The government was forced to pay out MVR 26 million as compensation less than two weeks into the new year because of a settlement agreement made by the previous government’s settlement committee, the Finance Ministry said yesterday.
The weekly fiscal development report published by the ministry shows that the funds were released during the first week of the year. However, the ministry said the company could not be named due to a non-disclosure clause in the settlement agreement.
Speaking to Adhadhu, Finance Minister Dr. Mohamed Shafeeq said the payout was made on the advice of the Attorney General as further costs would be incurred over delays in disbursing the funds as agreed upon by the government.
“This was an agreement made to make the payment last year. It was agreed not to disclose [the compensated party] in the agreement,” Shafeeq said.
Payments under settlement agreements are made after the Attorney General’s office reviews each agreement, Shafeeq added. No work is ongoing on any further settlements in addition to agreements previously signed, the minister assured.
Work related to a settlement agreement has not been done since the government came to power, Shafeeq said. After assuming office, President Dr. Mohamed Muizzu dissolved the settlement committee formed by the previous government.
While a quarter of the MVR 101 million budgeted for compensation this year was used during the first week of the year, the amount allocated for compensation this year is fourfold the amount budgeted last year. The compensation payouts include funds disbursed over settlement agreements and international arbitration rulings.
