Government-owned company ceases Club Faru resort operations

The Maldives Tourism Development Corporation (MTDC) decided to cease operating the Club Faru resort as of May 15 this year, according to local media.

In January, the Tourism Ministry took control of the resort from the site’s previous owners following the expiry of their lease agreement.  The ministry handed control of the resort to the government-owned MTDC until phase two of the Hulhumale’ reclamation project was completed.

MTDC Managing Director Mohamed Matheen told local media that the Tourism Ministry had been notified to take over resort’s operations.

“There are no tourists on the island right now. We stopped the operation of the island, and have been temporarily taking care of the island until a decision is made,” Matheen said.

The MTDC previously requested an extension from the Tourism Ministry to the time period during which the company could operate the resort.

“We wanted to operate the island until the reclamation of Hulhumale’ begins. Even though we let tourists come to the resort, our plan was to empty and hand over the island by giving one month’s notice,” said Matheen.

“But we still don’t know when the reclamation will begin. But we have to keep some staff there to monitor the island until the government takes over,” he added.

Currently, the number of staff on Club Faru has been reduced to “about twenty”, according to Matheen.

Discussions with two foreign companies regarding phase two of the Hulhumale’ reclamation project – which includes Club Faru resort – are ongoing, according to the Housing Development Corporation (HDC).  The HDC is in charge of the Hulhumale’ development.


Maldives Tourism Development Corporation (MTDC) Chairman resigns from post

Maldives Tourism Development Corporation (MTDC) Chairman Faseeh Zahir, who was appointed to the post in 2012, tendered his resignation last week without indicating a reason, reports local media.

Zahir’s resignation follows a disagreement between MTCD and Club Faru management – a resort recently taken over by government-owned MTDC – that led to a “series of complications” after the Tourism Ministry “interfered,” claims an MTDC official.

Zahir’s predecessor, former MTDC Chairman Mohamed Rasheed, resigned from the post in June 2012, a month after his appointment.


Artur brothers “direct threat to national security”: MP Fahmy

Parliament passed an extraordinary motion today (April 2) expressing concern that cabinet ministers’ connections to the Artur brothers posed a “direct threat to national security”.

Police meanwhile revealed they became aware of the Artur brothers presence in the Maldives in January, and launched an investigation to determine if they had been conducting any illegal activities in the country.

Police Spokesperson Chief Inspector Hassan Haneef told Minivan News police had contacted “relevant government authorities” in January to inform them of the Artur brothers’ links to drug trafficking, money laundering, raids on media outlets, dealings with senior government officials and other serious crimes in Kenya.

He was reluctant to share any further details given that “this is still an open case under investigation”.

Minivan News understands that relevant authorities, including the Maldives National Defense Force (MNDF), Ministry of Home Affairs, and the President’s Office were officially informed in January of the presence of the Artur brothers, even as Tourism Minister Ahmed Adheeb signed a letter seeking residency permits for the pair.

Immigration Controller Mohamed Ali told local media that Artur Sargasyan left the Maldives on Sunday (March 31). Sargasyan first entered the Maldives on a tourist visa in August 2012 and returned again in October, Ali said. Sargasyan’s associate is still in the Maldives at a resort in Male’ Atoll, Ali told local media.

Photos of the Arturs in the company of Adheeb and Defense Minister Mohamed Nazim emerged on social media over the weekend, apparently taken during the Piston Motor Racing Challenge held on Hulhumale’ between January 25 and 26.

One photo showed Artur Sargsyan next to Adheeb and Nazim, while another has him apparently starting one of the motorcycle races at the event, which was organised by the Maldivian National Defence Force (MNDF). Another image showed Sargsyan at the red carpet opening for the Olympus Cinema.

Meanwhile the Artur’s US$6000 bill at the Club Faru resort – recently taken over by the government-owned Maldives Tourism Development Corporation (MTDC) – was paid by a ”top official of the resort management”, according to Haveeru.

Picking up the story today, Kenyan media reported that the brothers’ practice of publicly ingratiating themselves with senior government officials appeared not to have changed.

“The Arturs’ mode of operation where they show up in the company of top and well-connected government leaders appears to have been replicated in the Maldives. Their presence in the Maldives comes days after ousted leader Mohammed Nasheed expressed fear over his life,” reported Kenya’s Daily Nation publication.

Parliament concerned about connections with cabinet ministers

Maldivian Democratic Party (MDP) MP Imthiyaz Fahmy submitted the motion to parliament to raise concerns about the Artur brothers’ presence in the country and their possible connections with Nazim and Adheeb.

“The Artur brothers are a direct threat to national security since they are – true to their old style and from the experiences of other countries – directly linked to the top government officials including Mr Mohamed Nazim who is both the Defense Minister and the acting Transport Minister, as well as Mr Ahmed Adheeb who is the Tourism Minister,” Fahmy told Minivan News.

“These are the most crucial government ministries with which the Artur brothers are looking to have special links to achieve their objectives,” he contended.

Fahmy said the Artur brothers were believed to have carried out “all sorts of serious illegal activities internationally” and that the Maldives “is incapable of handling these notorious conmen from Armenia. They are capable of taking local criminal gangs to different heights.”

Fahmy explained that immigration laws do not permit entry into the Maldives if the visitor is “even suspected” of being involved in human smuggling or trafficking; may be [considered] a national threat, or otherwise may commit crimes against the state.”

“Given all these facts – and that the Artur brothers are  world-infamous for carrying out criminal activities of this sort – they were allowed into the country and seen publicly with top government officials,” Fahmy added, alleging that the pair have three meetings with Adheeb and Nazim on Hulhumale’ and on Club Faru.

National security concerns politicised

While the extraordinary motion passed with 27 votes in favour to 10 against,  most MPs from non-MDP parties “were not in favor of this serious issue”, Fahmy claimed.

The Parliamentary Committee on National Security will “seriously look into the matter”, however because it is not an MDP-majority committee, Fahmy believes said it would not be easy for the opposition to hold Nazim and Adheeb accountable.

“You could see how much the Artur brothers have penetrated into the parliament from the number of no votes for this motion today,” he claimed.

During today’s parliamentary debate the MDP was accused of being connected with the Artur brothers by MPs, who claimed the Maldivian shareholder in a company registered by the brothers was affiliated with the party.

Ismail Waseem of H. Ever Chance was listed as holding a 3 percent share in ‘Artur Brothers World Connections’, registered in the Maldives in October 2012.

Waseem’s share was subsequently transferred to Abdulla Shaffath of H. Ever Peace on November 25.

“No member holding a position in the party has anything to do with the Artur brothers,” Fahmy claimed. “Instead President Dr Waheed Hassan Manik, or his top government officials, are known to have been directly involved with them. It is this coup-government that has brought those conmen into this country,” Fahmy said.

Today’s parliamentary session was prolonged for an additional hour due to the extraordinary motion submitted.


Defense Minister Nazim and Tourism Minister Adheeb have meanwhile denied any involvement with infamous pair of Armenian brothers.

“I came to know about them after the rumours started spreading on social media networks. But no country had informed of us anything officially,” local media reported Nazim as saying.

“To my knowledge those two men have left the Maldives,” he said.

Adheeb acknowledged meeting the brothers during the Piston Cup event, but bemoaned to Haveeru how “information about this issue is being spread by the media rather negatively. I have no links with them.”

Speaking to Minivan News, Adheeb reiterated that he had no personal links with the Artur brothers, whom he said had now left the country on his recommendation.

According to Adheeb, the Artur brothers had previously invested in the country through a registered joint venture company with members of the opposition Maldivian Democratic Party (MDP).

Adheeb said he “advised them to leave peacefully and they agreed to sort out their visa and leave. They have now left.”


Stalled hotel development costing MVR 24 million annually: MTDC

Over MVR 24 million (US$1.5 million) is being lost annually by the Maldives Tourism Development Corporation (MTDC) on a stagnant hotel development in Uligamu in Haa Alif Atoll, it has been revealed.

MTDC Managing Director Mohamed Matheen told Minivan News that the corporation had been making losses on the City Hotel development after construction was halted half way into the project in 2010.

Matheen revealed that along with the City Hotel project – which had cost MVR 120 million (US$ 7.8 million) to develop it to its present state – MTDC’s Herethera Resort had also made a MVR 386 million (US$25 million) loss.

The land for City Hotel was leased to MTDC by the government on February 27, 2007, after which construction on the 100-bed hotel began. According to the 2010 annual report by MTDC, the project was halted after just 40 percent of the development had been completed.

“There have been certain issues to contend with in the project’s development. We have had some difficulties in attracting investors because of the US$1.5 million land rent and problems with the possibility of serving alcohol on the island.

“The previous board of directors had decided to terminate the contract as the land rent is costing too much. However I have made a lot of progress in trying to change that, and City Hotel can be completed by the end of this year,” Matheen claimed.

According to the MTDC website, the Maldives government has leased nine islands to the company “at a rate substantially below the market rate”. MTDC’s 2008 annual report stated that the company has over 21,000 shareholders making it one of the largest public companies in the Maldives.

In November last year, shareholders of MTDC expressed concern after the company failed to pay dividends for three consecutive years while also recording a net loss for the first time in 2011, local media reported.

Minivan News visited the City Hotel development last month with a surveyor who had worked and lived on the site in 2009.

Minivan News witnessed that the entire development, including the inside of staff and residential quarters, had become overgrown with vegetation. Assorted earth-moving machinery was idle and in disrepair.

The MTDC Managing Director stated that MVR 80,000 (US$5,181) per month – MVR 960,000 (US$ 62,176) per year – is currently being spent on the “upkeep” of the development.

“We have 14 people looking after this facility, but it seems they are not able to keep the overgrowth down.

“With another seven to eight million dollars this development would be complete. It won’t cost us much to remove the overgrowth and the rooms were already completed to their rafters. It would involve minor repairs,” Matheen added.

According to the former surveyor – speaking on condition of anonymity –  construction was halted due to external pressures from conservative religious groups regarding the sale of alcohol on an inhabited island.

Asked about this issue, Matheen said discussions had taken place with native islands , however they were “divided” on the issue of alcohol sale.

“The bread and butter of the Maldives is definitely tourism. We are maintaining [Maldivians’] livelihood through tourism, and tourists want different products other than just sun and sand.

“Ninety-nine percent of tourists are drinkers, they are not coming here for many activities, and they are coming for relaxation and peace of mind. We have to cater to their needs,” Matheen added.

A committee formed by Uligamu islanders had submitted a court case regarding the halted development, according to Matheen.

“The island committee is not happy. They also think the development is controlled by the government when the majority is controlled by public shareholders. The government is not a major shareholder.

“The case is a pressure tactic. They think we have the money and they think we are purposefully not building here. They don’t accept the reality of the situation,” Matheen added.

In January 2012, local media reported that five people have been arrested in a youth-led demonstration at Uligamu against MTDC.

The protestors had demanded a reason as to why the development of the City Hotel had ceased, according to local media reports.

Matheen said that he was attempting to reduce the land rent costs as stipulated in the Tourism Act and that a new survey report of Uligamu is to be submitted this year.

US$25 million loss in Herethera Resort

Herethera resort – owned and operated by MTDC – was also said to have made a US$25 million loss following a series of “logistical issues”, Matheen said.

“We had pumped US$53 million into Herethera, however we are paying US$2 million in land lease and our operating costs are nearly 17 percent higher than resorts in the Male’ area because of location being so far away.

“When I took over this role in July, we did not have a single booking at the resort. Now we are fully booked until February 17,” Matheen said.

The MTDC Managing Director revealed that while no other resorts owned by MTDC are currently working at a loss, he admitted that because of the locations of the properties in the far south and far north, there were certain infrastructure issues.

Last month the bidding period for the management or purchase of Herethera Resort was been extended for the third time by the MTDC.

The company has not stated why the bidding period prior to this one ceased, but in previous instances the company said it had to cancel bids due to a lack of interest from potential investors.

ONYX, a company from Thailand, managed the resort until February 2012.


MTDC share price lowered from MVR100 to MVR10

The Maldives Tourism Development Corporation (MTDC) has approved lowering the face value of its shares from MVR 100 (US$6.5) to MVR 10 (US$0.65) at the government company’s annual general meeting (AGM) on Tuesday night, reports Sun Online.

Following the decision, each share previously purchased would become ten shares. A proposal to hold an extraordinary meeting of shareholders within the next three months to made amendments to the company’s regulations was also approved at the 2011 AGM.

MTDC meanwhile reported an annual loss of US$3.8 million in 2011 and dividends were not distributed to shareholders.

MTDC was formed in 2006 to develop 15 resorts across the country.


Bank of Maldives and MTDC at risk of trading penalties over AGM delays: Stock Exchange

The Maldives Stock Exchange (MSE) has warned that the Bank of Maldives (BML) and the Maldives Tourism Development Corporation (MTDC) could both face trading restrictions over an ongoing failure to hold their respective annual general meetings (AGMs).

MSE CEO and Managing Director Hassan Manik told Minivan News that both companies had yesterday received final notices to hold their AGMs as soon as possible, after previously failing to hold the meetings no later than five months from the end of the financial year.

Both companies are now said to have agreed to announce dates within the next seven days for when the respective AGMs will be held, according to the MSE.

Manik stressed that under the MSE’s listing guidelines, failure by a company to hold an AGM within the required deadline could see it facing penalties including being suspended from trading securities.

“We have communicated to both companies to hold their AGMs as soon as possible. This is the first time we have gone public with such an announcement, but we want to make sure these companies are providing timely information,” he said. “Both have commented that they will be publicly declaring a date for their meetings within a week.”

According to Manik, while companies listed on the stock exchange regularly were unable to hold their AGMs within the required time period, he maintained that all groups listed were trying to meet the deadline outlined in its listing rules.

However, he claimed that in the case of both the MTDC and BML, it had been “a long-time” since the respective deadlines had passed, adding that both groups’ shareholders should be made aware of their operatons.

A BML spokesperson told Minivan News today that the failure to have held its AGM had been the result of delays in appointing board members  to the company.

“We have kept both the MSE and the Capital Market Development Authority (CMDA) informed about this matter, ” the spokesperson said.  “We are expecting to announce a date for our AG tomorrow.”

A spokesperson for the MTDC was not responding to calls at the time of press.

Local media has reported that the MSE has now set a deadline for both companes to hold their AGMs by October 24 or face action under its listing rules.

CMDA fines

Back in May, the MTDC, BML and the State Trading Organisation (STO) were all fined by the CMDA after they failed to publish quarterly reports and financial statements for their operations within an allotted time period.

The MTDC and the BML were each fined up to Rf30,000 for failing to publish annual financial statements as stipulated under the regulations. The statistics must be published within four months after the end of a financial year.

The companies had requested for deadline extension citing difficulties in producing the report within the given time frame, CMDA said. However the extension was not granted as the reasons provided were not acceptable, the authority claimed at the time.