Fenaka audit: Minister demands full probe into scandal

Local Governance Minister and former MP Adam Shareef Umar has urged a thorough investigation into all individuals implicated in the extensive financial irregularities at Fenaka Corporation, asserting that former Managing Director Ahmed Saeed Mohamed could not have acted alone in the alleged embezzlement.

Minister Shareef’s call for action follows the release of an audit report published on June 30, detailing numerous alleged cases of corruption within Fenaka between 2021 and 2023, a period coinciding with the previous Maldivian Democratic Party (MDP) government.

In a post on the social media platform X, the minister highlighted his past efforts to bring the issues at Fenaka and the infamous ventilator corruption case during the MDP administration to the attention of parliament.

Shareef, who served as a People’s National Congress (PNC) MP in the 19th parliament, where the then-ruling MDP held a supermajority, expressed dismay that neither the parliament nor independent institutions had addressed the matter.

He emphasized that Saeed alone could not have orchestrated "such big thefts" and that evidence now suggests the involvement of many individuals. The minister stressed that it is the state's responsibility to delve deeply into the entire case and conduct a fair investigation into all those involved, rather than singling out one person. He also called for the recovery of all funds lost in these cases.

On April 11, 2023, Adam Shareef had indeed tabled an emergency motion in parliament, advocating for a management and financial audit of Fenaka to identify the causes of the escalating debt and those accountable.

He also urged the government to formulate a debt repayment plan and implement measures to prevent the company from facing bankruptcy. However, the motion was rejected by a majority vote of 18 out of 33 members present.

The audit of Fenaka has uncovered significant irregularities and indications of embezzlement, revealing that the company is alleged to have committed theft and embezzlement totaling MVR 2,000 million.

The minister's statement also brings to light the previous government's payment to a Dubai company during the COVID-19 pandemic for ventilators that were never delivered. The government had sought compensation from the company, amounting to USD 2.1 million (MVR 32.5 million), plus interest and arbitration costs. In February of last year, arbitration ruled that the company must pay USD 1.8 million for the ventilators, along with two percent annual interest until payment, bringing the total owed to the Maldivian government to MVR 34.5 million.

Saeed is currently facing corruption charges in connection with the Fenaka cases, with legal proceedings ongoing in court.

Audit uncovers excessive meal expenses and irregular contracts

The special audit report by the Auditor General's Office has also exposed that Fenaka Corporation significantly overspent on meal expenses for contractors on its projects between 2021 and 2023, exceeding the designated budget by an additional MVR 14.2 million. The report underscores alleged financial irregularities within the state-owned company during this period.

The audit found that Fenaka outsourced catering services for temporary project employees across various islands, with agreements providing employees with a substantial six meals a day: breakfast, 09:00 tea-time, lunch, evening tea, dinner, and a late-night meal.

A critical issue identified was Fenaka's insufficient record-keeping. Auditors encountered difficulties in obtaining documents detailing the exact number of employees for whom meals should have been provided. To circumvent this, attendance sheets were used to verify employee numbers, which revealed that some contractors were overpaid for meals, billing for more employees than were actually present for work in different months.

The audit office also reported that Fenaka paid MVR 32 million to an Indian-registered company, 'Haveeru International', from 2022 until last year, noting that the majority of these funds were deposited into Maldivian companies and accounts belonging to Maldivians. Haveeru International was incorporated on June 06, 2022, according to the India Filings website, which lists its directors as Indian nationals.

The audit revealed that Fenaka repeatedly awarded works to Haveeru International without public announcements or competitive tenders. Furthermore, the audit report found that before awarding contracts, Fenaka typically sent invitations to tender to only one bidder, with only Haveeru International submitting bids.

President Muizzu announces asset recovery bill

On Friday evening, President Dr. Mohamed Muizzu announced that the government would introduce an asset recovery bill at the start of the next parliamentary session. The President stated that the purpose of this bill is to investigate the major cases of corruption and theft in the country in recent days, ensuring that those involved in these thefts cannot escape accountability once the investigations are complete.