Tag: STO

STO sells BML shares worth MVR33 million to Champa Brothers

The State Trading Organisation (STO) has sold its Bank of Maldives Plc (BML) shares worth MVR33 million (US$2.1 million) to Champa Brothers Pvt Ltd through the Maldives stock exchange.

STO MD Adam Azim told Sun Online that the shares – reportedly worth 30 percent of BML – were sold in a bid to improve the state-owned company’s finances.

“The shares were sold through the stock exchange on the open market. It was carried out in a way that anybody who wanted to buy the shares had the chance,” he was quoted as saying.

Sun Online reported back in December 2012 that Champa Brothers had purchased treasury bills worth US$11 million. The amount currently owed by the government to the company remains unclear.

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Crew member injured in fire onboard STO oil tanker

A crew member of a State Trading Organisation (STO) oil tanker en route to the gulf was injured in a fire accident yesterday, local media reports.

STO Managing Director Adam Azim told newspaper Haveeru that the incident occurred onboard the ‘Aihuras’ vessel while it was near the coast of the city of Mumbai in India. There was no oil on the ship when the fire broke out, he noted.

The burnt crew member was taken to a Mumbai hospital for treatment while the ship was undergoing repairs for minor damages caused by the fire.

“It was not a very dangerous incident. We would know of the injuries sustained by the crew member in detail after seeing the doctor’s report,” Azim was quoted as saying.

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Orthopedic surgeries halted as IGMH fails to provide protective gowns

Read this article in Dhivehi

Indhira Gandhi Memorial Hospital (IGMH) has “temporarily delayed” some orthopedic surgeries after State Trading Organisation (STO) failed to supply lead gowns for medical staff, Deputy CEO Dr Mohamed Habeeb has said today.

He said the only surgeries affected by this would be those that require real-time X-ray monitoring, and that the hospital was expecting to receive the gowns very soon.

The lead gowns, like most other medical supplies for the hospital, are purchased through the STO, said Habeeb. The STO is a public company, with more than ninety two percent shares owned by the government.

“We have ordered replacements even last year. We might get them even by tonight. STO is working on it right now,” said Habeeb.

The purpose of lead gowns is to prevent the unnecessary and frequent exposure of medical staff to radiation which can cause cancer, infertility, and birth defects. While an estimated minimum of ten gowns are usually required for a surgery, the hospital currently has only two fit for use.

An IGMH nurse who often has to assist such surgeries told Minivan News that it has now been more than two years since they started requesting for new gowns. Letters have been written informing all relevant authorities of the situation, she added.

Orthopedic surgeries are done three days a week at the hospital, she explained, and on some days more than six of these surgeries require lead gowns.

“They [the remaining usable gowns] are usually taken by the doctors, saying they are closer to the source. Some staff have panicked after finding out they are pregnant. That risk is always there. And we are concerned about the patients as well. I have never seen any patient being offered a gown here,” she continued.

She stated that when patients need urgent attention, nurses cannot ignore and refuse to attend them even with the risks. Following a decision made by the department today, they will not be attending such surgeries until gowns are provided for them.

Head of the IGMH Orthopedic Department Dr Yoosuf Shan has told ‘Haveeru‘ that a memo highlighting the department’s decision has been sent to the heads of IGMH and the Health Minister.

“Radiation exposure could cause cancer. Most nurses assisting the surgeries are women. Without lead gowns their children could be born with birth defects. So as a precautionary measure we were forced to stop some of surgeries. They will continue only after we received lead gown,” Dr Shan was quoted as saying.

IGMH could not identify the exact reason for the delay in acquiring the gowns and the STO was unable to put Minivan News in touch with the relevant person.

Last November STO stopped supplying medicine to IGMH after it reached a set credit limit. At the time STO managing director Shahid Ali told local media that the Hospital had to pay approximately MVR 200 million to the organisation.

STO later resumed supples after raising the credit limit by MVR5 million in addition to the MVR411 million credit limit which includes payments going back to 2011.

Following the failure of other state owned company’s to pay almost US$40 million in bills owed to the STO, President Abdulla Yameen declared the organisation bankrupt last November. The company subsequently launched a campaign to cut operational costs by MVR50 million in 2014 (US$ 3,242,542).

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Civil Court dismisses STO’s case against MP Riyaz Rasheed’s Meridian Services

The Civil Court has dismissed a case filed by the State Trading Organisation (STO) against MP Riyaz Rasheed’s Meridian Services seeking to recover MVR19.3 million (US$1.2 million) released as credit.

According to local media, the court dismissed the lawsuit after STO lawyers did not turn up to a hearing scheduled for February 6.

Judges are empowered to dismiss cases if the plaintiff or claimant does not attend court hearings.

The former Dhivehi Qaumee Party MP meanwhile joined the ruling Progressive Party of Maldives last month.

STO and Meridian Services signed an oil trade agreement on March 31, 2010, which offered the company a credit facility worth MVR20 million (US$ 1,297,016.86) for purchasing oil from STO.

The agreement stipulated that payments had to be made within a period of 40 days.

However, in August 2010, STO lowered its credit limit from MVR20 million to MVR10 million (US$648,508.43) and shortened the payment period from 40 to 30 days, prompting Meridian Services to sue STO for alleged breach of contract.

Meridian Services lost the first case, however, after Civil Court Judge Abdulla Jameel Moosa ruled in favor of STO.

Case history

In April 2012, the STO sent a letter to the Civil Court requesting withdrawal of the case against Meridian. However, then-STO MD Shahid Ali claimed a week later that the letter was sent “by mistake.”

The STO’s intent was to request delaying hearings as the company did not have the legally required number of members on its board of directors following the “change in government” on February 7, 2012, Shahid explained, adding that the case would resubmitted.

At a hearing of the case in June last year after the trial resumed, STO lawyers claimed that original documents of business transactions with Meridian had been stolen.

The theft of the documents from the STO office occurred on October 27, 2011 and was reported to police at the time, the lawyers said.

The lawyer reportedly requested the opportunity to present witnesses to prove the authenticity of copies or other records of the stolen documents.

However, lawyers for the Vilufushi MP’s Meridian Services disputed the authenticity of the purchase orders, delivery notices, and invoices submitted as evidence by STO, claiming the documents were forged.

The Meridian lawyer claimed that there were discrepancies in the purchase orders and delivery notes with inconsistent numbers and quantities as well as lack of signatures.

In response, the STO lawyer said Meridian had not submitted any evidence or any statement challenging the validity of the evidence submitted by STO.

The judge adjourned the hearing after announcing that a decision would be made at the next hearing over STO’s request to present witnesses.

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STO posts record profits for January

The State Trading Organisation (STO) has posted a record level of profits for the month of January.

STO Managing Director Adam Azim told the press on Thursday that the MVR46 million (US$3 million) earned last month was the highest monthly profit in the company’s history.

The record profit was the result of efforts to improve the financial situation of the company, Azim said, adding that STO did not raise prices “a single cent” from goods sold to the public.

Efforts were instead undertaken to make the company’s management more efficient and increase productivity, he said.

The company’s current aim was to improve cash flow and liquidity and focus on its traditional business instead of expanding to other sectors, he added.

As STO was owed almost a billion rufiyaa in unpaid bills from government-owned companies, Azim said the finance ministry has been making repayments in monthly instalments.

On ongoing projects, Azim said the company expected the residential hotel under construction in Hulhumalé to be completed by the end of the year while a project to install night lights at the Fuvahmulah airport would be finished soon.

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STO launches campaign to cut operational costs by MVR 50 million

The State Trading Organization (STO) has launched a campaign to cut operational costs by MVR 50 million in 2014 (US$ 3,242,542).

The state-owned STO is the country’s primary wholesaler, responsible for bringing in the vast majority of basic foodstuffs such as rice and flour, as well as other imported commodities such as electrical goods.

It also imports the vast majority of the Maldives’ oil, used to fuel fishing and transport vessels, diesel generators, air-conditioners and water desalination plants.

The company’s chairman Ahmed Niyaz inaugurated the “Save 50 million” and a second campaign “Saafu STO” (Clean STO) at a ceremony held in front of the company’s headquarters this morning.

The Saafu STO campaign intends to encourage cleanliness, a pleasant work environment and efficient resource utilization, STO’s media official Ismail Sodiq told Minivan News.

Speaking at the ceremony STO’s new managing director Adam Azim called on staff to be ethical in using the company’s resources.

“It is my wish that everyone is loyal to STO, and be ethical in using STO’s resources. A place without ethics does not have progress or life. If we are ethical, it is not 50 million that we save, I am certain we can save more than 100 million in 2014,” he said.

“Our Maldives is very dirty. And STO has become very dirty. So we all have to unite and bring out the new STO culture to the streets. From the streets we will take [the culture] to the houses and be more determined to clean things up,” he added.

Meanwhile, Minister of Economic Development Mohamed Saeed said all businesses must take STO’s new campaigns as examples.

In November, President Abdulla Yameen Abdul Gayoom said STO is bankrupt.

“Not only does STO not have dollars, it does not have Maldivian Rufiyaa either. Funding the oil import through STO is now a burden for the state,” he said.

“I checked today where STO is now. By the time I left STO, the company had developed many commercial projects and STO was making MVR 154 million in profit. Today, STO is bankrupt. I am telling you, it is bankrupt. STO does not have money,” said Yameen, who chaired the organisation during the rule of his half-brother, Maumoon Abdul Gayoom.

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STO raises credit limit for IGMH, resumes supplying medicine

The State Trading Organisation (STO) has raised the credit limit for the government-operated Indira Gandhi Memorial Hospital (IGMH) and resumed providing medical supplies and medicine.

STO Managing Director Shahid Ali told CNM today that the credit limit has been raised to MVR5 million (US$324,254) following assurances by the Finance Ministry.

While local media had reported that STO had stopped providing medicine to IGMH, Shahid explained that the government-owned company was unable to provide further supplies after the credit limit was reached this morning. The hospital owes STO for purchases dating back to 2011, he noted.

However, IGMH Responsible Officer Dr Mohamed Habeeb claimed that the STO stopped providing supplies “every other week or two weeks” citing the credit limit.

“STO has stopped providing medicine and medical supplies today saying we have run out of credit. But what can we do? It is the Finance Ministry that pays,” he was quoted as saying.

Shahid Ali had told parliament’s Finance Committee recently that the company was facing financial constraints due to unpaid debts in excess of MVR600 million from other government-owned companies.

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STO purchases new oil shipment

The State Trading Organisation (STO) has purchased a 7000-ton oil shipment after settling overdue payments, easing fears of the country running out of oil by next week.

STO Managing Director Shahid Ali told newspaper Haveeru today that the oil shipment had been held up in Dubai after the government-owned company was unable to make outstanding payments to foreign oil suppliers.

The 7000 tons of oil began loading yesterday after STO paid US$7 million to the suppliers, Shahid said.

The shipment includes petrol, diesel and jet fuel, he added, which was enough to last for a week.

STO was hoping to order a further 9,000 tons for US$8 million tomorrow, Shahid said.

While the government provided US$3.5 million to import the new stock, the rest was arranged by STO.

The company faced financial constraints and difficulties paying foreign suppliers due to more than MVR600 million owed to STO by other government companies and institutions.

Meanwhile, STO reportedly owes US$140 to foreign oil suppliers, which it is paying in instalments.

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MMA governor warns of having to print money

Maldives Monetary Authority (MMA) Governor Dr Fazeel Najeeb has warned that the central bank would be forced to print money to arrange funds for the State Trading Organisation (STO) to resolve a looming oil payment crisis.

Dr Najeeb told CNM yesterday that money would have to be printed if STO’s efforts to secure the funds through banks were unsuccessful.

STO MD Shahid Ali told parliament’s Finance Committee last week that the government-owned company needed to clear US$7 million out of a US$20 million debt owed to foreign oil suppliers to be able to import a new shipment.

“We estimate that the stock could run out by [November] 10 or 11 if a new stock is not brought in,” Shahid told MPs.

Finance Minister Abdulla Jihad told the committee that he had asked the MMA to provide MVR50 million to STO but was told that the central bank could only arrange for MVR20 million as the public bank account was overdrawn.

Shahid Ali told Minivan News on Sunday that the MMA had committed to financing the overdue payments although the “exact amounts have not been agreed upon.”

Jihad confirmed to newspaper Haveeru yesterday that MVR59 million had been made available to STO with more funds to be arranged on Thursday, which would enable the company to import a fuel shipment this week.

The MMA governor meanwhile revealed at parliament last week that the public bank account was overdrawn by MVR1.5 billion (US$97 million) as a result of having to finance government expenditure.

“When we have to accommodate every request by the government we are forced to act completely against the MMA law,” he said, referring to printing money and dipping into foreign currency reserves.

While short-term overdraws from the public bank account to manage the government cash flow was not a concern, Dr Najeeb told MPs that it was instead being used as a means to finance the budget deficit and print money.

Excess rufiyaa in circulation would worsen the dollar shortage and stoke inflationary pressures, he cautioned, explaining that “every MVR100 printed is added to the total [local currency] chasing the dollars.”

Deficit monetization – printing money to plug the fiscal deficit – was ceased by the previous administration in late 2009 in favour of issuing treasury bills and bonds while the MMA introduced open market operations to mop up excess liquidity.

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