MMA announces shortlisted proposals for new rufiyya note designs

The Maldives Monetary Authority (MMA) has announced the shortlisted candidates in a competition to design the new Maldivian currency notes.

Proposal for the new notes to be released on the occasion of the 50th Anniversary of Maldivian independence were evaluated by an advisory committee of 13 members comprising of representatives from various technical fields including history, art, language, and economics.

The shortlisted candidates will present their proposal to the advisory committee on January 17, with the three best presentations given the opportunity to design the six notes to go into general circulation and the memorial note for 50 years of independence.

The MMA board of directors will make the final decision on which designs will be printed after considering the evaluation of the advisory committee.

After initially inviting designs for notes in September, the MMA extended the November 30 deadline for one month after concluding that the 60 submitted designs were all unsuitable for bank notes.


MMA warns of shortfalls in revenue due to ad hoc policy changes

The Maldives Monetary Authority (MMA) has advised against making ad hoc changes to policies outlined in the 2015 state budget that could affect projected revenue and expenditure.

“If policies are changed the budget deficit would increase and become difficult to finance,” the central bank cautioned in its professional opinion (Dhivehi) on the budget, which was made public on Thursday (November 20) after media was excluded from parliament’s budget committee’s meeting with the MMA governor last week.

The MMA recommended ensuring that forecast revenue would be realised in full if policy changes become necessary during the year.

While the budget included a ‘green tax’ for tourists of US$10 per day, Tourism Minister Ahmed Adeeb later announced that the government has decided to lower the rate to US$6 and exempt guest houses.

The MMA recommended introducing the tax before November 2015 as planned in order to raise the income anticipated in the budget.

During the budget debate in parliament last week, minority leader Ibrahim Solih questioned whether the MVR21.5 billion (US$1.3 billion) revenue forecast in the budget could be realised.

While MVR340 million (US$22 million) was forecast as income from the green tax in the last quarter of 2015, Solih observed that the decision to lower the rate and delay implementation would lead to a revenue shortfall of about MVR300 million (US$19.4 million).

The MMA also advised against launching infrastructure projects without securing financing.

Following its annual Article IV consultation, the International Monetary Fund (IMF) advised last week that “large capital investments should only be embarked upon when full financing is secured at affordable costs and the growth benefits clearly outweigh the costs.”

The MMA meanwhile recommended targeting subsidies to the needy from January 2015 onward.

Finance minister Abdulla Jihad noted in his budget speech to parliament that targeting the electricity subsidy to low-income families or households would save 40 percent of the government’s expenditure on the subsidy.

In May, MMA Governor Dr Azeema Adam called for “bold decisions” to ensure macroeconomic stability by reducing expenditure – “especially the un-targeted subsidies”.

Deficit financing

The central bank also recommended implementing a population consolidation policy in the medium-term in order to “reduce state expenditure and provide services to the public in a sustainable way”.

Additionally, the MMA suggested that 85 MPs in the People’s Majlis and more than 1,000 councillors were disproportionately high and advised revisions to the framework of governance.

The current model of more than 1,000 elected councillors approved in 2010 by the then-opposition majority parliament was branded “economic sabotage” by the Maldivian Democratic Party government, which had proposed limiting the number of councillors to “no more than 220.”

The new layer of government introduced with the first local council elections in February 2011 cost the state US$12 million a year with a wage bill of US$220,000 a month.

Recurrent expenditure in 2015 is meanwhile expected to be MVR15.8 billion (US$1 billion) or 65 percent of the budget.

Referring to the proposed tax and tariff hikes in the budget, the MMA suggested that businesses were not able to adequately prepare or plan accordingly when new taxes are introduced with each year’s budget.

Taxation on businesses should be planned at least three years in advance and should not be raised in that period, the central bank recommended.

The MMA also recommended changing short-term debt to long-term and to cease depending on the domestic market to finance deficit spending in favour of “selling long-term foreign bonds at low interest rates”.

In his budget speech, finance minister Jihad revealed that public debt is expected to reach MVR31 billion (US$2 billion) or 67 percent of GDP at the end of 2014.

According to the central bank, the total outstanding stock of government securities was MVR13.6 billion (US$881 million) at the end of September while the outstanding stock of treasury bills sold in the domestic market was MVR10 billion (US$648.5 million) as of November 6.

“This year we estimate that MVR1.2 billion worth of T-bills have been used by the state for finances. In 2015, it will be MVR440 million,” Jihad told the budget committee earlier this month.

Rolling over T-bills was proving to be a “nightmare” as the finance ministry has to plead with banks for extension of repayment periods, Jihad said.

While the government proposed raising MVR112.3 million from the domestic market to finance the deficit, the MMA revealed that the figure reached MVR1 billion during the year.

The MMA noted that reliance on commercial banks to finance deficit spending would squeeze lending to the private sector.

In its concluding statement, the MMA stressed that expenditure should not exceed budgeted amounts and income should be collected in full if the government was to achieve it economic policy objectives.

Related to this story

US$6 green tax to be introduced from November 2015, says tourism minister

Parliamentary budget debate concludes

Maldives economy “relatively buoyant” but fiscal imbalances continue to grow: IMF


Funds raised in Maldives to support terrorism abroad: State Department

The Maldivian government believes that funds are being raised in the country to support terrorism abroad, according to the US State Department’s 2013 country report on terrorism.

The report however noted the absence of “reliable information regarding the amounts involved.”

“While no official studies yet have been conducted, the Maldivian Central Bank believes that criminal proceeds mainly come from domestic sources, as a large percentage of Suspicious Transaction Reports (STRs) are related to Maldivians,” the report revealed.

“The Maldives Monetary Authority [MMA] reports that hawala systems (informal money transfer networks) are being used to transfer funds between the islands, although the extent to which these systems are used to launder money is still unclear.”


While the government monitored “banks, the insurance sector, money remittance institutions and finance companies, and requires the collection of data for wire transfers,” the report noted that “financial institutions other than banks and intermediaries in the securities sector” were not subject to anti-money laundering/countering the financing of terrorism (AML/CFT) obligations in 2013.

Consequently, insurance companies and intermediaries, finance companies, money remittance service providers, foreign exchange businesses, and credit card companies “operate outside the AML/CFT framework.”

Moreover, non-profit organisations were not required to file suspicious transaction reports while such organisations were neither monitored nor regulated “to prevent misuse and terrorist financing.”

The report added that the government does however monitor and regulate “alternative remittance services”.

The government meanwhile “did not report any efforts to seize terrorist assets in 2013.”

Capacity building of regulatory bodies – MMA and the Capital Market Development Authority – and law enforcement agencies such as the police, Anti-Corruption Commission, customs and immigration, was needed to counter money laundering and terrorist financing, according to the government.

AML/CFT legislation drafted by the MMA was passed by the People’s Majlis last month and ratified by President Abdulla Yameen on April 13.

The new law introduced rules governing financial transactions and the inflow and outflow of money from the Maldives.

The bill was expedited by parliament’s national security committee at the urging of a high-level delegation from the Asia/Pacific Group on Money Laundering (APG), which warned MPs of “negative consequences” of failure to enact the legislation.

The absence of legislation “makes Maldives very vulnerable to money laundering and terrorist financing,” APG Executive Secretary Dr Gordon Hook told MPs in February. The vulnerabilities were identified by the International Monetary Fund (IMF) in a report prepared in 2011.


The report further noted growing concern since 2010 “about the activities of a small number of local violent extremists involved with transnational terrorist groups”.

“There has been particular concern that young Maldivians, including those within the penal system, may be at risk of becoming radicalized and joining violent Islamist extremist groups. Links have been made between Maldivians and violent extremists throughout the world,” the report stated.

A counter-terrorism analyst previously involved in law enforcement told Minivan News today on the condition of anonymity that the most worrying aspect for the Maldives was the vulnerability of youth to radicalisation.

“Youth are vulnerable to organised crime as well, not just violent extremism,” he said, noting the absence of data or statistics as well as studies into radicalisation of youth.

On the efforts to counter violent extremism, the report noted that the government pursued counter-radicalisation initiatives last year.

“In 2013, the Ministry of Islamic Affairs conducted more than a dozen seminars and workshops on preventing violent extremism for religious leaders, educators, and local government officials,” the report stated.

While several people “possibly associated with violent extremism” were arrested during the year, the report noted that existing laws “severely limit” the prosecution of such cases.

As a result, it added, “the number of convictions was limited.”

The Maldives participated in the State Department’s Anti-Terrorism Assistance (ATA) programme while the US also provided training in “fraudulent travel document recognition” to over 100 immigration officers.

“Maldives has few laws that effectively control the movement of people and money in and out of the country. Due to its sprawling island geography and insufficient technological capabilities, the Maldivian Coast Guard currently cannot effectively patrol Maldivian waters,” the report observed.

The report also noted the installation of PISCES (Personal Identification Secure Comparison and Evaluation System) at the Ibrahim Nasir International Airport (INIA) as well as the Male’ seaport with US assistance in August 2013.

Meanwhile, earlier this week, the New Indian Express reported that a Sri Lankan arrested in Chennai on terrorism charges was also targeting locations in the Maldives.


Newly appointed MMA governor reveals plans to strengthen economy

The newly appointed Governor of Maldives Monetary Authority (MMA) Dr Azeema Adam has stated that she will ensure firm action is undertaken to strengthen both the economy and its currency.

“We need to strengthen foreign exchange market regulatory framework and establish a sufficient monetary policy framework in order to maintain the value of rufiyaa,” she told local media yesterday.

Azeema added that the strengthening of these frameworks would also assist in reducing inflation and the rise in prices of general commodities, as well as echoing the concerns of her predecessor regarding monetisation.

“Printing money to overcome the budget deficit is something that brings down the value of the Maldivian rufiyaa. Therefore, this needs to brought to an end.”

“In order to do so, the MMA will assist the government to finance their budget deficit through a market mechanism,” she revealed.

She added that this will be difficult to accomplish without decrease government spending, while also noting the importance of the ratification of the new MMA Act which has been recently drafted.

Azeema also pledged to bring an end to dollar transactions on the black market, noting the importance of maintaining the value of local currency in a country like the Maldives which strongly depends on foreign currency.

The MMA’s recent balance of payments projections estimate that the country’s current account deficit will widen to US$562.5 million in 2014, which is equal to 22 percent of GDP.

She pledged to bring down the expense of running the central bank, stating that decreasing spending throughout the state bodies is imperative to strengthening the country’s economy.

Azeema stated that, although Maldives has a comparatively high level of investments in tourism and other sectors, it has so far failed to be reflected in the country’s financial status.

Productivity increasing

Due to the rapidly developing tourism sector, productivity of the Maldives will increase by 4.5 percent by the end of 2014, she said.

“At the end of 2013 we had US$368 million. Our estimate is that this will rise to 400 million dollars by the end of this year. Looking at how much is imported from this reserve, this is the import of about 2 or 3 months,” local media reported the new governor as saying.

Dr Azeema estimated that, compared to 2013, the current account deficit of the country will increase by 16 percent this year, while the official reserves exceed this. She said that this estimate is made based on the developing tourism sector, and the increased earnings that the government is acquiring from the field.

She went on to reveal that the major work the MMA will currently undertake is to introduce new insurance services and to establish further Islamic financing instruments.

The MMA will assist banks in releasing more loans to individuals by decreasing the minimum reserve requirement that they have to keep deposited at the central bank, she said.

“We need to strengthen the financial sector through revisions, this is a work we must undertake. We do not see big investments being made in the financial sector. However, we need to attract investments into this sector too,” Azeema told the press.

The governor stated that, where required, the central bank will also work to revise necessary laws and regulations in an attempt to strengthen the financial sector. She stated that this would assist the government in obtaining funds to implement various projects, while also being of help to small and mid-level businesses.

She highlighted the importance of creating more public awareness about the financial sector as well as encouraging a mentality of keeping savings from their earnings.

She further said that the MMA would encourage the use of electronic payment systems as opposed to cash and cheques. She stated that more convenient and efficient electronic payment systems will be introduced by the central bank, adding that this would be more secure than cash and cheque transactions.


Tourist arrivals rose 17 percent in 2013

Tourist arrivals to the Maldives rose 17 percent in 2013 compared to the previous year, according to the latest Maldives Monetary Authority (MMA) monthly economic review.

This was mainly due to the large increase in tourist arrivals from China, coupled with a slight growth in arrivals from Europe. Reflecting this, the total bednights and occupancy rate also recorded an increase during the year,” the MMA’s review stated.

The review did note, however, that the average duration of stay declined in 2013 compared with the year before.

Statistics from the tourism ministry show that 331,719 Chinese tourists visited the Maldives last year, which was a 44.5 percent increase from the previous year.

Chinese tourists accounted for 29.5 percent of all tourist arrivals in 2013.

The central bank also noted that real GDP (Gross Domestic Product) was expected to “accelerate to 4.5 percent in 2014, driven mainly by the tourism sector.”

In November 2013, the finance ministry revealed that the tourism industry’s GDP growth in 2012 declined by 0.1 percent following 15.8 percent growth in 2010 and 9.2 percent in 2011.

Despite negative growth in 2012, the finance ministry estimated that the industry would have expanded 5.5 percent in 2013 and forecast a growth rate of 5.2 percent for this year.

The average duration of stay has however fallen from 8.6 days in 2009 to 6.7 days in 2012 and 6.3 days in 2013.

According to the annual tourism yearbook published by the Tourism Ministry, the average occupancy rate of all tourist establishments in 2012 was 2.5 percent below the previous year at 70.6 percent.

The Maldivian economy is largely dependent on tourism, which accounted for 28 percent of GDP on average in the past five years, and generated 38 percent of government revenue in 2012.

Meanwhile, in the fisheries industry – the second largest domestic industry – “the volume of fish exports increased by 48 percent while the earnings on fish exports rose by 14 percent” between January and November 2013 compared to the same period in 2012.

This was contributed by the increase in both the volume and earnings on fresh, chilled or frozen tuna,” the MMA report stated.

It added that fish purchases rose by 21 percent from January to September 2013 compared to the same period the previous year.


The monthly review noted that the International Monetary Fund (IMF) commodity price index increased by two percent in monthly terms during December 2013.

“This increase was due to the rise in food, metal and petroleum prices in the review period. In annual terms the IMF commodity price index increased by one percent, contributed by the increase in petroleum prices which off set the price declines in food and metal.The price of crude oil increased by three percent in monthly terms during December 2013, while prices rose by six percent in annual terms,” the review stated.

The rate of inflation in the capital Malé meanwhile decreased to 3.1 percent in December 2013, the MMA revealed, which was “largely due to the fall in fish prices.”

“Similarly, the rate of inflation in Male’ decelerated  marginally in monthly terms during December 2013, which was also due to the fall in fish prices,” the review stated.


Government finances “further deteriorated in first six months of 2013”: MMA Quarterly Economic Bulletin

Government finances “further deteriorated in the first six months of 2013” due to a sizeable shortfall in expected revenue coupled with a marked increase in recurrent expenditure, according to the Quarterly Economic Bulletin of the Maldives Monetary Authority (MMA) released last week.

The central bank observed that the government’s target of reducing the budget deficit to 3.6 percent of gross domestic product (GDP) this year from 12.6 percent in 2012 “now seems rather challenging.”

“These developments have resulted in a widening of the budget deficit as indicated by the large financing requirement of the government during the first six months of 2013. The difficulties in accessing long-term foreign funds to finance the budget deficit resulted in the government resorting to the Maldives Monetary Authority (MMA) and other domestic sources to finance its growing deficit,” the report stated.

The economic bulletin explained that around 15 percent of total revenue budgeted for 2013 – MVR1.8 billion (US$116.7 million ) – was to be raised from new revenue measures, “which so far have not materialised.”

The revenue raising measures proposed in the 2013 budget included hiking Tourism Goods and Services Tax (T-GST) to 15 percent from July 2013 onward, raising airport service charge to US$30, leasing 14 islands for resort development, raising tariffs on oil, introducing GST for telecom services, and “selectively” reversing import duty reductions.

In April, parliament rejected government-sponsored legislation to raise the departure tax on outgoing passengers, prompting Finance Minister Abdulla Jihad to seek parliamentary approval to divert MVR 650 million (US$42 million) allocated for infrastructure projects in the budget to cover recurrent expenditure.

The move followed a cabinet decision to delay implementation of new development projects financed out of the budget due to shortfalls in revenue.

The economic bulletin meanwhile revealed that total revenue in the first half of this year (MVR5.9 billion or US$382 million) increased by 22 percent compared to 2012 on the back of a 35 percent increase in tax revenue.

Tax revenue was “boosted by favourable receipts from GST [Goods and Service Tax] and Business Profit Tax (BPT).”

While GST receipts rose by 46 percent, “contributed by the increase in the rate of GST on the tourism sector (T-GST), from 6% to 8% on 1 January 2013,” BPT receipts increased by 83 percent.

The MMA report explained that BPT collection this year was “based on financial returns for the twelve months ending June 2012, while the BPT collections made in 2012 were based on the financial returns of for the six months ending August 2011.”

Growing government spending

The economic bulletin also revealed that the total government expenditure of MVR6.7 billion (US$435 million) in the first half of 2013 was 8 percent higher than the same period in 2012.

The growth of government spending was “entirely due to the 21 percent (MVR965.3 million) growth in recurrent expenditure, which was partly offset by the 26 percent (MVR440.6 million) decline in capital expenditure during the period.”

Capital expenditure declined due to the government’s decision to suspend infrastructure projects financed out of the budget “in the face of significant shortfalls in revenue due to the inability to implement new revenue measures.”

The increase of recurrent expenditure was meanwhile “driven by the increase in spending on wages and salaries and government pension contributions, both of which largely reflects the transfer of employees in health corporations to civil service commission and employees in Aviation Security Service to Ministry of Defence and National Security starting from January 2013.”

In its professional opinion on the budget proposed for 2013, the Auditor General’s Office had suggested “major changes” to right-size the public sector and “control the salary of state employees and expenditure related to employees” to rein in the budget deficit.

The Auditor General observed that, compared to 2012, the number of state employees was set to increase from 32,868 to 40,333 – resulting in MVR 1.3 billion (US$84.3 million) of additional expenditure in 2013.

This anticipated increase included 864 new staff to be hired by the Maldives Police Service (MPS) and Maldives National Defence Force (MNDF).

Deficit financing

The budget deficit forecast for 2013 was MVR 2.33 billion (US$149 million) – to be financed by MVR 1.15 billion (US$74.5 million) in foreign loans and MVR 1.17 billion (US$75.8 million) in domestic finance.

The MMA’s economic bulletin noted that the budget deficit was largely financed from domestic sources, including the issuance of treasury bills (T-bills) to banks and non-bank sectors.

“At the end of June 2013 the total outstanding debt stock of government securities (T-bills and T-bonds) rose to MVR11,702.3 million which reflects a net issuance of MVR586.9 million in the first half of 2013 compared with MVR615.8 million in the same period of 2012,” it stated.

“Meanwhile, with the increasing challenges faced by the government in financing its growing deficit through domestic sources, the government at times had to resort to the MMA, to finance its deficit. During the first six months of 2013, the change in MMA net credit to government increased to MVR781.0 million from MVR131.2 million in the first six months of 2012.”

The country’s trade deficit also widened in 2013 compared to the same period last year due to higher level of imports, which “reflects the increase in domestic demand driven by economic recovery and the increase in government expenditure.”

While gross international reserves increased in the first six months of 2013 due to the “accumulation of foreign assets by the commercial banks,” the bulletin noted that, “in terms of import cover, gross reserves remained unchanged at 2.5 months in June 2013 reflecting the acceleration in import growth.”


Maldives’ central bank aware of speculation over counterfeit five rufiya notes

The Maldives Monetary Authority (MMA) is aware of rumors that counterfeit five rufiya notes are in circulation, however they have received no official information or reports from the Maldives Police Service (MPS), reports local media.

The MMA – the Maldives’ central bank – is aware of “speculation” that newly-forged counterfeit currency is circulating in Addu City and other atolls, but no official police reports have been submitted, an official from MMA told local media.

“We have heard this from different sources. But we’ve not received any such information from the police,” the official said.

Police intelligence has received information that approximately 1000 fake five rufiyaa notes entered Hithadhoo ward of Addu City, Addu City police commander Station Inspector Mohamed Hassan told Sun Online last week.

Police intelligence sources obtained a counterfeit note from the group suspected to have brought the money into Addu City, said Hassan.

A layman would not be able to initially determine their (in)authenticity, he added.

Rumors of the counterfeit currency began circulating in Addu City and other atoll islands last week.

“A lot of forged five rufiyaa notes are going around in this island. There are rumors that certain stores are handing out forged five rufiyaa notes as change,” a person from Eydhafushi Island in Baa Atoll told Sun Online.


Leaked Grant Thorton report reveals beneficiaries of BML’s risky pre-2008 lending

Additional reporting by JJ Robinson

A leaked draft of a report into the Bank of Maldives’ (BML) lending practices prior to 2008 has identified those behind potentially destabilising breaches of both BML and Maldives Monetary Authority (MMA) guidelines.

The asset recovery investigation by forensic accounting company Grant Thornton, drawing on the 2008 Attorney General’s report on BML, concludes that it would have been “impossible for the [BML] board to not have been influenced” in the granting of significant exposures in the form of credit to a select coterie of Gayoom-era affiliates.

The document reveals well-connected individuals bypassing BML rules regarding the handling of non-performing assets, with a number of large companies belonging to politically-active businessmen continuing to receive credit despite failing to satisfactorily meet previous repayment obligations.

“The large exposures that BML held, were in the main, due to members of the board or their relatives,” the report found.

“Due to the fact that the largest exposures of the bank were from Board members and/or their families, it would be unrealistic for the Board to provide any clear independent review of the banking facilities provided, and would in [our] view form conflict of interest issues for those Board Members involved,” it added.

The report names a number of individuals and business groups who benefitted from the state bank’s loan and overdraft facilities towards the end of Maumoon Abdul Gayoom’s 30 year tenure as head of state.

The government was handed a US$10million (MVR 154.2 million) invoice from Grant Thornton last year in what former Foreign Minister Dr Ahmed Shaheed told Minivan News was a penalty fee for stopping the investigation initiated under Gayoom’s successor Mohamed Nasheed.

Prior to the alleged request from the current government to halt the investigation, Grant Thornton had uncovered evidence of an alleged US$800 million oil trade involving former head of the State Trading Organisation (STO) and current presidential hopeful Abdulla Yameen. Shaheed alleged that the accounting firm was contracted to receive a percentage of any assets recovered as a result of its work.

The private parties named in Grant Thorton’s BML assessment include the Sun Group, Lily Group, Sultans of the Seas, VA Group, Afeef Group, Villa Group, Thasmeen Ali, VB Group, and Rainbow.

“Many of the above parties benefited from loans that were used to assist in purchasing leases for resorts, related tourism businesses etc, of which would not have been achieved without the connections held by certain individuals,” the report said.

The report also makes particular mention of the role of Ibrahim Gasim, both Finance Minister and non-executive BML board member at the time of the majority of cases documented within the Grant Thornton report.

Gasim, who is also standing as the Jumhoree Party (JP) presidential candidate in next month’s election, would have been responsible for the appointment of the majority of the BML board at this time.

Grant Thornton’s report revealed that Gasim’s Villa Group had been loaned MVR481,299,571 (US$37,601,520) as of October 31st 2008, representing 32.4 percent of the bank’s entire capital.

This represents one of a number of examples of such exposure featured in the report, despite the Bank’s acquiescence in 2006 to an MMA request to reduce any credit guaranteed to individual or related group borrowers to 30 percent of overall capital.

After repeated lobbying, the MMA increased this amount to 40 percent. Grant Thornton suggested that this extension request was due to the fact that a number of the groups mentioned in its report were already exceeding the original lower limit.

In rejecting one of BML’s requests for an increased credit exposure limit, the MMA wrote that “such concentration of credit is far in excess of the legal lending limits of the bank and it could seriously threaten the bank’s position, and the stability of the whole financial sector,” the leaked document stated.

Even with this increase, Sun Group is reported to have exceeded this limit after January 2008, with loans and overdraft facilities reaching  MVR 607,345,442 (US$46,879,400) as of 31 October 2008.

“This amounted to 40.8 percent of the Bank’s capital as at 31 October 2008,” the report observed.

Loans and overdraft facilities provided to Afeef Group totalled MVR 245,123,414 (US$19,150,266) as of October 31, 2008 – approximately 16.5 percent of BML’s total capital at the time.

Sun Group Chairman and majority shareholder Ahmed Shiyam’s Maldivian Development Alliance (MDA) meanwhile this week announced its decision to form a coalition the Progressive Party of Maldives (PPM), headed by former President Gayoom.

Alterations to BML’s internal loan approval mechanisms for board members in May 2007 resulted in the bypassing of the bank’s Credit Committee.

“This effectively meant that those Board Members that had applied for credit facilities were approving their own loans,” stated the draft report.

BML board members complicit in self-approving their own credit lines include Mohamed Ahmed Didi (Sultans Group shareholder), Ahmed Hamza (Director of the VA Group), and Gasim (Chairman of the Villa Group).

Director Mohamed Adil also features prominently, being cited in one particular example of a board meeting in which he approved the re-financing of the Sultan Group’s debt at the same time as being the group’s major director/shareholder.

BML’s recovery

In the intervening years, BML wrote off multiple toxic non-performing assets and returned to profitability, largely by outright ceasing to pay dividends to shareholders for almost five years.

The Bank’s board approved a MVR 50 million (US$3.23 million) interim dividend to shareholders in July 2013, the first since 2008.

“This marks the end of a painful and challenging journey that began in 2009 when the bank reported record level non-performing loans. However, in recent years Bank of Maldives has reported record level earnings and operating profit and the company returned to profit in 2012,” read a statement from BML.

BML’s former CEO Peter Horton, a UK banker appointed in February 2011 with extensive experience tackling distressed portfolios and problem lending across Africa as part of Barclay’s corporate turnaround team, resigned in August 2013 to head up Bermuda Commercial Bank.

“The profitability and dividend payment will be sustainable going forward,” said Horton in the bank’s July statement. “This is an interim dividend and at MVR 9.29 [a share] for the half year places us in a strong position to pay the highest full year dividend in the Bank’s recent history at year end”.

Download the leaked GT report


MMA issues warning over counterfeit currency

The Maldives Monetary Authority (MMA) has warned the public to be vigilant over the circulation of counterfeit MVR 100 and MVR 500 notes.

The notes in question are said to be of inferior quality to the genuine currency, notably in terms of the paper on which they are printed, according to a statement (Dhivehi) issued by the financial body.

Members of the public who have acquired any suspicious notes are requested to bring them to the MMA to ensure they are authentic.

An official helpline, which can be reached by dialling 333 1793, has also been established for anyone with concerns over the counterfeit notes.