Government foots settlement bill for victims of SeaLife flats scam

The Maldivian government on Monday signed an out-of-court settlement agreement to refund clients scammed by a private real estate developer.

SeaLife Global was sued in January by 203 people who paid thousands of dollars in booking fees and advance payments for apartments that were never built.

It was the largest class-action lawsuit in Maldives history.

According to Mihaaru, the government agreed to deduct the compensation from US$12 million owed to SeaLife in a separate matter over the cancellation of a project signed seven years ago. A resettlement agreement to pay US$12 million to the company was signed by the previous administration in February 2018. 

The details of the new settlement agreement have not yet been disclosed.

The Housing Development Corporation – a state-owned enterprise tasked with the urban development of the capital’s suburb Hulhumalé – along with the ministry of economic development were also sued in the class-action lawsuit.

Negligence on their part allowed the developer to scam the victims, Mariyam Shunana, a lawyer representing the plaintiffs, told the Maldives Independent.

“We sued the government institutions for negligence, because first of all the project was awarded to a company that didn’t have the capacity [to build the flats],” she said. “Secondly, it failed to evaluate and monitor the project, allowing SeaLife to take fees and payments from people in violation of the agreement.”

It was up to the government now “to go after SeaLife,” she added.

In a press statement released late on Tuesday, HDC defended the decision to settle the dispute out of court.

“Although the government and this company believes there was no negligence [on our part], the agreement was signed to mitigate the losses faced by many people and to give them justice,” it said.

The plaintiffs would be refunded and offered apartments under a government housing scheme, it added.

“The company will seek damages from SeaLife for any direct and indirect losses incurred under this settlement,” HDC assured.

Shunana previously told media that HDC awarded the housing project to SeaLife despite due diligence studies showing the developer was ill-equipped to carry out the project.

The economic ministry was accused of negligence for allowing SeaLife to register as a foreign investment joint venture without proper background checks and later allowing the foreign companies to sell off their shares.

SeaLife Global was registered as a foreign investment joint venture between SeaLife Maldives and two Dubai firms in early 2014, but the foreign companies later sold their shares. 

According to the civil court, SeaLife had admitted that the payments taken from the plaintiffs needed to be refunded but insisted the company’s Managing Director Ahmed Moosa, known as Ammatee, could not be held individually accountable since the dealings were done by the company. 

The class action lawsuit was filed after Ammatee fled the country and the SeaLife offices in the capital Malé were closed. An Interpol red notice was later issued to find him.

“We have evidence and documents and demanded a refund [of booking fees and downpayment], market rate rent for the plaintiffs and a chance to get flats. But they refused to give rent,” said Shunana,

Her clients decided to settle because the case could drag on for a long time, she explained. “Everyday these people are not paid back what they gave up and it drags on, it becomes harder,” she said.

Complaints filed against Sealife with the police and the anti-corruption watchdog are pending, she noted.

According to media reports, the government has also agreed to arrange new apartments for the Sealife buyers within two years.

“Thirty percent of plaintiffs just want a refund now. They don’t want another flat… Because they don’t trust. They don’t have faith that they can pay again, wait another two years and it would be any different,” Shunana said.