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.