Tourism firms win legal bids to recover property despite evidence of graft

Two tourism companies have won landmark legal bids to recover an island and a lagoon seized by the authorities following the exposure of a historic corruption scandal involving the state-owned Maldives Marketing and Public Relations Corporation.

The civil court ruled in favour of Biznas Maldives in December and Sea House Resorts in November despite evidence that the state did not receive acquisition fees.

Biznas owed US$3million for the island of Hibalhidhoo in Lhaviyani Atoll while Sea House Resorts owed US$1.5million for a sought-after lagoon in Kaafu Atoll.

Both companies are linked to SOF Pvt Ltd, a front used to channel more than US$70million paid to the MMPRC to private accounts.

The rulings have prompted renewed calls for an independent investigation: The watchdog Anti Corruption Commission is yet to release its findings into the scandal despite a year passing since President Abdulla Yameen ordered a probe.

Hibalhidhoo and the Kaafu Atoll lagoon were among the few properties the tourism ministry seized; the authorities had pledged to honour agreements for most of the 59 properties rented, despite a damning audit report exposing fraud in their lease, including the failure to open a bid.

Hibalhidhoo was also the site of the discovery of a large weapons cache, resulting in the declaration of an unprecedented nation-wide state of emergency in November 2015.

According to the independent Auditor General’s Office, Hibalhidhoo is one of the three properties for which the MMPRC did not receive a payment.

The audit report said: “There are no records at the MMPRC that show it received this money. Further, Biznas has not provided this office with documents of having made the payment.”

Mohamed ‘Moho’ Allam Latheef, who owns SOF, previously owned 30 percent of shares in Biznas. In May, the civil court ordered the economic ministry to transfer Allam’s shares to the company’s majority shareholder, Mohamed Riyaz.

On December 29, civil court Judge Mohamed Haleem said the tourism ministry’s termination of the Hibalhidhoo agreement was “against its terms as well as legal and judicial standards,” and ordered the tourism ministry to return the property within 30 days. No further details were provided.

The second case is similar: A company called CICEO issued a cheque worth US$1.5million on behalf of Sea House Resorts for the unnamed lagoon. The cheque was accepted by the then-managing director of MMPRC.

“This check was never presented to the banks by November 30, 2015. Further, CICEO bank accounts contained only US$200, the amount required to open the account,” the audit report said. “Hence it is believed that the check was never cashed in order to award Sea House Resorts a lagoon without a fee.”

The ruling in favour of Sea House also did not offer a rationale.

The opposition has meanwhile reiterated a promise to terminate all corrupt contracts if it were to assume power, with Mohamed Maleel Jamal, a former minister in Yameen’s cabinet, claiming the government was incapable of recovering lost public funds or recovering properties.

“This government cannot find out the truth or conduct a proper investigation because there are massive conflicts of interest. Islands have been leased to companies owned by MPs,” he said.

He added: “Once a government of the people is established, we will look into all the opaque deals made through the MMPRC. All deals without a proper bidding process will be terminated.”

The opposition have accused Yameen and his wife of benefitting from the stolen funds, but the president’s office has denied the allegations.

Thoriq Hamid, a spokesman for anti-corruption group, Transparency Maldives, has urged the ACC to publish its findings immediately.

“What is required in this whole MMPRC corruption case is a concerted effort by state institutions to carry out an independent, unbiased and complete investigation, one that looks at all the transactions implicated in the scandal,” he said.

The ACC said its investigation is in “its final stages” but declined to state a date for the report’s release. Muaviz, the commission’s vice president, previously said the ACC did not have the authority to seize property even if corruption was uncovered because of a supreme court ruling curtailing its powers.

Former Vice President Ahmed Adeeb and former MMPRC Managing Director Abdulla Ziyath have been found guilty of graft and sentenced to jail in one case relating to the MMPRC scandal.