US$79m embezzled in Maldives’ biggest corruption scandal

US$79m embezzled in Maldives’ biggest corruption scandal
February 06 14:15 2016

A long-awaited audit report of the Maldives’ biggest corruption scandal has exposed the embezzlement of a staggering MVR1.2 billion (US$79 million) from the government-owned tourism promotion company.

The special audit of the Maldives Marketing and Public Relations Corporation implicated former Vice President Ahmed Adeeb’s associates in the theft of US$65.01 million collected as acquisition costs from leasing islands, lagoons and plots of land for tourism.

The audit examined the MMPRC’s transactions from the first day of the current administration in November 2013 to Adeeb’s arrest on suspicion of plotting to assassinate President Abdulla Yameen last year.

After publicly accusing his deputy of using MMPRC funds to bribe the police and military following his arrest on October 28, Yameen had ordered the Auditor General’s office and the Anti-Corruption Commission to launch an investigation.

In his address at the opening of parliament last week, Yameen said the Attorney General’s office will seek to recover stolen assets from those identified by the watchdog bodies.

The beneficiaries of the unprecedented corruption scandal are said to include ministers and MPs from both the ruling and opposition parties.

Ahead of the report’s release, the Maldivian Democratic Party accused the audit office of removing information proving Yameen and First Lady Fathmath Ibrahim’s involvement from the final version.

According to the main opposition party, the MMPRC had distributed some US$205 million to private companies. The MDP also published a picture of a deposit slip that appears to show US$500,000 was deposited to an account under the name of Abdulla Yameen Abdul Gayoom at the Maldives Islamic Bank on October 12.

But the audit office has denied omitting any information or facing undue influence from the government.

Yameen has also dismissed allegations of his involvement in the corruption scandal as baseless.

According to the audit report, the missing funds also include US$6.13 million paid to private companies to buy dollars, US$6.15 million provided as loans, and US$1.9 million released without any documentation.

The bulk of the stolen funds – US$70 million – was siphoned off into the bank account of a local company called SOF Pvt Ltd, owned by Mohamed Allam Latheef ‘Moho,’ a close associate of Adeeb who fled the country in the wake of the September 28 blast on the president’s speedboat.

Allam, the lead singer of a popular local band called Scores of Flair, was among eight suspects wanted in connection with the alleged assassination attempt. An Interpol red notice has since been issued for his arrest.

The rest of the stolen funds were deposited into the accounts of  a company linked to Hamid Ismail, an influential businessman and relative of the detained vice president.

While US$7.50 million was siphoned off into Hamid’s Millenium Capital Management Pvt Ltd, the audit revealed that US$1.15 million was deposited into the accounts of Montillion International Pvt Ltd.

Adeeb had reportedly transferred his shares in Montillion to his father before his appointment as tourism minister in March 2012.

A further US$500,000 was deposited into the accounts of an individual and two private companies.

Adeeb and Hamid are standing trial on corruption charges along with Abdulla Ziyath, former managing director of the MMPRC.

The audit report said Ziyath’s signature was on the MMPRC cheques made out to the private companies.

The audit found that the MMPRC had subleased some 59 islands, lagoons, and plots of land for development as resorts, hotels, and yacht marinas.

The MMPRC was awarded 53 properties under head lease agreements between the corporation and the ministry of tourism. A further six properties were subleased to third parties without any agreement with the ministry.

The MMPRC was owed US$96.89 million as acquisition costs for the 59 properties, but had issued receipts after collecting US$79.61 million.

Only US$12.50 million was deposited into the MMPRC’s account.

The audit was compiled based on information from the tourism ministry and private companies as there were no supporting documents at the MMPRC on the lease agreements and financial transactions.

Among other issues flagged in the report included the lease of two lagoons and a plot of land without an acquisition cost, the lease of an uninhabited island to two companies despite a previous lease agreement, and the failure to collect US$7.21 million owed as acquisition fees for nine properties.