State wholesaler appeals to recover US$1.2m from PPM MPs’ company

State wholesaler appeals to recover US$1.2m from PPM MPs’ company
October 10 16:29 2016

The State Trading Organisation has appealed a civil court ruling in favour of a company owned by ruling party MP Riyaz Rasheed’s family to recover MVR19.3 million (US$1.2 million) released as a credit facility.

The STO claims that Riyaz’s Meridiam Services failed to pay for fuel released on credit from March to December 2010 along with fines imposed for non-payment.

But the civil court ruled in June that STO was unable to conclusively prove that the fuel was ever released to Meridiam.

STO’s lawyers submitted copies of purchase orders, delivery notices, and invoices as evidence, but Meridiam disputed the authenticity of the documents.

The court asked STO to produce the original documents but the lawyers said they were stolen in October 2011.

The civil court judgment also stated that the police had failed to find any evidence of a robbery at the STO office at the time.

The first hearing of STO’s appeal before the high court took place last Thursday.

MP Riyaz Rasheed, the deputy leader of the ruling Progressive Party of Maldives’ parliamentary group, was not responding to calls at the time of publication.

STO is the largest state-owned enterprise and the country’s primary wholesaler. The government owns an 82 percent stake in the public limited company.

The civil court had previously dismissed STO’s case against Meridiam in February 2014 after lawyers representing the state wholesaler failed to attend a hearing. The case was later resubmitted.

The STO also requested withdrawal of the case against Meridian in April 2012. However, then-STO MD Shahid Ali claimed a week later that the letter was sent “by mistake.”

Meanwhile, in February this year, the opposition-aligned Raajje TV reported that the anti-corruption commission was investigating allegations that Meridiam Services was supplying the Gulf brand lubricant oil to all powerhouses operated by the state-owned Fenaka Corporation.

According to local media, Riyaz is no longer a majority stakeholder in Meridiam as his shares have been transferred to two of his children.