring country” to stay in a resort.

Auditors also discovered that there were 25 cable TV decoders in Muleeage and 12 decoders in Hilaaleege, for which MVR174,080 (US$11,289) and MVR81,917 (US$5,312) respectively was spent in 2011.

Lastly, auditors found that the PO did not maintain inventory records in accordance with public finance regulations. Plots of land and buildings under the care of the official residences of the president and vice president as well as fittings, furniture, and vehicles were not valued and included in the asset register.

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PG office presses corruption charges against Supreme Court Justice Ali Hameed

The Prosecutor General’s (PG) office has pressed corruption charges against Supreme Court Justice Ali Hameed Mohamed over the illegal transfer of credit from his state-funded mobile phone in 2010.

A media official from the Criminal Court told Minivan News today that the court has yet to make a decision on hearing the case.

Cases filed by the PG office are scrutinised in the order of submission “to make sure all the paperwork is complete and that there are no missing documents,” he explained.

The process normally takes “two to three days,” the media official said.

The case against Justice Hameed – accused of abuse of authority to benefit a third party – was sent to the PG office in July 2013 by the Anti-Corruption Commission (ACC) after investigating allegations in the 2010 audit report of the Department of Judicial Administration.

Auditors found that a Supreme Court Justice transferred MVR2,223 (US$144) from his state-funded mobile phone on different occasions during 2010.

According to the audit report, the interim Supreme Court bench on October 23, 2008 decided to provide for each justice “a post-paid line, a phone and to pay the phone bill without a set limit out of the court’s budget”.

“From October 2008 to December 2011, a total of MVR281,519.71 (US$18,256) was spent on phone bills,” the report stated.

Charge sheet

The Bar Association of Maldives last week called for the suspension of Justice Hameed pending an investigation into his alleged appearance in a series of sex tapes that emerged online last year.

After the sex tapes of Hameed engaging in sexual relations with three prostitutes in a Sri Lankan hotel room surfaced in May 2013, the judicial oversight body, Judicial Services Commission (JSC), set up committees to investigate the case twice – in May and December 2013.

Both subcommittees unanimously recommended the JSC suspend Hameed pending an investigation.

However, in July 2013, the JSC disregarded the recommendation citing lack of evidence, while a JSC decision on the December subcommittee’s recommendation is still pending.

Meanwhile, the 2010 audit also discovered that MVR13,200 (US$856) was spent out of the apex court’s budget to repair a state-owned car used by an unnamed Supreme Court Justice, later revealed in the media to be Justice Hameed.

According to the police report cited by auditors, the driver of the justice’s car was responsible for the accident, which occurred on January 23, 2011.

However, the official driver insisted the car was undamaged when he parked and left it the previous night.

Despite the findings of the audit report, in March 2011 the Supreme Court dismissed allegations of corruption reported in local media regarding phone allowances and use of court funds to repair Justice Hameed’s car.

Moreover, in September 2011, the ACC began investigating allegations that over MVR50,000 (US$3,200) of state funds was spent on plane tickets for Justice Hameed’s official visit to China in December 2010.

The complainant alleged that Hameed also visited Sri Lanka and Malaysia both before and after his trip to China to attend a conference by the International Council of Jurists.

A return ticket on a direct flight from Malé to Beijing at time cost MVR16,686 (US$1,080).

Furthermore, in May 2012, the ACC revealed that Justice Hameed was among three sitting judges illegally occupying state-owned apartments.

The commission contended that a decision by parliament’s finance committee to allow the judges to purchase the flats in Sina-Male’ contravened the Judges Act and the constitution.

The ACC explained that it investigated a complaint alleging three senior judges were occupying state-owned apartments while simultaneously receiving living allowances.

The flats were leased during President Maumoon Abdul Gayoom’s administration by the former Justice Ministry and High Court under terms that would see the now-defunct ministry and High Court gain ownership upon completion of full payment

The three judges had reportedly been paying rent for the flats in the government-owned Sina-Malé apartment blocks when the committee decided to grant them ownership upon completion of full payment.

The ACC found that the Finance Committee’s decision to register the flats to the judges was in violation of article 102 of the constitution and article 38 of the Judges Act as well as section 100(a)(11) of the parliamentary rules of procedure.

Article 39(b) of the Judges Act states that judges in the same court shall be given the same amount as living allowances and prohibits “different kinds of living allowance or benefits for different judges.”

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Audit uncovers illegal expenditure by Works Corporation

The audit report of the Works Corporation Ltd (WCL) for 2011 has exposed allegedly corrupt practices at the 100 percent government-owned company.

In a press release issued with the report (Dhivehi), the Auditor General’s Office stated that its audit uncovered numerous violations of the law as well as “problems related to performance and governance.”

Since the corporation did not compile its financial statement for 2011, as mandated by its charter and the Company’s Act, the press release noted that auditors reviewed selected transactions of the WCL.

The WCL was created by the administration of former President Mohamed Nasheed on March 25, 2009 to facilitate or carry out infrastructure projects.

Of the 34 projects awarded to the company in 2010 and 2011, the audit found that the government canceled 24 after the WCL failed to commence work.

“The government awarded the projects without adequate planning and without assessing the company’s capability to carry out the work,” the press release stated.

As the company had completed only one infrastructure project to date, the Auditor General’s Office suggested that the WCL had not served the purpose for which it was formed.

Managing director

Auditors discovered that the company’s managing director withdrew MVR180,000 (US$11,673), ostensibly to cover expenses for assisting the President’s Office in preparations for a ceremony held in Gulhifalhu.

While the company’s employees actively participated in the preparations, the report noted that the sum was withdrawn without any documentation proving the actual cost borne by the WCL.

Although the audit report did not identify the managing director, local media has revealed that the WCL MD in 2011 was Abdulla Javid ‘Jaa’, son-in-law of the then-ruling Maldivian Democratic Party’s (MDP) Chairperson ‘Reeko’ Moosa Manik.

Auditors also found that MVR146,999 (US$9,533) was transferred to the MD’s personal bank account to purchase a “total station” containing special tools from Singapore’s Tepcon Posting Sales Pvt Ltd.

However, the company had received neither the tools nor the transferred amount as of the report’s publication date.

Moreover, the WCL did not recover 14 sheet piles provided in May 2011 to Heavy Load Maldives Pvt Ltd, which was owned by the MD’s father-in-law MP ‘Reeko’ Moosa.

The WCL’s staff informed auditors that the 40-feet sheet piles were released after the MD called the deputy manager at the company’s Thilafushi site and instructed him to do so.

The audit report revealed that on the orders of the MD the WCL also provided electricity from its Thilafushi site to the Yacht Tours Maldives’ site on the industrial island.

Yacht Tours Maldives – owned by MDP MP Abdulla Jabir – had not paid WCL for 37,376 units of electricity used from December 28, 2010 to October 1, 2012, the audit found.

Violations

The WCL awarded 12 projects worth MVR198.6 million (US$13 million) to various parties in violation of the company’s procurement rules, the audit found.

The company’s procurement procedures manual stated that contracts worth MVR1.5 million (US$97,276) or higher must be awarded through the Finance Ministry’s tender evaluation board.

However, the audit noted, the 12 projects were awarded without either a bidding process or the involvement of the tender evaluation board.

An Indian company – identified as MM Export Pvt Ltd – contracted to supply reinforcement boulders was paid MVR2.7 million (US$175,097) in violation of the procurement rules as well as the WCL’s agreement with the company.

In another instance, a Sri Lankan company named Sri Krithika International was paid in excess of the stipulated amount for supplying construction material after the company imported a higher volume than was agreed upon.

Moreover, the WCL failed to recover MVR1.7 million (US$110,246) paid to Design-built Solutions Pvt Ltd as an advance payment for the Noonu Velidhoo harbour project despite termination of the agreement after the company did not commence work.

In a similar case, a company named Coastal Ventures Pvt Ltd was paid MVR5 million (US$324,254) for the construction of a harbour in Raa Fainu despite the company only completing a portion of the project.

As the portion completed by the company was worth MVR2.9 million (US$188,067), the audit noted that the company was paid MVR2.1 million (US$136,186) for work not done.

The report also contended that the WCL prioritised the interests of subcontractors in drafting agreements to the detriment of the company.

Auditors discovered that the company was owed MVR134,055 (US$8,694) in unpaid rentals and sale of equipment.

The WCL also misused a MVR50 million (US$3.2 million) stand-by credit facility provided by the Indian government to establish a sewerage system in Noonu Miladhoo and to construct a harbour in Noonu Kudafari.

Interest for the loan was rising as a result of the WCL failing to make regular payments, the report noted.

Meanwhile, as a result of poor record keeping, auditors were unable to ascertain the amount of money kept in the WCL safe when it was stolen in 2011.

While the company’s accounting systems showed that it was owed MVR22.5 million (US$1.5 million) from various parties, the audit report noted that the company’s financial book-keeping was too unreliable to establish the validity of the figure.

Similarly, auditors could not verify whether the MVR60.7 million (US$4 million) owed by the WCL for procurements and services was authentic.

The company also paid its chairman more than MVR600,000 (US$38,910) as a “special allowance” from June 2009 to February 2012 against the pay scheme for board members of state-owned enterprises.

Moreover, the company’s hiring and firing practices as well as promotions for staff contravened its “employment, benefits and salary policy.”

Lastly, the WCL had not maintained a registry of its assets since April 14, 2010, auditors found.

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