The High Court on Thursday ordered Meridiam Services to pay MVR19 million (US$1.2 million) owed to the State Trading Organisation for fuel released on credit from March to December 2010 along with fines imposed for non-payment.
A three-judge panel at the appellate court overturned a civil court judgment in favour of Meridiam and ordered the company to settle the payment within six months. If the company fails to comply, STO was authorised to sell off a vessel mortgaged by Meridiam under the credit facility agreement.
At the time of the transaction, Meridiam’s majority stakeholder was MP Riyaz Rasheed, who later became the deputy leader of the formerly ruling Progressive Party of Maldives’ parliamentary group.
In June 2016, the civil court ruled that STO was unable to conclusively prove that the fuel had ever been released to Meridiam.
STO’s lawyers submitted copies of purchase orders, delivery notices, and invoices but Meridiam disputed their authenticity. The court asked STO to produce the original documents but lawyers said they were stolen in October 2011.
STO, the largest state-owned enterprise and the country’s primary wholesaler, appealed the judgment in October 2016.
According to media reports, the original documents were later found and submitted to the High Court after the appeal hearings were wrapped up.
The High Court ruled that witness testimony and documentary evidence proved that STO had released fuel to Meridiam.
In late 2016, Meridiam was also involved in a legal battle with the Maldives Ports Limited over a disputed fuel supply contract. MPL’s former CEO Mohamed Junaid accused the company of selling oil at a price far above the market rate, causing a loss of MVR1.2 million (US$78,000) to the state-owned company.
More recently, the new managing director of the state utility Fenaka Corporation accused Riyaz’s company of selling diesel at three times the market rate.
But Riyaz told the Maldives Independent that the allegation was “a blatant lie.”