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Villa slams tax authority over lawsuits to recover US$166m

Villa and its subsidiary companies do not owe any money to the state, the legal team insisted in a statement Monday, accusing the Maldives Inland Revenue Authority of trying to “discredit the companies and damage the businesses”.



Yameen and Gasim

Lawyers representing Jumhooree Party leader Gasim Ibrahim’s Villa Group have decried lawsuits filed by the tax authority to recover US$166 million allegedly owed as unpaid rent and fines.

Villa and its subsidiary companies do not owe any money to the state, the legal team insisted in a statement Monday, accusing the Maldives Inland Revenue Authority of trying to “discredit the companies and damage the businesses”.

MIRA sued after the high court overturned civil court rulings in favour of Villa over the tourism ministry’s termination of the lease agreements for three islands and two lagoons in February 2015.

Villa’s lawyers noted that the Supreme Court has since concluded preliminary hearings on the five cases after the company appealed the high court decisions.

Stressing that the apex court is yet to rule on the dispute, the lawyers said Villa has been facing “immense losses” due to MIRA freezing the company’s bank accounts, suspending government services, and informing the media about the lawsuits.

Under the terminated lease agreements, the government agreed to defer rent and taxes for the islands and lagoons until December 2018 and December 2020, respectively, to allow Villa to develop resorts.

Villa also paid US$15 million as rent and advance payments, the lawyers said.

The five resort properties were leased as part of a settlement agreement reached in December 2013 after the Supreme Court ruled that Villa was owed US$9.7 million by the state.

However, after Gasim’s JP formed an alliance with the opposition Maldivian Democratic Party in early 2015, the tourism ministry abruptly cancelled the “amended and restated” lease agreements and the tax authority sought US$90.4 million allegedly owed as unpaid rent and fines.

The central bank subsequently froze Villa’s accounts.

The freeze was lifted after Gasim announced his retirement from politics and backed the government in several crucial votes, including a constitutional amendment that barred him from contesting in the 2018 presidential election.

By January last year, Villa had won back all five properties seized at the height of the political crisis in February 2015 after the civil court ordered the tourism ministry to comply with the lease agreements.

But in late 2016, the high court overturned the civil court’s ruling over the seizure of the Vaavedhdhi and Bolidhuffaru lagoons.

In late March, the tax authority also froze the bank accounts of Villa Shipping and Trading Company again over US$18 million allegedly owed as fines and unpaid rent for the island of Elaa in Thaa atoll.

The high court decision on Elaa was the latest in a series of rulings that overturned lower court judgments in favour of Villa after Gasim backed former President Maumoon Abdul Gayoom decision to withdraw support for the government.

Gasim went on to sign a pact with Gayoom and former President Mohamed Nasheed to form a broad opposition coalition and seize the parliament’s majority from President Abdulla Yameen.

The opposition denounced the freezing of Villa’s accounts for the second time as part of a “ramped up crackdown” after a failed bid to unseat the speaker of parliament.

But the government denied unfairly targeting Gasim’s interests. MIRA also asserted its independence and stressed that its role was limited to “collecting the money in a manner determined by the relevant agency and taking action if the money is not paid.”

In February, the high court also overturned a stay order issued by the civil court to halt the takeover of the Kaadehdhoo airport in Gaaf Dhaal atoll from Villa Air.

Gasim’s Villa Group is one of the largest companies in the Maldives with the holding company Villa Shipping and Trading operating businesses in shipping, import and export, retail, tourism, fishing, media, communications, transport and education.

The three islands and two lagoons were leased to Villa Shipping and Trading, Villa Hotels and Resorts, Villa Holidays, Gazeera Private Limited and Maanenfushi Private Limited.

After the crippling freeze in May 2015, Villa had advised some 4,500 employees “who find it hard to work with us to rebuild the company again” to resign and promised to pay outstanding salaries at a later date.

The JP leader is meanwhile among 14 opposition lawmakers facing legal action after the opposition secured a majority in the parliament to impeach Speaker Abdulla Maseeh Mohamed last month.

Gasim’s trial on bribery charges resumed in late July but has since been stalled after the 65-year-old was hospitalised for the second time in less than a month.