Government’s seizure of Villa’s resort properties unlawful, civil court rules

The civil court has ruled that the government’s seizure of two lagoons leased to Jumhooree Party leader Gasim Ibrahim’s Villa company in February was unlawful.

Shortly after the JP formed an alliance with the main opposition Maldivian Democratic Party in February and launched an anti-government campaign, the tourism ministry terminated the lease agreements of two lagoons and three islands leased to Villa and subsidiary companies for resort development.

In May, the central bank froze the bank accounts of Gasim’s Villa Shipping and Trading and subsidiary companies over US$90.4 million allegedly owed as unpaid rent and fines for the properties. The bank accounts were released after the JP backed the government in several crucial votes in parliament and agreed upon a two-year payment plan.

The civil court meanwhile ruled on Thursday that the tourism ministry’s cancellation of the leases for Kaafu Vaavedhdhi and Bolidhuffaru was invalid and in breach of the terms of the lease agreements.

In late August, the court had also ruled in favour of Villa over the cancellation of the lease for Gaaf Dhaal Gazeera. The court ordered the tourism ministry to comply with the lease agreement.

The Villa Group maintains that it does not owe any unpaid taxes or fines. The company previously said that the claim cost it a US$80 million loan and brought it to the brink of bankruptcy.

Villa had won the tax authority’s “Ran Laari” award last year as one of five companies that paid the highest amount to the state.

In May, Villa 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.

Villa Hotels operate four luxury resorts in the Maldives. The parent company, Villa Group, operates businesses in shipping, import and export, retail, tourism, fishing, media, communications, transport and education.

In August, local media reported that Gasim was planning to sell the Royal Island Resort for more than US$100 million.

“I will sell what I have to sell to pay debts and give what I owe,” the business tycoon told The Maldives Independent at the time.

Gasim returned to the Maldives in early July after spending nearly three months overseas, during which he announced his retirement from politics once his term as MP for Maamigili ends in 2019.

He had also backed a constitutional amendment that disqualifies from contesting in the 2018 presidential election.

Several opposition politicians, including former Defence Minister Mohamed Nazim and former President Mohamed Nasheed, were arrested and sentenced to jail shortly after the formation of the JP-MDP alliance, triggering a prolonged political crisis.

Adhaalath Party President Sheikh Imran Abdulla was meanwhile charged with terrorism along with two JP leaders and accused of inciting violence at a mass rally on May 1.

The JP leaders, Ameen Ibrahim and Sobah Rasheed, subsequently fled the country and are living in self-imposed exile in the UK.

Gasim has meanwhile declared his support for President Yameen in the wake of the September 28 blast on the president’s speedboat, which the government says was caused by a bomb. Yameen escaped unhurt, but First Lady Fathmath Ibrahim was hospitalised for spine injuries.

Former Vice President Ahmed Adeeb, several of his associates and three soldiers are in custody on suspicion of plotting the alleged assassination attempt.