Withdrawing US$1.2 million case against Meridian Services “a mistake”, says STO

A request to withdraw a US$1.2 million case against Dhivehi Qaumee Party (DQP) MP Riyaz Rasheed’s Meridian Services Pvt Ltd was sent to the court “by mistake”, the State Trading Organisation (STO) has said.

Managing Director of STO Shahid Ali was quoted in local media as stating that the letter had been mistakenly sent, and they had intended to delay the hearings.

“We sent the letter to the court regarding the case, because there were decisions that had to be made by the board of directors, and since the company did not have the required legal number of board of directors on STO’s board, we had intended to ask the court to delay the hearings,” Shahid Ali told newspaper Haveeru.

“But in the phrasing of the letter sent to the court from the STO, we had mistakenly asked for the withdrawal of the case. That letter was sent to the court asking to withdraw another case,” he added.

In a press statement received by Minivan News today from the STO, the organisation stated that the letter sent to the court had “typing errors” and that due to these errors, the context of the letter had differed drastically from that of what the organisation had originally intended, which was to delay the hearings until the board members had  been appointed.

The statement also stated that the STO would resubmit the case again to Civil Court within a period of seven days, and the works were already underway in preparing the necessary documents that would be submitted to the court.

The case concerned an unpaid sum of money worth Rf 19,333,671.20 (US$1,253,804.88), regarding Meridian’s use of the STO’s credit facilities.

Civil Court Judge Abdulla Jameel Moosa on Sunday ruled that the case was dismissed, in response to a letter sent by the STO requesting the case be withdrawn.

Judge Moosa in his verdict stated that the court had received a letter from the STO requesting the court withdraw the case.

The letter sent to the Civil Court by STO stated that “there were decisions to be made by the STO’s board of directors, and that after the “change in government”, the board did not have a sufficient number of members left to meet quorum and hold a board meeting. Therefore, the board was unable to make the required decisions, the public company stated.

Initially, STO and Meridian Services made an oil trade agreement on 31 March 2010, which gave Meridian Services a credit facility worth 20 million rufiyaa (US$ 1,297,016.86) for purchasing oil from STO, and that payments had to be made within a period of 40 days.

However, in August 2010, STO lowered its credit limit from Rf20 million to Rf10 million (US$648,508.43) and shortened the payment period from 40 to 30 days.

Meridian Services sued the STO for breach of contract claiming that STO had brought in the changes to the credit facilities without giving the required notice of one month, in the event that the STO decided to change the credit facility with regard to a policy change.

However, Meridian Services lost the case after Civil Court Judge Abdulla Jameel Moosa ruled in favor of STO, stating that the STO had not breached the contractual terms agreed between the parties and that the documents the STO had submitted to the court was evident that it had brought the changes in proper compliance with the agreement.

Speaking to Minivan News at the time, former legal director of President’s Office and lawyer Hisaan Hussain questioned whether such a big case could be withdrawn without even a board resolution.

“We are not speaking of an ordinary company. This is a public company and its making such a decision without a board resolution is a huge concern. STO has public share holders; they have to be answerable to the share holders,” she told Minivan News at the time.

With Regard to the withdrawal of the case by STO, opposition Maldivian Democratic Party (MDP) Spokesperson, MP Imthiyaz Fahmy alleged that it another attempt in “cleansing” all the “corrupt politicians” who had been involved in bringing about “the coup on February 7”.

However, STO in its statement denied such allegations made against the organization and its staff, citing it as false and untrue.

STO is a major supplier of general goods and pharmaceuticals to the Maldives, as well as fuel. It also supplies aviation fuel to Ibrahim Nasir International Airport (INIA).

The organisation was initially formed in 1946 as a fully state-funded business, in the name of Athireemaafannu Trading Agency (ATA), with the task of purchasing and importing essential food items in bulk to be distributed nationally via local traders and their own retail outlets. It was later expanded and rebranded as the State Trading Organisation.