Termination of misappropriated state funds investigation cost government MVR66 million

The termination of an agreement to investigate the alleged misappropriation of state funds by the regime of former President Maumoon Abdul Gayoom cost the government MVR66.17 million (US$4.2 million), a special audit report of the defunct presidential commission has revealed.

The report released last month explained that UK-based firm Grant Thornton dissolved the ‘asset tracing, recovery and repatriation’ agreement on April 30, 2012, after the Attorney General’s (AG) Office failed to respond to eight emails seeking instructions on how to proceed following the controversial transfer of presidential power on February 7, 2012.

The report noted that a settlement agreement was reached following a mediation process in March 2013 for the government to pay the forensic accountancy firm MVR64.61 million (US$4.1 million).

The government also paid MVR1.56 million (US$101,167) for legal counsel – to Eversheds LLP – employed for the arbitration process.

Following full payment of the settlement claim, the report revealed that Grant Thornton handed over all documents and information related to its investigation as well as minutes of meetings and expert findings on November 13, 2013.

The AG’s Office shared the documents with the Anti-Corruption Commission (ACC).

“As the agreement was brought to an end before Grant Thornton’s investigation was fully concluded and because the presidential commission’s investigations had noted a number of cases of suspected corruption and embezzlement when its work came to a halt, this office believes that the investigations should be completed,” the audit report stated.

The Auditor General’s Office recommended the ACC conclude the investigations commenced by Grant Thornton.

Oil trade

Former President Mohamed Nasheed formed the presidential commission in May 2009 to investigate alleged corruption during his predecessor’s 30-year reign.

The audit report noted that the commission’s investigations were mainly conducted through Grant Thornton, which included the alleged illegal oil trade involving the State Trading Organisation’s (STO) Singapore branch, the 2007 audit report of the Bank of Maldives, and asset tracing of senior government officials.

Nasheed’s vice-president, former President Dr Mohamed Waheed Hassan Manik, dissolved the presidential commission shortly after assuming office on February 7, 2012.

A week before the transfer of power, the presidential commission forwarded for prosecution a case against then-opposition MP Abdulla Yameen for his involvement in the alleged oil trade during his time as chairman of the STO.

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.

The article drew heavily on an investigation report by Grant Thornton, which obtained three hard drives containing financial information detailing transactions from 2002 to 2008.

Investigators learned that Mocom Trading was set up in February 2004 as a joint venture between STO Singapore and a Malaysian company called ‘Mocom Corporation Sdn Bhd’, with a potentially lucrative deal of selling oil to Myanmar and an authorised capital of US$1 million, it acted as a front for an international money laundering racket.

The presidential commission sought criminal charges against Yameen and two other shareholders of STO Singapore – former Managing Director of STO Mohamed Manik and former Managing Director of STO Singapore Ahmed Muneez – and asked the AG’s Office to pursue civil compensation suits.

Yameen has dismissed the allegations on several occasions and disputed the illegality of the oil trade.

“It’s perfectly legitimate. I was a perfectly clean minister while in Gayoom’s cabinet. They have nothing on me,” he told Minivan News in February 2011.

Moreover, grilled by parliament’s national security committee in November 2011, he denied any involvement in “micro-management” of STO subsidiary companies. Upon assuming office in November, President Yameen called on the ACC to investigate the allegations.

Presidential commission audit

The audit report noted that the commission tasked Grant Thornton with investigating the finances of 12 associates and relatives of former President Gayoom.

If the amount of funds or assets recovered by Grant Thornton reached £1.5 million after deducting investigating costs, the government agreed to pay 25 percent as a fee and 35 percent if the figure exceeded £1.5 million.

In July 2010, the agreement with Grant Thornton was transferred from the audit office to the AG’s Office, the report noted.

Under revised terms of the agreement, the government agreed to pay Grant Thornton 2.5 times the cost of investigation if the agreement was terminated. Additionally, consultancy fees and rates were also raised.

Auditors calculated that the government had to pay MVR20.3 million (US$1.3 million) as a result of the modification.

Among other issues highlighted in the report, the audit office noted that the commission’s expenses were not monitored either by the President’s Office or other state institutions.

Moreover, emailed invoices and bills from Grant Thornton were paid without supporting documents, the report noted.

From May 2009 t0 February 2012, auditors found that the commission spent MVR36.02 million (US$2.3 million) for its investigations.


Presidential Commission investigating alleged car accident in UK involving former President’s son

The Presidential Commission (PC) is investigating alleged misuse of state funds following an alleged car accident involving former President Maumoon Abdul Gayoom’s son, Gassan Maumoon, in Liverpool, England.

PC Spokesperson Abdulla Haseen told Minivan News today that an investigation commenced “some time ago” based on complaints and requests to look into the longstanding allegations.

“We are not saying whether it happened or not,” he stressed. “We are looking into it to determine the truth or falsehood of the allegations. We are now receiving assistance from authorities in the UK.”

He added that the PC could not reveal which authorities in England were aiding the investigation “for fear of possible interference.”

“The allegation is that there was an accident involving Gassan in Liverpool where a person was killed,” he explained, “and that state funds were illegally transferred out of the country.”

Asked if the money in question was used to post bail, Haseen said “that’s one of the things we are looking into.”

The PC spokesperson said that he could not divulge further details at this stage of the investigation.

Speaking to Minivan News, Mohamed Waheed “Wadde,” lawyer for Gayoom’s family, said that Gassan has decided to sue Haseen personally for defamation.

“We are not suing because of the investigation,” he explained. “The investigation should go ahead. We are not suing the commission. Instead we are filing a case against Haseen personally for spreading deliberate falsehoods without any proof to back it up.”

He added that the legal team had “audio of Haseen saying Gassan killed a person.”

Haseen however said that he was “confident” of defending himself in court against the defamation charges.

“If they feel anyone’s rights were violated, they are free to sue, there is no problem with that,” he said. “But what I was surprised by was their claim that the allegations were made by me personally.”

Haseen contended that his statements in the media were made in his capacity “as an employee of a lawfully formed institution.”

“All I said was that we are looking into the allegations and that an investigation is ongoing,” he said. “I didn’t say Gassan killed anyone or paid to cover it up.”

Waheed meanwhile said that the defamation case would be filed at court “next week, God willing.”

The former President’s lawyer insisted that there was “absolutely no truth” to the allegations, suggesting that the claims were part of government’s efforts to periodically attack Gayoom in the media “because they are scared of him and his rising popularity.”

“Their intention here is to hide the fact that neither the government nor the presidential commission has been able to do anything,” he said. “It is meant to hide their incompetence and keep hold of their high posts and salaries.”


High Court orders immediate release of former warden arrested over inmate torture investigation

The High Court has today ordered the immediate release of former head prison warden ‘Isthafa’ Ibrahim Mohamed Manik, citing that his arrest was unlawful and he was currently not in a position to eliminate evidence as claimed by police.

Isthafa was arrested in Male’ in connection with the investigation of photographs allegedly obtained from the Department of Penitentiary and Rehabilitation Services (DPRS) and leaked to the media, appearing  to show inmates being tortured in custody. Police obtained permission to extend his detention to 15 days from Maafushi Court on Friday.

The photos released so far include images of men tied to coconut palms, caged, and bloodied. One of the photos, of a prisoner lying on a blood-soaked mattress, has a 2001 date stamp.

The High Court ruled that Isthafa was required to be summoned to the Criminal Court because he was arrested in Male’.

The decision of the Maafushi Court was inconsistent with systems applied in such situations, and the Supreme Court’s procedures, said the High Court.

The High Court also said that the Maafushi Court warrant to extend the detention of Isthafa noted that the extension warrant was issued to prevent Ishtafa from influencing witnesses and evidence.

Inspector of Police Abdulla Nawaz confirmed in a statement to the state broadcaster MNBC that the matter involved severe cases of torture and suspected fatalities, and had been passed to police.

Isthafa was summoned for questioning by police in March in mid-March 2011, regarding an undisclosed investigation.

Local media reports citing unnamed sources at the time claimed Isthafa had been summoned to clarify information surround the possible death in custody of a prison inmate named Abdulla Anees.

Abdulla Anees of Vaavu Keyodhoo Bashigasdhosuge, was an inmate at the former Gaamaadhoo complex and was officially declared missing in the 1980s. President Mohamed Nasheed has claimed that human bones discovered on the site of the former Gaamaadhoo prison were thought to match the age and estimated period of death of Anees, after sending the samples to Thailand for DNA analysis and carbon dating, and asked police to investigate.

In April the government claimed crucial files relating to the investigation into the Gaamaadhoo bones had gone missing – including the originals kept with the DPRS, and copies stored with police.

State Home Minister Ahmed Adhil told Minvan News at the time that the government had ordered a police investigation into the missing files.

“Police  informed the Home Ministry that they have located copies of the files, but the original was held by the DPRS and is still missing. We don’t count copies of papers so we don’t know whether any important documents are missing unless we find that original,” he said.

Adhil said at the time that the Ministry could not yet say whether the files had been misplaced or deliberately removed, although the theft of the documents “is a very close possibility.”

Earlier this month, former deputy leader of the opposition Dhivehi Rayyithunge Party (DRP) Umar Naseer, a key leader in Gayoom’s faction of the DRP, claimed to have obtained information that results of the examinations showed the bones were “over 800 years old.”

”Those bones were first taken to Thailand for investigation and [investigators] said they were over 800 years old,” said Naseer. ”Later the government sent the bones to America, where they also said the same.”

Umar said the investigation into the identity of the bones was now closed, ”but the government will never say that because they want to use it for political purposes.”

Following Isthafa’s arrest, former President Maumoon Abdul Gayoom’s spokesperson Mohamed Hussein ‘Mundhu’ Shareef told Haveeru that the detention of the former head of prisons was the “the third part of the drama” in a long-plotted lead up to the arrest of the former president.

“The attempt to arrest President Maumoon will only boost his profile. We see this simply as the government’s attempt to divert the people’s attention from the dollar crisis and rising commodity prices,” Shareef told Haveeru.

Press Secretary for the President’s Office, Mohamed Zuhair, did not respond to Minivan News at time of press.


New members for Presidential Commission investigating alleged embezzlement

The Presidential Commission established in 2009 to investigate alleged embezzlement of state funds and resources was reconstituted by President Nasheed yesterday.

The commission will now be chaired by Sarangu Adam Manik and Hussain Rasheed Ahmed. The other two members are Mohamed Aswan and Abdulla Haseen.


Presidential Commission member resigns over “political influences”

Presidential Commission member Idham Muizzu Adnan resigned from the commission yesterday, claiming a lack of transparency and impartiality.

The Presidential Commission is an independent body created by President Mohamed Nasheed in May 2009 to investigate corruption allegations in the country. The president was also responsible for appointing all of its members.

Spokesperson for the Presidential Commission, Abdulla Haseen, said the commission’s mandate was to investigate corruption cases, particularly targeting people accused of corruption under the previous regime.

However Adnan, who has worked with the commission since it was created, said he resigned because of “certain political influences” that were being imposed on the commission.

“I agree the president has the power to dictate [how the commission is run]… but he should do it in a reasonable and impartial manner,” Adnan said.

Adnan said sometimes the commission was pressured “not to call on certain people” when investigating a case, or was advised not to disclose certain information to the public.

“In decree, the commission is to function independently… [it] should not be used as a tool to protect people or attack opponents.”

Furthermore, “we should be allowed to disclose any information [we find],” he said, “because these corruption issues need to be investigated.”

Adnan said a press conference scheduled for yesterday evening was cancelled at the last minute on request from the President’s Office, which made him reconsider his position in the commission.

“I feel [the commission] cannot function in an impartial manner,” Adnan said.

Haseen confirmed Adnan’s resignation and said Adnan “is really concerned about transparency… he is not satisfied with our decision to postpone a press conference.”

Haseen confirmed the scheduled press conference was postponed “on the advice of the President’s Office.”

He said the commission gives press conferences “frequently” and this one was postponed “because the issue is quite controversial.”

The Presidential Commission is allowed to share information with the public, Haseen said, but “we have some limitations.”

Haseen explained that once the investigation of a case is completed by the commission, a press conference will normally be held before the registration report is sent to the police. The police then have to send it to the Prosecutor General’s office, who decide whether the case will be sent to court.

Although Haseen said the President’s Office “never intervenes with the process” of investigation, on this occasion, “Mr Adnan is not happy about it.”

Haseen said the commission regularly seeks the president’s advice, since “he appointed the commission, it is related to his advice,” and their investigations are always “cooperative.”

Haseen said the issue of the commission’s transparency was “nothing to worry about.”

Press Secretary for the President’s Office Mohamed Zuhair said President Nasheed expressed his regret about Adnan’s resignation, and thanked him for his sincerity and the legal advice he provided the commission.

Zuhair noted the President created the commission to strengthen the role of the Anti Corruption Commission (ACC) and the Human Rights Commission of the Maldives (HRCM), among other independent commissions

“The Presidential Commission is an auxiliary body to help police and other agencies at the front line of legal matters,” Zuhair said.

He said he believed Adnan “jumped the gun” with his resignation.

“He may have other assumptions [about the commission],” Zuhair said.

Zuhair said the press conference that was cancelled yesterday had originally been scheduled for Thursday, but the commission postponed it until Sunday “for their own reasons.”

He said the president then wrote a letter to the commission asking for the details of the press conference, “saying he should be informed of the key points to be made public.”

Zuhair said “it would not be the decent thing to do to go ahead with the press conference without giving the president the facts he wanted. It is the Presidential Commission. The president is the head of this body.”

He said the president “didn’t want to jeopardise the legal process” by revealing certain information before the case was made public and sent to the police. “The president wanted to know whether the commission had a water-tight case.”

But he assured “there was no order [made] to stop the press conference.”