Tag: news

Government paying Grant Thornton £4.6 million to halt STO oil trade investigation

The Maldivian government has reportedly been paying millions of dollars in penalty fees to forensic accountancy firm Grant Thornton, after last year terminating its contract to recover assets allegedly stolen during the 30 year regime of Maumoon Abdul Gayoom.

Under the terms of the contract, signed by the former Nasheed administration in July 2010, Grant Thornton would charge no fee for the investigation beyond costs such as flights and accommodation, instead taking a percentage of the assets recovered. At the same time, Grant Thornton was entitled to charge a penalty fee of up to US$10 million should the government terminate the investigation, such as in the event it arrived at a political deal.

One of the first acts of President Dr Mohamed Waheed’s government after 7 February 2012’s controversial transfer of power was to dissolve the Presidential Commission which had been overseeing Grant Thornton’s investigation, and terminate the agreement with the forensic accountants.

In August 2012, Attorney General Azima Shakoor issued a statement announcing that her office had received two invoices totalling US$358,000 and GBP£4.6 million from Grant Thorton, charges she claimed were for legal advice provided to Nasheed’s government.

Azima had not responded at time of press, but Finance Minister Abdulla Jihad confirmed to Minivan News last week that the government has been paying the charges, though he said he did not have the exact amounts to hand.

Minivan News understands from a source familiar with the matter that the government paid an initial GBP£1.5 million (US$2.4 million) on 24 April 2013, with the remaining amounts to be paid in monthly installments of GBP£300,000 (US$476,000) each.

According to the source, the Maldives Monetary Authority (MMA) remitted these monthly payments to Grant Thorton on May 22, June 27 and July 17.

STO and the Maldives-Burma oil trade

On 1 February 2012, a week before Nasheed’s government was toppled by opposition demonstrators and a mutinous section of the police, the Presidential Commission had forwarded a case for prosecution against Gayoom’s half-brother MP Abdulla Yameen over his alleged involvement in an oil trade of up to US$800 million with the Burmese military junta, during his time as chairman of the State Trading Organisation (STO).

“As of February 2012, Grant Thorton were ready with a criminal complaint, having obtained a number of documents relating to financial dealings from Singapore banks through court orders issued by Singapore courts,” stated Dr Ahmed Shaheed, former Foreign Minister and head of the Presidential Commission, shortly after the contract’s termination.

Yameen is contesting the presidential run-off against Nasheed on September 28. He has publicly dismissed the allegations on repeated occasions, distancing himself from the Singapore branch of the STO where the trade to Burma took place, as well as disputing any illegality in the trade.

The allegations first appeared in February 2011 in India’s The Week magazine, which described Yameen as “the kingpin” of a scheme to buy subsidised oil through STO’s branch in Singapore and sell it through a joint venture called ‘Mocom Trading’ to the Burmese military junta at a black market premium price.

That article drew heavily on a leaked draft of an investigation report by Grant Thorton, dissecting the contents of three hard drives containing financial information regarding transactions from 2002 to 2008. No digital data was available before 2002, and the paper trail was described as “hazy”.

Grilled by parliament’s National Security Committee over the matter in November 2011, Yameen denied any involvement in “micro-management” of STO subsidiary companies during his time as chairman until 2005.

Jumhooree Party vows to reopen investigation

In the lead up to the first round of the presidential election – in which the Jumhoree Party (JP) narrowly missed second place in the run-off to Yameen – JP vice presidential candidate Dr Hassan Saeed vowed to “reopen” the investigation into the STO oil case “as an issue of the highest priority.”

Dr Saeed was President Waheed’s Special Advisor at the time the Presidential Commission was dissolved, and the Grant Thornton contract terminated.

“Abdulla Yameen’s case was started under the previous government. While it was being investigated this government came into office, canceled the contract [with Grant Thornton] and paid 4.6 million pounds on the condition that it not proceed with the investigation, of which a large portion has now been paid,” Dr Saeed declared, during a press conference on August 31.

Saeed claimed that Grant Thornton attempted to communicate with Dr Waheed’s administration regarding the investigation but had received no reply. The accounting firm therefore decided that the contract was at an end and hired a debt collection agency, he revealed.

Asked by media if he had any role in terminating the contract as Waheed’s special advisor, Saeed claimed the contract was already cancelled when he became aware of it.

He further claimed that Dr Waheed was forced to reappoint STO Maldives Singapore Pvt Ltd and Maldives National Oil Company (MNOC) Managing Director Ahmed Muneez because of “pressure from Yameen.”

“Dr Waheed said he had to do it because of extreme pressure from Yameen,” Saeed said.

President Waheed, who polled 5.13 percent in the vote, has since declared he will back Yameen in the second round of the presidential election.

“I say this because in my opinion, the best path for this country cannot be the weakening of the constitutional framework, breaking the law, arson, or the creation of conflict,” Waheed said, explaining his decision to back Yameen in a statement published on the President’s Office website.

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UK, EU praise “transparent and competitive” election, as High Court accepts JP case

The UK and EU have both issued statements praising the conduct of Saturday’s presidential election, describing them as “transparent and competitive”.

EU High Representative Catherine Ashton “congratulates the people of the Maldives on the first round of voting in their presidential elections, which international observers have recognised as inclusive and competitive,” read a statement issued by the EU’s representation in Colombo, Sri Lanka.

“The very high level of voter participation demonstrates the commitment of Maldivians to the democratic process. Campaigning was peaceful and the elections were well run,” the statement added.

The UK’s Parliamentary Under Secretary of State for the Foreign and Commonwealth Office (FCO), Alistair Burt, also praised the conduct of the election.

“Election observers, both domestic and international, have broadly agreed that the election was transparent and competitive. The UK’s election observers were also pleased to see that proceedings ran smoothly, and that the atmosphere was one of excitement and anticipation,” Burt stated.

“The exceptionally high turnout – estimated to be around 88 percent – demonstrates a significant public enthusiasm and support for democracy in Maldives. I hope political parties will honour this democratic engagement by working together in order to further consolidate democratic institutions in Maldives,” he stated.

“I hope that the second round of elections on 28 September, and the transition to post-electoral politics, will also be free, fair and credible,” Burt concluded.

The US and India have also previously issued statements on the polls, particularly noting the peaceful voting throughout the day and preparedness of the Elections Commission.

Local NGO Transparency Maldives – which ran the most comprehensive observation operation on the day – also announced prior to the release of the provisional results that none of the incidents reported on election day would have a “material impact on the outcome of the election”.

At the same time, the High Court has accepted a case submitted by the Jumhoree Party (JP) contesting the election results and seeking the release of voters’ lists and ballot box sheets by the Elections Commission.

The party’s candidate, Gasim Ibrahim, came third in Saturday’s vote with 24 per cent, narrowly missing a place in the run-off on September 28. He has refused to accept the election result.

“I will be taking the oath [of office] on 11 November,” Gasim declared at a recent rally held at Maafannu Kunooz.

“I am saying I believe I was in first place. Different result reports on different media shows there were many, immense issues,” he told a subsequent press conference.

The High Court yesterday rejected the party’s first submission of the case.

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Q&A: Former President Mohamed Nasheed

Former President and Maldivian Democratic Party (MDP) presidential candidate Mohamed Nasheed is signing 1400 letters an hour in an attempt to mail a personalised letter to every single one of the Maldives’ 239,593 voters before Saturday’s election.

“He insisted on signing each one personally,” sighed a party official.

Nasheed continued this feat during a series of ‘one on one’ interviews with local and international media on Wednesday afternoon.

JJ Robinson: What’s with the letters?

Mohamed Nasheed: Our whole campaign has been very personal. I’m trying to reach out to the normal Maldives person. I’ve met them, I’ve touched them, I’ve visited their homes, and finally I want to write them a letter. When I’m signing them, I’m looking at the homes. I know who I am signing it to. I like that. I don’t think a printed version is appropriate.

I think the whole democratic idea is built on very Roman principles: individuals getting together and talking about things. When you go into mass media and mass organisation you lose the sense of doing something for a person. I think in good politics you do things for individuals.

JJR: The last time you came to power you were magnanimous in victory. You’ve since said this was a romantic idea that did not work in practice. How will you approach it this time if elected?

MN: I don’t think I can change overnight. I’ll still be the same person. I think it’s not viciousness that will bring justice. It is a process. We must strengthen the institutions, especially the Judicial Services Commission (JSC), the judiciary, especially the institutions associated with rule of law. We must increase their capacity to do things and reform them.

I would not come between any investigation of suspected wrongdoing. I think the main perpetrators must be brought to justice. Then again, it is very difficult to do these things to your political opponents. You are always mindful that if you stultify your position, that is not a good recipe for a vibrant democratic society.

Now it is getting very obvious that these opposing parties will come out with new leadership after these elections. I hope that the wrong-doers are brought to justice.

JJR: Given the immediate state of the police and judiciary, how do you propose such an investigation would be conducted?

MN: Well I’ve written to all the policemen and MNDF personally. The vast majority of them seem to believe that the coup was very, very wrong, and that their institutions got a very bad name out of it and they need to salvage their [institutions].

I feel there are enough people within these institutions who are of this view and want to investigate the wrongdoing. Previously when we were in government there was nobody [in the police or military] who wanted to reform this vigorously. But if you look at the top brass of the police, they may be out now, but I don’t think they should be outside. We will bring them in. I think they are very clear in their minds about what needs to be done.

JJR: Observers are asking how, even if you do return to power and given how swiftly your government fell on February 7, you propose preventing that from happening again?

MN: One thing is – the international community should not so be so naive or short-sighted. Please don’t fund coups. Please don’t encourage forceful change of government.

What we saw was a lot of evidence that the UN was busy at it. Instability comes because outsiders side with one faction or another. Just don’t do that.

JJR: What do you mean when you say the UN was ‘busy at it’?

MN: The [now reassigned] UN Resident Coordinator’s safety address in case of an issue on February 7 was the Vice President’s residence. I was shocked to learn that.

I felt the UN specifically wanted to recognise the new regime instead of conducting a proper investigation. They dragged the investigation out until they could cover it up. From the evidence we saw afterwards, especially from the government accountability committee in parliament, it is obvious it was a coup, and it is obvious that anyone should have seen it as a coup.

We should have gone for an early election instantly. We should not legitimise any forceful transfer of power. Right now the situation is that everyone believes ‘winner takes all’. [The impression is that] if you are the ruler, the UN and international community won’t give two thoughts about that and simply recognise whoever is holding power. That kind of attitude doesn’t help.

JJR: If you had the whole February 7 period again, on reflection is there anything you would have done differently?

MN: On the 7th? No. If you’re specifically talking about that day, no. In the lead up to it, yes. We have learned a lot of lessons from what led to this, the political nature of the police and military, and elements of the international community taking sides.

JJR: Many MDP supporters privately profess a sense of doom should you not win. Are the stakes really that high, and what sort of challenges do you think you would have in opposition?

MN: There is no doubt [we will not not win]. Not even entertaining that thought.

JJR: Given the high stakes then, what kind of concerns then do you have for the transition period of nearly two months?

MN: About a month back I had some concerns. But now I think there is enough inertia among the people so that this can be brought into proper alignment. There’s not a lot [the government] could do. I don’t see the military being able to do anything. There is enough support for us within the military, there is enough support for us within the police, it’s just the top brass [of concern], and they won’t have support among the rank and file. So we are fairly confident.

JJR: A lot of young Maldivians, particularly those aged between 18-25, those perhaps without direct experience of Gayoom’s rule in the 80s and 90s, give the impression of being politically apathetic. What kind of message would you give to these politically disengaged?

MN: Get involved. If you are not involved, you better not complain.

This is a multi-party participatory democracy, and there is room for everyone to make their views heard and get involved. I’m very encouraged that during these elections the bulk of the MDP’s campaign machinery has been run by young people. There’s a lot of people who are very involved.

Very often when your own personal viewpoint does not have resonance, you tend to become apathetic. It is not that you are politically apathetic, just that you sense that your viewpoint is not represented, so you go home.

We suggest – don’t do that. Come to us. We have room, and your voice is very, very necessary. And we need it.

JJR: Given that your government’s detention of the Criminal Court judge and efforts toward judicial reform were used to justify the protests in the lead up to February 7, how can you reform the judiciary from the position of the executive without risking this happening again, or without compromising the integrity of the three arms of state?

MN: We must reform the JSC. The police must have enough leverage to investigate wrongdoing. The police were aware of the brewing coup but were not able to investigate it. The Criminal Court was always obstructing that investigation. Primarily that was why the police felt that Abdulla Mohamed was a threat to national security.

In hindsight it was easy to understand why police were saying that, because left alone they felt there would be a coup. If the investigation was not done, and if these people were not apprehended, then police felt there would be a military coup. That is why they wanted to restrain certain elements.

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Government scuttles Male City Council’s Taiwanese sister city agreement, pledges support for “one-China policy”

The government has issued a statement denouncing Male’ City Council’s decision to become sister cities with Kaosiung City in Taiwan, and pledging the Maldives’ support for the “one-China policy”.

“The Government of Maldives reaffirms its commitment and support to China’s national unity and to the one-China Policy,” said the Foreign Ministry in a statement, shortly after the opposition Maldivian Democratic Party (MDP) dominated Male City Council signed the sister city agreement with a Taiwanese delegation on Sunday.

“The Maldives’ firm conviction of one-China policy is guided by the principles of respect for sovereignty, territorial integrity and non-interference in the internal affairs of states and considers Taiwan as an integral part of the People’s Republic of China,” the government stated.

An official from Taiwan’s Ministry of Foreign Affairs told the Taipei Times this was “the first time a local government’s efforts to establish sister-city ties with a foreign city had been thwarted due to apparent pressure from China.”

Mayor of Male City Council Ali Manik visited Kaohsiung in November 2012 after the city was assigned to mentor Male’ in sustainability by the international organisation of which both are members, Local Governments for Sustainability (ICLEI).

A statement from the Greater Kaohsiung government revealed the delegation had shared Taiwanese experience in the management of drainage pipeline networks, waste disposal, offshore submerged breakwaters, plant diseases, pest control and solar power development.

“The delegation also conducted a field study of Male’s construction of a rainwater sewer system, erosion-prone sea embankment and how it deals with waste disposal and processes raw kitchen waste,” reported the Taipei Times.

Mayor Manik said sister city agreements were “normal” and something almost every city in the world participated in, to promote cultural development. The Male-Kaosiung agreement, Manik said, involved “training in fields such as agriculture, mariculture, education in waste management and health related fields.”

Changing demographics

Chinese visitors now constitute 25 percent of all tourism arrivals to the Maldives, a figure that has in the past several years eclipsed the Maldives’ traditional European markets.

Resorts have had to quickly adapt to the new demographic, with resort managers noting the market heavily favours excursions and shopping over food and beverage offerings traditionally targeted towards the European audience.

Some properties have underestimated the market. In March calls for a tourism boycott of the Maldives exploded across Chinese social media networks, after allegations of discrimination against guests from China at one resort were widely circulated.

Dismissed Chinese employees of the Beach House Iruveli resort – formerly Waldorf Astoria – posted allegations on the Chinese forum Tianya that guests from the country were receiving inferior treatment to Europeans, despite paying the same prices.

The staff alleged that this discrimination extended to removing kettles from the rooms of Chinese guests, to prevent them making instant noodles in their rooms and thereby forcing them into the resort’s restaurants.

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Parliament grants elections commission further MVR 9 million

Parliament has approved a further MVR 9 million (US$584,000) to the Elections Commission, ahead of presidential elections scheduled for September, reports local media.

EC President Fuad Thaufeeq told parliament’s finance committee that the first round of the election would cost MVR 37 million (US$2.4 million) to hold, with a further MVR 17 million (US$1.1 million) needed in the event of a run-off second round.

The EC had already spent MVR 13.4 million (US$869,000) of the MVR 59 million (US$3.8 million) budget approved by parliament, he said.

The committee approved the EC’s request for a further MVR 9 million, with the EC in return pledging to cut down on costs and use ferry services where possible.

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Government halts transfer of airport operations to MIAL, pending arbitration

The government has declared that the Maldives Airports Company Limited (MACL) will continue operating Ibrahim Nasir International Airport (INIA), apparently abandoning efforts to transfer operations to the newly-created Male’ International Airport Limited (MIAL).

The President’s Office said in a brief statement today that while the government had intended MIAL to take over the airport’s operation, the decision to abandon the attempt “was was made as the termination of the contract between the government of Maldives and GMR [is] currently in the arbitration stage.”

The decision follows an increasingly fractious series of emails between MACL and Axis Bank, one of the lenders to the GMR-MAHB airport consortium which had its concession agreement to upgrade and operate the airport summarily terminated by the new administration in December 2012.

While the sudden termination of the agreement is the subject of current arbitration proceedings in Singapore, Axis Bank separately called in US$160 million worth of loans for the project which had been guaranteed by the Maldivian Finance Ministry at the time the deal was signed.

With arbitration ongoing, Axis Bank expressed concern that the creation of MIAL was an attempt to dissipate MACL’s assets ahead of a verdict and turn it into a shell company, and sought a guarantee from the government. That correspondence led to an exchange of heated letters from Singapore-based law firms representing both sides, particularly after Finance Minister Abdulla Jihad appeared to contradict earlier assurances from MACL by informing local media the transfer was expected to be completed by July 1.

MIAL’s appointed CEO Bandhu Saleem however told Minivan News at the time that “until the arbitration is complete, I think it will be very difficult to start a new company.”

Saleem is now to be appointed managing director of MACL, reported Sun Online citing a government official, with MIAL to be abolished ahead of a final decision on the matter.

Uncertainty

National political turbulence and uncertainty over the MACL-MIAL transfer in May led the global body representing the world’s airports, Airports Council International (ACI), to caution its members over the government’s potential “sale of equity in this entity to another airport operator.”

“ACI members are advised to conduct due diligence while considering any investment in the Maldives, considering the latest developments, uncertainty of outcome of elections, the legal and financial risks of the current arbitration and the nascent legal framework,” the email stated, warning potential investors that “any leadership changes arising out of the elections [could] have a material impact of the future of the Male’ airport and the decision of expropriation.”

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No intention to transfer assets to MIAL: MACL to Axis Bank

The Maldives Airports Company Limited (MACL) and its lawyers have denied any intention of dissipating the state-owned company’s assets by transferring them to a newly-created, state-owned entity called Male’ International Airport Limited (MIAL).

MACL and the government of the Maldives are currently party to arbitration proceedings in Singapore after one of the lenders to the terminated GMR-Malaysia Airports (GMR-MAHB) development – Mumbai-based Axis Bank – called in US$160 million worth of loans which had been guaranteed by the Ministry of Finance.

A copy of the agreement from November 24, 2010, in which the Ministry of Finance guarantees the loans to GMR-MAHB, is signed and stamped by both then-MACL Chairman Ibrahim Saleem and Finance Minister Ali Hashim on behalf of the government.

Eviction and arbitration

In December 2012, the GMR-MAHB consortium, which had signed a 25 year concession agreement with the former government to manage and upgrade Male’s airport, was given a seven day eviction notice by the new government after it declared the concession agreement void ab initio, or ‘invalid from the outset’.

That decision is currently subject to arbitration proceedings in Singapore, with GMR-MAHB’s compensation claim expected to reach upward of US$1 billion. Axis Bank is pursuing the US$160 million in separate proceedings.

President Waheed’s government on March 14 meanwhile declared in a one-line statement that it was establishing MIAL as a new 100 percent state-owned company, and several weeks later announced the appointment of a board of directors including tourism tycoon and Chairman of Universal Enterprises, Mohamed Umar Manik, and Island Aviation Chairman Bandhu Ibrahim Saleem as managing director.

Finance Minister Abdulla Jihad informed local media on May 21 that MIAL would take over the operation of the airport under a management contract by July.

The apparent move to transfer MACL’s management functions to MACL led to a flurry of letters from Axis Bank to both MACL and the government, with the bank expressing concern that “if MACL ceases to manage and operate Male’ airport, and MIAL instead performs that role, then MACL will lose almost all of MACL’s revenue stream, and become a shell.”

MACL’s denial

In a letter responding to Axis Bank’s CEO Bimal Bhattacharyya, dated April 24, 2013, and obtained by Minivan News, MACL’s Managing Director Ibrahim Mahfooz claims “your insinuation that MACL is attempting to dissipate assets to avoid and satisfaction of any judgement is insulting and without any basis.”

“For the record, we can confirm that MACL has no plans to transfer any of its assets to another company,” Mahfooz writes.

He accuses Axis Bank of making a case on “hearsay and speculation”, and asks whether its threat of legal action was “part of a concerted plan with any other parties”.

“You have tried to assert that your claim of US$163,596,347.78 remains unsatisfied. We had in our previous correspondence to you made it clear that you do not have a valid claim against MACL,” Mahfooz states.

“At best your alleged claim (at its highest) is purely a monetary claim against MACL and GOM. Please set out clearly the basis in which you think your claim will not be satisfied by MACL and GOM in the event Axis Bank is not successful,” he writes.

That letter triggered a further flurry of correspondence between Axis Bank’s legal representation Norton Rose and MACL’s Singapore-based firm Advocatus.

The latter firm, acting on behalf on MACL in December 2012, successfully overturned an injunction in the Singapore Supreme Court blocking MACL from taking over the airport, on the grounds that the arbitration court had no jurisdiction to prevent the Maldives as a sovereign state from expropriating the airport.

In the Singapore Supreme Court’s full verdict, a copy of which Minivan News has obtained, Financial Controller for the Ministry of Finance, Mohamed Ahmed, “affirmed in an affidavit that the Maldives government would honour any valid and legitimate claim against it. He also stressed that the Maldives government had never defaulted on any of its payments.”

Lawyer representing MACL, Christopher Anand Daniel, “also accepted that if the arbitration tribunal found that the Appellants were wrong in their asserted case that the Concession Agreement was void ab initio and/or had been frustrated, but the Appellants had by then already gone ahead with the taking over of the airport, they would at least be liable to compensate the respondent for having expropriated the airport” (emphasis retained).

Legal barrage

Stern letters exchanged throughout late April and most of May between the two sets of lawyers suggest brewing disagreement over whether MIAL’s assumption of management responsibilities for the airport can be construed as a transfer of assets and an attempt to dissipate its assets in preparation for a costly verdict.

“Almost all of MACL’s income comes from MACL’s management and/or operation of Male’ Airport,” notes Axis Bank.

“The stated purpose for the incorporation of MIAL is for MIAL to manage and operate Male Airport. This is a role presently performed by MACL. The natural consequence of the above facts is that if MACL ceases to manage and operate Male’ Airport and MIAL instead performs that role, then MACL will lose almost all of MACL’s revenue stream, and become a shell company,” Axis Bank’s lawyers noted, adding that the government had made no effort to deny this despite repeated invitations.

In response Advocatus, in a letter dated May 10 and obtained by Minivan News, declared “Your client [Axis Bank] has no evidence that MACL is dissipating assets to begin with. It is obvious that your client is attempting to see if it can create a case by correspondence when it has none.”

Following Finance Minister Abdulla Jihad’s pledge that the transfer of assets to MIAL would be completed by July 1, widely reported in local media, Norton Rose wrote another letter noting “[the Minister’s] statements are in direct contradiction to MACL’s position in its letter of April 24 stating that ‘For the record, we can confirm that MACL has no plans to transfer any of its assets to another company.’”

“These new developments, stated in the various news reports, lend credence to Axis Bank’s legitimate concerns that MACL is in fact attempting to dissipate its assets in favour of MIAL or any other third party and, consequently, there will not be sufficient assets to satisfy any arbitral award that may be rendered in favour of Axis Bank against MACL in the arbitration,” the lawyers wrote.

Advocatus responded on May 29, again accusing Axis Bank off “desperately trying to create a case where none exists.”

“The Minister, who had given the interview in Dhivehi, had been misquoted in the English version of news reports you mentioned,” MACL’s lawyers stated.

“When he gave the interview, the Minister had in fact said that ‘asset management is going to be officially handed over to MIAL’,” Advocatus contended.

Assets, management and the draft agreement

Meanwhile, a working draft of an ‘Operations and Management’ agreement between MACL and MIAL, dated May 21 and obtained by Minivan News, notes that MIAL “is a company established with the primary objectives of operating, maintaining and managing the airport.”

The agreement states that while the Finance Ministry has granted MACL the lease of the site and rights to operate and manage the airport, “MACL, in the interest of the better management of the airport, and/or overall public interest, is desirous of granting to MIAL the functions of operating, maintaining and managing the airport.”

The agreement includes provision for the transfer of employees from MACL to the new company, and the requirement that it obtain an aerodrome certificate from the Ministry of Civil Aviation – the core authority issued by the state for a company to operate an airport.

It also noted that “no proceedings against MIAL are pending or threatened, and no fact or circumstance exists which may give rise to such proceedings that would adversely affect the performance of its obligations under this agreement.”

MIAL would be paid management fees by MACL, although the extent of these are not included in the particular draft obtained by Minivan News. The agreement does however set out how “MIAL shall, on behalf of MACL, deposit all monies received from the operation of the airport into one or more bank accounts in the name of MACL.”

Board issues

Despite the Finance Minister’s comments on May 21, MIAL’s appointed CEO Bandhu Saleem has told Minivan News that “until the arbitration is complete, I think it will be very difficult to start a new company.”

Minivan News is seeking to establish the current status of the new company. However further obstacles appeared this week in the form of the government’s Attorney General Aishath Bisham, who informed local media that President Waheed lacked the authority to appoint the boards of government-owned companies following the ratification of January’s Privatisation Act.

Instead, she said, the privatisation board created under that act operated as “a separate legal entity, and has the sole authority to appoint board members.”

Besides MIAL, President Waheed also in February appointed the board of the Maldives Ports Authority Limited (MPL).

“The Privatisation Board should investigate those cases,” suggested the attorney general.

Former President Maumoon Abdul Gayoom, whose Progressive Party of the Maldives (PPM) was among the most strident opponents to GMR-MAHB’s development of the airport, meanwhile appeared to have adopted a conciliatory tone during a visit to India last week to smooth troubled relations.

“[The cancellation] was a very populist move at the time as the public had a perception that the contract was bad for the country. The way it was handled was not good,” Gayoom was reported as telling Indian newspaper The Hindu.

“I am sad that this has somehow affected our bilateral relations. We want to overcome that and restore our relationship with India to its former level,” Gayoom told the paper.

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India getting tough on Waheed government: Business Standard

There is much more energy this February in doing the right thing by the Maldivians, unlike last February when Delhi deemed the transfer of power or coup from Mohamed Nasheed to Mohamed Waheed to be legitimate, writes Jyoti Malhotra for the Business Standard.

Certainly, the ongoing struggle for power in Maldives constitutes one of the most interesting stories in South Asia. A former bureaucrat in the United Nations and the first Maldivian to have studied at Stanford University, Waheed inveigled himself to the top job last year by allowing the former Maldivian president, Abdul Maumoon Gayoom, to play puppeteer.

When Nasheed, a charismatic and democratically elected president, had a judge arrested for a repeatedly biased record in January 2012, Gayoom had Waheed waiting in the wings to replace Nasheed. The Maldivian security forces played their part by overthrowing Nasheed.

A whole year later, Delhi has sought to make amends. Nasheed was invited to visit India on an official visit earlier this month, when he met National Security Adviser Shiv Shankar Menon. On his return from Argentina, external affairs minister Salman Khurshid has been in regular touch with him, as well as other actors in Maldives. Last week, the ministry of external affairs stated the Waheed government should hold a free, fair and credible election in September, implying Nasheed should be allowed to participate in it; if he was arrested, he would be effectively eliminated from the election.

Rumours are afoot that India’s outgoing high commissioner, D M Mulay, was summoned to the Maldivian foreign office and scolded for allowing external interference inside the high commission, a reference to hosting Nasheed. A second and more important rumour is about a possible compromise between Nasheed and the judiciary; either charges could be withdrawn against Nasheed or these could be deferred until after the elections are held on September 7 or Nasheed could be tried in absentia and sentenced.

Some say the Indian government could press Waheed and the power behind the throne, former dictator Gayoom, to drop charges against Nasheed because they have seen through the game both have played over the past year. India and the world know Maldives has barely enough money to import a month’s worth of foodstuff and other essential commodities. The idea of economic sanctions has sometimes been known to work wonders.

Read more

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Comment: What after Nasheed’s ‘refuge’ in Indian mission?

The comparison sounds curious, though not odious. Possibly taking a leaf out of Wikileaks boss Julain Assange’s tactic, former Maldives President Mohamed Nasheed has ‘taken refuge’ in the Indian High Commission in the national capital of Male, expressing concern over his personal ‘security’ and ‘regional stability’.

The comparison should however stop there, as Ecuador has since granted political asylum in its London Embassy, to help Assange avert arrest and deportation to face a criminal trial. No such request seems to have been made by Nasheed to India, nor has a situation seemed to have emerged for New Delhi to consider any such request at the moment.

“Mindful of my own security and stability in the Indian Ocean, I have taken refuge at the Indian High Commission in Maldives,” Nasheed tweeted a day after the suburban Hulhumale’ criminal court issued an arrest warrant for him to be produced before it. The warrant followed Nasheed not appearing before the court on Sunday, February 10, for standing trial on the charge of ordering the illegal arrest of Criminal Court Chief Justice Abdulla Mohammed on January 16 last year, when he was the President.

Nasheed had been to India after obtaining court’s permission and had overstayed the period during the previous visit, with his lawyers seeking further time from the three-Judge bench. Incidentally, this is the second time in five months that Nasheed had not appeared before the trial court when summoned. On October 1, the day he was to appear before the court, he proceeded on a long campaign tour of the southern atolls. The court later ordered his appearance, and had the police arrest him from a southern island, and let him off after recording his forced appearance.

The current development has raised a number of issues, legal, political and diplomatic. With presidential polls due in September this year, Nasheed would be disqualified from contesting the same if the court ordered his imprisonment or banishment for three years. The alternative penalty is MVR 2,000. The fine does not attract disqualification but an imprisonment of over a year does.

Despite all-round apprehensions about an inevitable term of imprisonment for Nasheed and the other three accused, the trial had not reached the substantive stage, for the defence team to hazard a guess about the possible quantum of punishment. The best case scenario for Nasheed would be his exoneration of the charges against him. In context, the prosecution would have to prove to the complete satisfaction of the trial and appeals courts that the orders for Judge Abdulla’s arrest were issued by President Nasheed personally, and they were patently illegal.

Questions also remain about the possibility of the case running its full course before the Election Commission puts the poll process in motion, in July this year.

As in all democracies, there is a three-stage judicial process, involving the High Court and the Supreme Court at the appellate levels. In between, Nasheed’s defence has also been taking up procedural issues at every turn. Interlocutory petitions on his behalf have not found much favour with the appeal courts, but the intervening time involved in the process has meant that the trial and the appeal stage may elude the deadline for the elections.

The legal issue at this stage also involves the wisdom of Nasheed’s defence possibly concluding that the arrest and production of Nasheed before the trial court would entail his imminent imprisonment. If so, it is unclear if the courts would have ordered a jail term for Nasheed, whether to restrict his movement, pending the disposal of the case, or for contempt of court. There may have been a case for the court to declare him as a ‘habitual condemnor’, given that this is the second instance of the kind.

According to media reports, the Hulhumale’ court, however, has since withdrawn the arrest warrant against Nasheed. It is also unclear if the court would want to hand down any prison term, endangering Nasheed’s freedom of movement, pending the conclusion of the trial stage. This has meant that the Hulhumale’ court, in a single stroke, may have removed Nasheed’s apprehensions about personal security, at least until the disposal of the case, either at the trial stage or at the final appeals stage.

It is also unclear if either the prosecution would seek court directions to enforce Nasheed’s continued presence and cooperation from now on, or if the judges would suo motu issue binding orders. With the two-day Maldivian official weekend falling on Friday and Saturday (February 15-16), the next move of the Government, the police and the prosecution would also be watched with interest. The possibilities are many, if one considered the judicial and legal options before the various players, including Nasheed.

Indian position

Through a series of statements on February 13, New Delhi confirmed Nasheed’s presence in the Indian High Commission in Male, and his seeking ‘Indian assistance’. The statement said India was in touch with Maldivian authorities in the matter, and wanted the government in Male to ensure that the elections were free and fair, and that there was no bar on candidates were not barred from contesting the presidential polls.

In an obvious reaction to the Indian statement, the Maldivian Foreign Ministry promised to ensure the immunity of resident missions of foreign countries in Male, implying that the police would not violate what is legally ‘Indian territory’ to detain Nasheed and produce him before the Hulhumale’ court. It made a pointed reference to the independence of Maldivian judiciary, about which there was no mention in the Indian statement.

According to local media reports, Government officials, in tweeted messages, claimed that India had ‘interfered’ with the domestic affairs of the country and also the judicial processes.

The Indian concern in the matter seems to flow from the substantial, if not proven majority support-base that Nasheed and the MDP enjoys within Maldives, and the wisdom of not allowing him to contest the presidency, over a pending court case. Any domestic unrest of the kind that marked Nasheed’s exit from the presidency in February last year could have consequences for political stability in Maldives – and by extension, the immediate Indian Ocean neighbourhood.

Indications are that political Maldives is as polarized for and against Nasheed this time round as it was around incumbent President Maumoon Abdul Gayoom ahead of the first-ever multi-party presidential polls in the country in 2008. How the nation and its 242,000 voters in the country would view the ‘stability question’ and equate it to the support-base of the MDP and vote for Nasheed’s candidacy, remains to be seen. This can also have consequences to political stability nearer home, for the region and bilateral relations with India.

From within the Indian High Commission, Nasheed has reiterated his earlier demand, asking President Waheed to demit office and allow an interim administration to take over, to ensure free and fair elections for the highest constitutional office in the country. As critics point out, this also has consequences. With parliamentary polls due in May next year, will there be a similar demand by different sections of the nation’s divided polity that the new President, elected this year, and his own Vice-President, too should quit office, to ensure free and fair elections, then as is being demanded now.

Incidentally, the constitution provides for Parliament Speaker to be President for two months and conduct fresh polls from the high office, should the incumbent, along with his Vice-President, to quit office, or otherwise fall vacant. This is the possibility that Nasheed has stressed in terms of ensuring a free and fair poll for the presidency, at present. However, the Constitution does not provide for a similar situation ahead of the parliamentary polls. The argument is that what is good for the presidential polls should be good also for the parliamentary elections. Or is it?

The writer is a Senior Fellow at the Observer Research Foundation

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