A special audit report on MIFCO has revealed embezzlement by setting up a joint venture company since the government of former President Mohamed Nasheed.
The Auditor General's Office on Sunday released the "Special Audit Report on Joint Venture Companies Involving the Maldives Industrial Fisheries Company Limited (MIFCO)" in which serious issues have been raised.
Marine Maldives Products Pvt Ltd (MMP)
MMP was established in 2011 with a 30 percent stake of MIFCO, a 35 percent stake of Thailand's MMP International Pvt Ltd (MME International) and a 35 percent stake of IOF Corporation Pvt Ltd (IOF). After the establishment of the company, former President Mohamed Nasheed decided to sell 25 percent of MIFCO's shares to the public.
The newly formed company, which had planned to invest in fisheries, tourism and construction, failed to achieve its objectives and posted a loss of MVR 44.5 million from 2011 to 2016. In addition, MIFCO has spent MVR 13 million from its budget to run the company.
Thailand's MME International has not paid MVR 30.2 million to buy shares in the newly formed company. Out of the MVR 30.2 million owed by the IOF, MVR 5.5 million was outstanding while MVR 24.7 million was paid by in exchange for a barge.
According to the business registry, IOF is registered at Henveiru Maadhoo and the shareholders are Mohamed Manik and Ali Niman. The company has not obtained any business permit other than a counter business permit.
MV Barosa, the largest vessel in MIFCO at the time, worth MVR 18.5 million, was also given to the company to buy the shares of MMP. It has a capacity of 1,999 metric tons. After handing over the vessel to MMP, MIFCO paid MMP MVR 117 million over six years for exporting fish on the vessel.
MMP's assets mortgaged for IOF loans
IOF in 2015 took an MVR 77 million loan after mortgaging assets including two MIFCO vessels provided to MMP worth MVR 43.2 million. The loan from BML was taken with an agreement to provide MVR 31 million to MMP.
However, the audit report noted that the money was not paid as agreed and this was done fraudulently so that all the benefits went to IOF alone. The IOF has not repaid the loan, bringing the amount due by 2020 to MVR 79 million.
IOF benefits from the purchase of Funaddoo to MIFCO
The IOF is also behind the USD 1.5 million (MVR 23.1 million) purchase of the Funaddoo fisheries facility by MIFCO in 2021. The funds were arranged by the government but the transaction was done without the consent of the MIFCO board. The audit report noted that Funaddoo is an IOF property.
MIFCO bought the property from IOF on a direct sales basis while IOF was trying to sell it after failing to repay a loan taken from BML. According to the audit report, more than MVR 154 million is needed to make Funaddoo operational.
Benefits for Thailand company
The audit report did not include details about the MIFCO joint venture company. However, Adhadhu understands that MME International of Thailand would also benefit significantly from its share in MMP.
According to MME International's website, the agreement with the government to establish the joint venture will ensure that the company will get skipjack tuna and yellowfin tuna from the Maldives. The company will have control of one-third of Maldives annual fish exports.
Under the agreement, the company will also be handed over the operation of Felivaru, the company's website said.
Losses from Ukulhas MIFCO
The audit report also noted that MIFCO had suffered a total loss of MVR 1.55 million by establishing MIFCO Ukulhas Maldives Fisheries Company (MIFCO Ukulhas).
The audit report said that the joint venture company has not achieved its objective and MIFCO has suffered huge losses while not taking any measures.
The audit report recommended the Anti-Corruption Commission (ACC) to investigate the matter.
