Tag: Villa Group

Villa Group unable to pay salaries

Opposition politician Gasim Ibrahim’s Villa Group has announced it will not be able to pay salaries of more than 4,500 employees after the government froze its accounts last week over unpaid fines.

The conglomerate – which operates businesses in shipping, import and export, retail, tourism, fishing, media, communications, transport, and education – says the government’s US$90.4million claim is unlawful and is contesting it at the civil court.

The opposition says the government is targeting Gasim’s businesses because of his split from the ruling coalition in January.

“This company’s revenue has suffered since last November. The struggle to balance the company has been brought to a halt by the government propaganda’s, blatant lies and the freezing of our accounts,” managing director Ibrahim Siyad Gasim said in a memo sent to all employees on Wednesday.

“In these difficult circumstance, employees who find it hard to work with us to rebuild the company again are advised to find other job opportunities,” he continued. “The employees who leave will be paid their outstanding salaries as soon as we find the means to pay.”

Human resource manager of Villa Shipping, Ibrahim Moosa said the memo will apply to more than 4500 employees of Villa Shipping and subsidiary companies.

“This is a very difficult situation for the company. I plead with our staff to stay with us. God willing we will overcome this situation,” he said.

A journalist from Villa TV, also owned by Gasim, said the memo does not come as a surprise.

“They put out a memo a few weeks back saying some employees might be sacked due to the circumstances. Also there was another memo issued back in November. We have not been paid April’s salary yet,” she said.

Another employee at Villa’s domestic airline Flyme said staff had been paid half of their salaries and half of a transport allowance for March.

“All of us at Flyme understand what is happening. We know that Gasim is really being squeezed financially,” he said.

Since the notice was issued, Gasim has not been seen in opposition protests or made any comments on the imprisonment of ex-president Mohamed Nasheed and ex-defence minister Mohamed Nazim.

However, JP MPs and council members are part of a new coalition formed between the main Maldivian Democratic Party, the Adhaalath Party, defectors from the ruling coalition and members of Nazim’s family.

In an appearance on Villa TV in April, Gasim said two European banks have cancelled loans worth US$80 million due to media reports of the notice.

Unfairly freezing Villa’s accounts would “impoverish thousands of citizens” and one of the largest companies in the country will “head towards bankruptcy,” he said.

The Maldives Inland Revenue Authority (MIRA) issued the US$90.4 million notice after the tourism ministry terminated agreements for several properties leased to Villa and subsidiary companies for resort development.

Some 27 cases challenging the termination of the agreements and MIRA’s notice as well as appeals of the civil court’s refusal to grant stay orders are ongoing at court.

Villa – which won the tax authority’s “Ran Laari” award last year as one of five companies that paid the highest amount to the state – insists it does not owe any money to the state.

But the civil court last month refused to issue stay orders until the conclusion of the dispute, saying the state could reimburse and compensate the company if the ongoing cases are decided in Villa’s favour.

MIRA’s notice stated that Villa owed US$75.5 million as fines, US$600,000 as interest, and US$14.8 million as unpaid rent dating back to original lease agreements signed in 2006 and 2007.

A second notice for the payment expired on April 18, but the Maldives Inland Revenue Authority (MIRA) did not freeze the company’s accounts saying the move may negatively affect the Maldivian economy, local media have said.

The JP has since accepted an offer by President Abdulla Yameen to commence talks.

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Government can suspend services to Villa if frozen accounts are empty

If the government is unable to recover sums owed to the state by freezing a company’s accounts, it can suspend all services to the company, including customs clearance and foreign worker visas, the Maldives Inland Revenue Authority (MIRA) has said.

The tourism ministry yesterday ordered the tax authority to freeze the accounts of all companies with pending bills, including that of the opposition Jumhooree Party leader Gasim Ibrahim’s Villa group.

But Villa officials today told local media that the accounts of the holding company, the Villa Shipping and Trading Pvt Ltd, are empty.

The government is seeking US$90.4 million allegedly owed as unpaid, rent, fines and interest on several properties from Villa group. The conglomerate – which operates businesses in shipping, import and export, retail, tourism, fishing, media, communications, transport, and education – says the notice is unlawful and is contesting it at the civil court.

The notice for payment expired on April 18, but MIRA did not freeze the company’s accounts, saying the move may negatively affect the Maldivian economy, local media has said.

Executive director of finance at Villa, Shimad Ibrahim, told Haveeru today that the company’s accounts were empty before the government’s decision to freeze accounts.

“We knew we were going to face financial difficulties before the decision to freeze the accounts. We were set to get a loan to offset the downturn, but that loan was cancelled due to these issues. That is why the company’s accounts are empty,” he said.

Speaking to Minivan News, Fathuhulla Jameel at MIRA said the authority’s enforcement policy allows it to order government offices to suspend all services to the company, and ask the civil court to set an arrangement to recover funds if the company’s accounts do not hold the owed sums.

MIRA issued the US$90 million notice after the tourism ministry terminated agreements for several properties leased to Villa and subsidiary companies for resort development. The move followed Gasim’s JP forming an alliance with the main opposition Maldivian Democratic Party (MDP). However, the government denies the opposition’s accusations of unfairly targeting Gasim’s business interests.

Some 27 cases challenging the termination of the agreements and MIRA’s notice as well as appeals of the civil court’s refusal to grant stay orders are ongoing at court.

While the tourism ministry cited lack of “good faith” as the reason, the Villa officials insisted the terminations were unlawful and that the fines were “fabricated”.

Villa – which won the tax authority’s “Ran Laari” award last year as one of five companies that paid the highest amount to the state – insists it does not owe any money to the state.

But the civil court last month refused to issue stay orders until the conclusion of the dispute, saying the state could reimburse and compensate the company if the ongoing cases are decided in Villa’s favour.

Since the notice was issued, Gasim has not been seen in opposition protests or made any comments on a deepening political crisis triggered by the arrest of opposition politicians. JP’s deputy leader Ameen Ibrahim was also arrested last week after clashes between protesters and police following a 20,000 strong anti-government march.

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Tourism ministry moves to freeze Villa accounts

The tourism ministry has ordered the tax authority to freeze the accounts of companies with pending bills, including that of the opposition Jumhooree Party leader Gasim Ibrahim’s Villa group.

The government is seeking US$90.4million allegedly owed as unpaid, rent, fines and interest on several properties from Villa group. The conglomerate – which operates businesses in shipping, import and export, retail, tourism, fishing, media, communications, transport, and education – says the notice is unlawful and is contesting it at the civil court.

The notice for payment expired on April 18, but the Maldives Inland Revenue Authority (MIRA) did not freeze the company’s accounts saying the move may negatively affect the Maldivian economy, local media have said.

Deputy tourism minister Hussain Liraar told Minivan News: “We did not mention a specific business or company. But the ministry sent a letter to the tax authority asking to freeze the accounts that owe money to the state.”

MIRA has declined to comment on the issue saying: “It’s not our policy to give out information regarding specific tax payers.”

Meanwhile, Tourism minister Ahmed Adeeb today told Haveeru: “The government must recover any money owed to the state. This is public money. We cannot let it slide for certain individuals.”

According to Haveeru, the tourism ministry’s order to freeze accounts came in response to a letter from MIRA, in which the tax authority said freezing Villa’s accounts could have adverse impacts on the economy. In response, the tourism ministry ordered MIRA to freeze the accounts of all companies with pending bills.

Some 20 companies, including Villa Shipping and Trading Pvt Ltd, now face an accounts freeze.

“Fabricated”

MIRA issued the US$90 million notice after the tourism ministry terminated agreements for several properties leased to Villa and subsidiary companies for resort development. The move followed Gasim’s JP forming an alliance with the main opposition Maldivian Democratic Party (MDP). However, the government denies the opposition’s accusations of unfairly targeting Gasim’s business interests.

Some 27 cases challenging the termination of the agreements and MIRA’s notice as well as appeals of the civil court’s refusal to grant stay orders are ongoing at court.

While the tourism ministry cited lack of “good faith” as the reason, the Villa officials insisted the terminations were unlawful and that the fines were “fabricated”.

Villa – which won the tax authority’s “Ran Laari” award last year as one of five companies that paid the highest amount to the state – insists it does not owe any money to the state.

But the civil court last month refused to issue stay orders until the conclusion of the dispute, saying the state could reimburse and compensate the company if the ongoing cases are decided in Villa’s favour.

Since the notice was issued, Gasim has not been seen in opposition protests or made any comments on a deepening political crisis triggered by the arrest of opposition politicians. JP’s deputy leader Ameen Ibrahim was also arrested last week after clashes between protesters and police following a 20,000 strong antigovernment march. 

Settlement agreements 

The properties at stake were leased under a settlement agreement signed with the tourism ministry on December 12, 2013, less than a month after president Abdulla Yameen took office.

The settlement agreement was reached after the Supreme Court on November 19 ordered the state to pay US$9.7 million to Villa in one month as compensation for damages incurred in a project to develop a city hotel in Laamu Kahdhoo.

As part of the settlement, Villa withdrew cases involving a dispute over a city hotel in Haa Dhaal Hanimadhoo and resort development on Gaaf Dhaal Gazeera. In return, the government signed five ‘amended and restated lease agreements’ with Villa for three islands and several Kaafu atoll lagoons.

The government also agreed to forgo rents for the islands and lagoons for a construction period of five years and seven years, respectively.

However, after the settlement agreement was terminated in February, MIRA’s notice stated that Villa owed US$75.5 million as fines, US$600,000 as interest, and US$14.8 million as unpaid rent dating back to original lease agreements signed in 2006 and 2007.

The Villa officials noted that the company has paid over US$15 million as advance payments for the properties.

In the case of Kahdhoo, MIRA claimed an unpaid rent of US$293,000 and a fine of US$10 million – 34 times the allegedly unpaid rent – despite the 2013 Supreme Court judgment declaring Villa does not owe rent for the property, the officials said.

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Villa accounts freeze will ‘send shockwaves’ through Maldives economy

Jumhooree Party leader Gasim Ibrahim’s Villa Group has warned of negative repercussions for the Maldivian economy if the tax authority freezes the company’s bank accounts next week.

A 20-day final notice seeking US$90.4 million allegedly owed as unpaid rent, fines and interest expires on Saturday (April 18), while the civil court last week refused to grant stay orders halting enforcement of the notice.

The enforcement policy for defaulting taxpayers involves freezing bank accounts to recover the unpaid amounts and ceasing to provide services from any state institution.

Villa – which won the tax authority’s “Ran Laari” award last year as one of five companies that paid the highest amount to the state – insists it does not owe any money to the state.

“It is not only Villa’s shareholders’ and the company’s rights that are lost [if bank accounts are frozen]. The rights of a lot of employees who work at the company, small and medium-sized businesses dependent on this company, guests who have made bookings at our resorts, tour operators, and many other people, would also be lost,” said Villa Group executive director Shimad Ibrahim at a press conference last night.

Banks that have issued loans to Villa will also be affected, he added.

“In sum, we are having to face something on Sunday that will send shockwaves through the whole economy,” he said.

The holding company Villa Shipping and Trading Pvt Ltd conglomerate operates businesses in shipping, import and export, retail, tourism, fishing, media, communications, transport, and education.

Villa business secretary Ibrahim Rasheed added: “We are all holding our breath.”

Rasheed said the company will continue to seek “a peaceful resolution” and “hope for justice”.

He noted that Villa companies employ about 5,000 people.

In an interview on his Villa Television on Saturday, Gasim repeatedly appealed for talks with president Abdulla Yameen and tourism minister Ahmed Adeeb to resolve the dispute.

However, the Villa officials said the government has not responded to “pleas” for discussions.

Adeeb meanwhile accused Gasim at a ruling coalition rally last week of hoarding islands and lagoons and refusing to pay money owed to the state.

“Fabricated”

The Maldives Inland Revenue Authority (MIRA) issued the US$90 million notice after the tourism ministry terminated agreements for several properties leased to Villa and subsidiary companies for resort development.

The move followed Gasim’s JP forming an alliance with the main opposition Maldivian Democratic Party. However, the government denies the opposition’s accusations of unfairly targeting Gasim’s business interests.

Some 27 cases challenging the termination of the agreements and MIRA’s notice as well as appeals of the civil court’s refusal to grant stay orders are ongoing at court.

While the tourism ministry cited lack of “good faith” as the reason, the Villa officials insisted the terminations were unlawful and that the fines were “fabricated”.

If rent is not paid, the government is required to give a 30-day notice before issuing fines or seizing the properties, they noted.

The lease agreements also specify procedures for termination on the grounds of financial or non-financial breaches, but the tourism ministry’s termination notices did not refer to any violation.

“This is something that investors should seriously consider. This is a frightening and dangerous thing,” said Villa lawyer Ahmed Shafeeq.

In response to a letter from Villa contending there was no basis for the fines, Shimad said MIRA told the company it was “following instructions” from the tourism ministry.

Settlement agreement

The properties at stake were leased under a settlement agreement signed with the tourism ministry on December 12, 2013, less than a month after president Yameen took office.

The settlement agreement was reached after the Supreme Court on November 19 ordered the state to pay US$9.7 million to Villa in one month as compensation for damages incurred in a project to develop a city hotel in Laamu Kahdhoo.

As part of the settlement, Villa withdrew cases involving a dispute over a city hotel in Haa Dhaal Hanimadhoo and resort development on Gaaf Dhaal Gazeera.

In return, the government signed five ‘amended and restated lease agreements’ with Villa for three islands and several Kaafu atoll lagoons.

The government also agreed to forgo rents for the islands and lagoons for a construction period of five years and seven years, respectively.

However, after the settlement agreement was terminated in February, MIRA’s notice stated that Villa owed US$75.5 million as fines, US$600,000 as interest, and US$14.8 million as unpaid rent dating back to original lease agreements signed in 2006 and 2007.

The Villa officials noted that the company has paid over US$15 million as advance payments for the properties.

In the case of Kahdhoo, MIRA claimed an unpaid rent of US$293,000 and a fine of US$10 million – 34 times the allegedly unpaid rent – despite the 2013 Supreme Court judgment declaring Villa does not owe rent for the property, the officials said.

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Gasim’s Villa group bankruptcy imminent

Jumhooree Party (JP) leader Gasim Ibrahim’s Villa Group is facing bankruptcy with the courts refusing to issue stay orders on a US$90 million payment to the state ahead of an April 18 deadline.

The civil court yesterday denied Villa’s requests for stay orders, stating the company does not face “irrevocable losses” if a notice by the tax authority to collect US$90 million in allegedly unpaid rent and fines is enforced.

The rulings pave the way for the state to freeze Villa’s bank accounts after April 18.

Gasim has said unfairly freezing Villa’s accounts would “impoverish thousands of citizens” and that the public does not want one of the largest companies in the country to “head towards bankruptcy.”

However, the court said the state could reimburse and compensate the company if the ongoing cases are decided in Villa’s favour.

The JP launched daily anti-government demonstrations in alliance with the main opposition Maldivian Democratic Party (MDP) in early February.

However, since the notice was issued, Gasim has not been seen in opposition protests or made any comments on a deepening political crisis.

Gasim made an appearance on Villa TV on Saturday for the first time in weeks and appealed for discussions with the government to resolve the dispute, insisting that Villa does not owe the “imaginary” amount.

He noted the JP had not condemned the sentencing of former president Mohamed Nasheed to 13-years in jail on terrorism charges last month

“When the judiciary made a judgement I don’t want to comment on it,” he said.

The JP is remaining “silent” and presently does not have a “stand” of supporting any party, Gasim said.

The party is not officially a part of the ‘Maldivians against brutality’ campaign launched by the MDP and religious conservative Adhaalath Party, he added.

Two European banks have cancelled loans worth US$80 million due to media reports of the notice, Gasim said.

Gasim’s interview followed strong criticism from tourism minister Ahmed Adeeb at a ruling coalition rally last week. He accused the tycoon of hoarding islands and lagoons and refusing to pay money owed to the state.

Adeeb also said the JP leader was “in hiding” after unsuccessfully seeking the presidency through his opposition alliance.

In response, Gasim said he is following his best judgment and suggested Adeeb’s anger might stem from insecurity or “lack of self-confidence”.

However, Gasim said he does not bear “animosity towards anyone” and repeatedly said he is ready to meet president Abdulla Yameen or Adeeb at any time.

Senior members of the JP are active in street protests in their individual capacity, Gasim said.

Bankruptcy

The government denies the opposition’s accusations of unfairly targeting Gasim’s business following the JP’s split from the ruling coalition.

The tourism ministry terminated agreements for several properties leased to Villa and subsidiary companies on February 5, shortly after the JP formed the alliance with the MDP.

On February 26, a day before an MDP-JP anti-government mass rally, the Maldives Inland Revenue Authority (MIRA) gave a 30-notice for Villa to pay US$90 million allegedly owed as unpaid rent and fines for the seized properties.

Gasim did not attend the February 27 protest march after failing to return from a trip to Sri Lanka

After the 30-day notice expired, MIRA issued a 20-day notice warning Villa that its accounts will be frozen under the authority’s enforcement policy against defaulting taxpayers.

After the tourism ministry terminated the agreements, Villa filed five cases against the ministry in February, contending that the move was unlawful.

Five additional cases were filed against MIRA over the US$90 million notice.

In rulings during the past two weeks, the civil court refused to grant stay orders in any of the cases. Villa is currently in the process of appealing the rulings at the High Court.

While the court initially granted a stay order in one case in early February, the High Court overturned the ruling.

A Villa official told Minivan New today that the judge who granted the stay order was transferred to the drug court.

The official explained that the properties at stake were leased as part of a settlement agreement signed with the government on December 12, 2013, less than a month after president Yameen took office.

The settlement agreement was reached after the Supreme Court ordered the state to pay over US$9 million to Villa. As part of the settlement, the government signed ‘reinstated and amended lease agreements’ with Villa for several islands and lagoons.

Gasim noted that Villa paid the state about US$15.8 million eight years ago as advance payment for the leased properties.

However, MIRA issued the 30-day notice claiming Villa owed US$75 million as fines and more than US$14 million as unpaid rent dating back to the original lease agreements signed in 2006 and 2007.

Under the settlement agreement, the government had agreed to forgo rents for the leased islands and lagoons for five years and seven years, respectively.

Correction: A previous version of this article stated that the tax authority is seeking US$100 million from the Villa Group, based on statements by Gasim Ibrahim. The company has since explained that the accurate figure is US$90 million. 

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Gasim’s Villa denied stay order in court battle

The Villa Group has been denied a stay order on the tourism ministry’s seizure of two lagoons in a court battle that could bankrupt one of the Maldives’ largest companies.

The civil court yesterday rejected a request by Villa, which is owned by opposition Jumhooree Party (JP) leader Gasim Ibrahim, for the stay order, paving the way for the tourism ministry to take control of the lagoons.

Villa Group is currently locked in a series of lawsuits against the state over the seizure of several leased properties as well as a notice to pay US$100 million allegedly owed as unpaid rent and fines.

The opposition claims the government is unfairly targeting Gasim’s business interests following the JP’s split from the ruling coalition. The government denies any political motivation behind the moves.

Villa has filed ten cases at the civil court contesting the tourism ministry’s termination of amended lease agreements as well as the US$100million notice.

The company is seeking stay orders halting the enforcement of the notices until the court decides on its legality.

But in yesterday’s ruling over the termination of lease agreements for the Maadhihgaru and Kanuhuraa lagoons in Kaafu atoll, the court ruled that Villa Hotels will not suffer “irrevocable losses” if the stay order is not granted as the state could compensate the company if the case is concluded in its favour.

The tourism ministry had also terminated lease agreements with Villa for three more islands shortly after the JP formed an alliance with the main opposition Maldivian Democratic Party (MDP) in early February.

Requests for stay orders in the other cases are still pending. Former Prosecutor General Ahmed Muiz is representing Villa in the lawsuits against the tourism ministry and the Maldives Inland Revenue Authority (MIRA).

MIRA had initially asked Villa to pay US$100million by late March, but extended the period until mid April.

Gasim has said the government is planning to freeze Villa’s accounts if the company is unable to pay the amount, warning that it would bankrupt the company and leave his 5,000 employees jobless.

In early February, the civil court granted a stay order halting the seizure of the five properties in separate litigation. However, on February 24, the High Court overturned the stay order.

Gasim meanwhile met Supreme Court Chief Justice Abdulla Saeed yesterday following the apex court’s refusal to accept an appeal for the High Court decision.

Gasim told reporters after the meeting that he expressed displeasure with the Supreme Court registrar rejecting the appeal without offering a reason.

The chief justice told him to submit a letter and that matters cannot be settled verbally, Gasim said.

Villa Group is one of the largest companies in the Maldives with the holding company Villa Shipping and Trading Pvt Ltd conglomerate operating businesses in shipping, import and export, retail, tourism, fishing, media, communications, transport, and education.

The three islands and two lagoons at stake in this case were leased as part of a settlement agreement signed with the government in December 2013 after the Supreme Court ordered the state to pay Villa over US$9 million as compensation.

Lagoons are generally leased for purposes of land reclamation for either industrial or tourism purposes.

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Gasim “economically paralysed,” says JP Deputy Leader

The current government has “economically paralysed” Jumhooree Party (JP) Leader Gasim Ibrahim, its Deputy Leader Ameen Ibrahim has said.

“Even though Gasim has not been put behind prison bars, the government has economically paralysed him,” Ameen said at a press conference of the opposition’s newly formed “Maldivians against brutality” alliance today.

Gasim could not actively participate in opposition activities as the government has “cornered” the tycoon by targeting his businesses, Ameen said.

While the opposition Maldivian Democratic Party (MDP) accepted the Adhaalath Party’s (AP) invitation to form a united front against the government, the JP’s national council is yet to decide whether the party will join the new alliance.

However, Ameen and several other senior JP members have been working with the alliance, claiming their participation was in an “individual capacity.”

Speaking at a press conference yesterday, AP President Sheikh Imran Abdulla accused the government of planning to seize all of Gasim’s assets and making sure he was “unable to move his hands or legs” in his defence.

Meanwhile, in an appearance on Gasim’s Villa TV, MDP Vice President Mohamed on Saturday said Maldivians should not wait and watch while the government destroyed Gasim’s Villa Group.

On March 1, the Maldives Inland Revenue Authority (MIRA) gave a 30-day notice to Villa Group to pay US$100 million allegedly owed as unpaid rent and fines.

Moreover, in February, the tourism ministry seized several islands and lagoons leased to Villa Group as part of an out-of-court settlement.

MDP-JP alliance

After officially leaving the ruling coalition in January, the JP formed an alliance with the MDP in January and launched nightly protests on February 10 against what they alleged were repeated violations of the constitution by President Abdulla Yameen’s administration.

Gasim himself and other JP leaders took part in the protests, which culminated in a mass rally on February 27.

Following former President Mohamed Nasheed’s arrest on February 22 ahead of a surprise terrorism trial, Gasim called on the Prosecutor General to withdraw the “politically motivated charges” and vowed to continue protests.

However, after failing to return from a trip to Sri Lanka to attend the February 27 protest march, Gasim has not appeared in opposition protests. He has also not made any public statements since a meeting with Home Minister Umar Naseer on March 5.

Villa Group is one of the largest companies in the Maldives with the holding company Villa Shipping and Trading Pvt Ltd conglomerate operating businesses in shipping, import and export, retail, tourism, fishing, media, communications, transport, and education.

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Villa Group contests US$100 million rent claim

Opposition leader Gasim Ibrahim’s Villa Group has contested a US$100million claim issued by the Tourism Ministry at the Civil Court.

The 30-day notice, issued on March 1, came after the ministry annulled agreements for seven islands leased to Villa Group. At the time, the ministry claimed Villa had failed to begin developing the islands as resorts.

The company last week requested the Civil Court to annul the US$100million claim as well as the Tourism Ministry’s decision to cancel the seven lease agreements.

Meanwhile, the opposition has alleged the government was targeting Gasim’s businesses following his split with the ruling Progressive Party of the Maldives and subsequent alliance with the Maldivian Democratic Party.

The Tourism Ministry in early February also moved to seize several lagoons granted to Villa Group, but was stalled following a Civil Court injunction. The High Court on February 24 overturned the stay order, paving the way for state appropriation.

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