High court rules against Gasim’s Villa in resort lease dispute

High court rules against Gasim’s Villa in resort lease dispute
March 22 10:12 2017

The high court has overturned a lower court ruling in favour of Jumhooree Party leader Gasim Ibrahim’s Villa Shipping and Trading conglomerate over the government’s seizure of the island of Elaa in Thaa atoll.

In contrast to the civil court ruling in January last year, the appellate court held that the tourism ministry’s termination of the lease agreement was lawful.

Tuesday’s decision was the latest in a series of rulings that have overturned lower court judgments in favour of Villa after Gasim backed former President Maumoon Abdul Gayoom’s decision to withdraw support for the government in late October.

Gasim had predicted that the high court would rule against Villa in a rare political speech on Sunday. “It looks like a big wave is building, looks like they are going to freeze all the accounts of Villa Shipping company again,” he said.

After the JP formed an alliance with the Maldivian Democratic Party in early 2015, the tourism ministry seized five properties leased to Villa for resort development – including Elaa, two other islands, and two lagoons – and the tax authority sought US$90.4 million allegedly owed as unpaid rent and fines.

The central bank subsequently froze the accounts of Villa Shipping and three subsidiary companies.

The crippling freeze was lifted after the two-time presidential candidate announced his retirement from politics and backed the government in several crucial votes, including a constitutional amendment that barred him from contesting in the 2018 presidential election.

Gasim went on to stand by President Abdulla Yameen after the September 28 blast on the president’s speedboat. The civil court subsequently ruled in favour of Villa over the cancellation of the leases for two lagoons and island of Gazeera in Gaaf Dhaal atoll.

By January last year, Villa had won back all five properties seized at the height of the political crisis in February 2015. The civil court also ordered the tourism ministry to comply with the lease agreements.

However, when Gasim threw his weight behind Gayoom after the former president lost a bitter power struggle with Yameen for control of the ruling party, the high court overturned the civil court’s ruling over the seizure of the Vaavedhdhi and Bolidhuffaru lagoons in Kaafu atoll.

The judgment was widely condemned as politically motivated. “Nothing says ‘Investor Confidence’ quite like a court system reversing its own verdicts with every political change,” observed MDP MP Eva Abdulla.

In February, the high court also overturned a stay order issued by the civil court to halt the takeover of the Kaadehdhoo airport in Gaaf Dhaal atoll from Gasim’s Villa Air.

Earlier this month, the high court ruled against Villa over the government-owned Housing Development Corporation’s seizure of plots of land leased to the company from Hulhumalé.

Gasim said Sunday night about the loss of Villa’s properties: “I’m not that worried about it. It was what Allah gave me. When the time preordained by Allah is up, it will slip from my hands.

“But I am sad that I might not be able to pay salaries for my 5,000 employees.”

After the company’s accounts were frozen in May 2015, Villa had advised some 4,500 employees “who find it hard to work with us to rebuild the company again” to resign and promised to pay outstanding salaries at a later date.

The government had also seized the Kaadehdhoo airport and downgraded Villa’s Maamigili airport in August 2014 after Gasim warned that the current administration’s signature special economic zones legislation would facilitate massive corruption.

Both decisions were reversed after the JP’s lawmakers voted in favour of the SEZ law.

The JP is the third largest party in the country and Gasim’s endorsement was pivotal in deciding the last two presidential elections.

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

Yameen has also been accused of targeting the businesses of ruling party lawmakers who sided with Gayoom in the ruling party’s leadership dispute, which had fuelled speculation that the new opposition alliance between ruling party lawmakers loyal to Gayoom and the MDP and JP could threaten the previously unassailable pro-government majority in parliament.

But the president has maintained that the judiciary is independent and free of undue influence from the executive.