Government guarantee for GMR, Heavy Load illegal

The government issued a guarantee for Indian infrastructure giant GMR in 2011 and Heavy-Load Maldives Pvt Ltd in 2010 against the Public Finance Act, the Audit General’s Report on Statement of Government Guarantees has revealed.

GMR was granted a US$ 511 million contract to develop the Ibrahim Nasir International Airport (INIA) in 2011 under President Mohamed Nasheed, but President Dr Mohamed Waheed Hassan declared the contract void ab initio in 2012 and gave the company seven days to leave the country.

Heavy Load is owned by opposition Maldivian Democratic Party’s (MDP) chairperson and MP ‘Reeko’ Moosa Manik.

According to Auditor General Niyaz Ibrahim, the Ministry of Finance and Treasury issued a guarantee for a US$ 358 million loan from a Singaporean bank without any prior assessments the guarantee may have on the economy or the president’s permission.

Regarding the Heavy Load guarantee, the report said the Finance Ministry issued a ‘no objection letter’ the State Bank of India (SBI) concerning a Letter of Credit (LC) opened for Heavy-load.

The LC, amounting to USD 206, 400 (MVR 2,652,240) was issued from a USD 50 million  provided by the government of India and managed by the State Bank of India (SBI) Male’ branch.

The arrangement was for SBI to provide US Dollar LCs for for imports from India when the importers deposited the equivalent amount upfront in Maldivian Rufiya.

The ‘no objection letter’ sent by MOFT to SBI concerning Heavy-Load stated that company would settle the MVR equivalent when their LC expired.

The Auditor General’s report noted that the letter was in contravention to Public Finance Act and that the State Minister who signed the said letter did not have the authority to provide such a guarantee on behalf of the Ministry and, as required by the act, prior approval from the President was not sought in issuing it.

The report stated that both guarantees were not declared in the Statement of Guarantees, despite the Public Finance Act requiring all such guarantees be recorded.

It also said when the company had defaulted in settling the LC, SBI made the Finance Ministry liable as the guarantor, but the Ministry failed to recover the MVR equivalent proceeds of the LC (MVR 2,652, 240) from Heavy-Load.

The Ministry was recommended in the report to take “appropriate steps including legal action if required” against Heavy-load to recover the defaulted payment on the LC.


MDP Chair’s company ordered to pay MVR1.3million

The Civil Court has ordered Heavy Load Maldives Pvt Ltd to pay MVR1.3million (US$84,41500) for the failed payment of several speedboats, reports local media.

Heavy Load – owned by the family of Maldivian Democratic Party Chairperson ‘Reeko’ Moosa Manik – was ordered to reimburse Maldives Finance Leasing Company Pvt Ltd after the court found it had failed to meet the previously agreed payment schedule.

The unpaid amount – for which Moosa was reported to have been guarantor – is to be paid to the court within three months.


Deputy Minister paid salary with no record of attendance, Tourism Ministry audit report reveals

A Deputy Minister at the Ministry of Tourism, Arts and Culture was paid salary and allowances from April 2011 to January 2012 with no official records of attendance, the ministry’s audit report for 2011 has revealed.

The audit report (Dhivehi) made public on Tuesday stated that a total of MVR 343,351 (US$22,267) was paid to the senior official for 10 months while there was no documentation to show that he “ever attended either the ministry or any office functioning under the ministry.”

The Auditor General recommended recovering the funds and taking action against the responsible staff at the ministry.

While there was no specific regulation governing attendance of political appointees at the time, the Auditor General contended that paying salaries without attendance records was against “the spirit of the public finance regulations.”

In addition, the audit discovered that the ministry gave a temporary license or authorisation to a private company to operate a tourist hotel at the Laamu atoll Kadhdhoo airport in violation of the Tourism Act.

The audit found that the permission was given despite an inspection report finding that the facility did not meet the criteria for a tourist guesthouse in terms of quality of service.

A tourist hotel is ranked higher than a guesthouse, the audit report noted.

Under articles 4, 18 and 19 of the tourism law, the report explained, a tourist hotel could not be operated on the plot at the regional airport.

The hotel was however operated from May 24, 2011 to December 25, 2011 before official permission or a permanent license was sought, the audit report noted.

Local media reported yesterday (November 28) that the guesthouse or hotel was operated by Heavy Load Maldives, a family business of MP ‘Reeko’ Moosa Manik, chairperson of the formerly ruling Maldivian Democratic Party (MDP).

The Auditor General recommended submitting the case to the Anti-Corruption Commission (ACC) for further investigation.

Minivan News is seeking comment from former Tourism Minister Dr Mariyam Zulfa.

The audit report also noted that temporary authorisation or licenses for operating guesthouses were renewed “some times for over a year” while the facilities did not meet the requisite criteria.

Moreover, registration and licenses were provided to some dive centres and guesthouses without collecting registration and licensing fees.

In other cases highlighted in the report, the audit noted that documentation was not properly maintained for equipment such as camera and mobile phones purchased in 2010.

As a result, equipment provided for use by staff was not recovered when the employees left the office.

In addition, the Tourism Ministry did not maintain a detailed income registry with reference numbers and dates as required by the public finance regulations. The regulations require that the registry must be routinely shared with the Finance Ministry.

“However, inquiries for the Ministry of Tourism’s 2011 audit revealed that such a record [of income] was not prepared and maintained,” the audit report stated. “As a result, we note that it could not be confirmed whether the incomes due to the ministry was received in full.”

Offices and departments under the Tourism Ministry

The audit report noted that the Tourism Ministry’s audit for 2011 was conducted without any documentations or financial records from the Department of Information (DOI) operating under the ministry.

Repeated requests for documents from the department went unheeded, the report stated, adding that the financial statement of the DOI was not provided for the 2010 audit either.

On Monday (November 26), the President’s Office announced that the DOI has been abolished as new institutions formed by the 2008 constitutions carries out the functions previously performed by the department.

“Following this change, registration of media; formulating policies and facilitating the development of local media; creating the official Maldives’ calendar; maintaining the registry of journalists and writers; and, representing the Maldives internationally in the press field will be carried out by the Ministry of Tourism, Arts and Culture. Information to international media on local events will be given by the Ministry of Foreign Affairs,” the President’s Office stated.

Meanwhile, concerning the other offices operating under the ministry, the audit found that employees of the Maldives Tourism Promotion Board (MTPB) were paid overtime salaries in violation of the civil service regulations for calculating overtime.

The audit also noted that clothing allowance was paid to all employees in January 2011 in anticipation of overseas trips to attend tourism fairs. However, the allowance was not recovered from two staff at MTPB who did not travel abroad during the year.

An audit of the National Centre for the Arts (NCA) meanwhile revealed that MVR 24,735 (US$1,604) was spent out of the budget on tickets for a lecturer and his family for a “one-day creative writing workshop” on November 19, 2011.

However, an official agreement was not signed between the lecturer and the NCA and there was no documentation at the centre regarding the workshop.

The NCA also spent MVR 33,000 (US$2,140) during a ten-day period on food for 20 staff working on a “Male’ Art Festival” in excess of the approved rate in the public finance regulations. Catering was also arranged without a public announcement after seeking quotations from only two parties, the audit found.

A total of MVR 19,750 (US$1,280) was spent on catering for seven events organised by the NCA in 2010 without seeking quotations from more than one party.

The catering contract was awarded to a particular party at a rate of MVR 50 per person while the public finance regulations specify a rate of MVR 40 per person.

Aside from a note from NCA and catering bills, the audit report noted that no other documentation for the transactions could be found at the NCA.


Thilafushi Corporation owes US$1.7 million, claims Heavy Load

Heavy Load Maldives has claimed that the Thilafushi Corporation Ltd (TCL) owes the company Rf26 million (US$1.7 million) for completed land reclamation work, according to local daily Haveeru.

Heavy Load Director Bushainath Moosa told the newspaper that the company was unable to pay Rf6 million (US$389,105) owed to Fuel Supply Maldives (FSM) due to pending payments from TCL as the most of the fuel had been used for the land reclamation project.

FSM has meanwhile sued Heavy Load to recover the outstanding fuel payments.

“We obtained the fuel when TCL gave us a guarantee of Rf5 million (US$324,254),” Bushainath was quoted as saying. “But we have been hindered by the unpaid Rf26 million from TCL.”

Bushainath further claimed that the Anti-Corruption Commission (ACC) informed Heavy Load Maldives in a letter declaring that the company was not at fault in the controversy surrounding the Thilafushi land reclamation project.

Heavy Load Maldives is a family business of the former ruling Maldivian Democratic Party (MDP) Chairperson and Hulhu-Henveiru MP ‘Reeko’ Moosa Manik.

“There have been attempts to discredit the image of this company for political gain,” Bushainath said, adding that rumours of corruption and undue gain were adversely affecting business.

In May, TCL Managing Director Mohamed Latheef told Minivan News that delays in the land reclamation project have resulted in only 20 percent of the work being completed.


Heavy Load re-submits proposal for developing Enboodhoo

A proposal to develop  Enboodhoo lagoon in Kaafu Atoll has been re-submitted by Heavy Load Maldives, a corporation linked to Maldivian Democratic Party’s (MDP) Chairperson Moosa ‘Reeko’ Manik, Haveeru reports.

The National Planning Council reportedly discussed the proposal by Heavy Load in early July. But officials said the proposal has not been fully approved, and all parties are invited to submit proposals.

Heavy Load received US$21 million (Rf269.8 million) from Thilafushi Corporation Limited (TCL) in late September, allegedly to reclaim 130 hectares from Thilafushi lagoon, reports Haveeru.

However, the Anti-Corruption Commission (ACC) asked Heavy Load to halt work and open the project opportunity to other development groups.

Enboodhoo lagoon is located 10 kilometers from Malé.