Former Managing Director of the Male' Water and Sewerage Company (MWSC), Abdul Matheen, has criticised President Mohamed Muizzu’s decision to buy back the 20 percent stake held by Japan’s Hitachi in the utility provider to make it a fully state-owned enterprise.
"That [buying Hitachi's shares] is something the President wants. However, it is a misguided approach," Matheen said during an appearance on Adhadhu’s 'Etherefuh' program.
Matheen argued that spending millions of dollars to acquire these shares is illogical at a time when the state’s financial situation is so dire that the Finance Minister is "carrying a begging bowl" to secure budget support.
"First of all, the current situation is that the Finance Minister is out there with a begging bowl seeking budget support. How many millions of dollars would be needed to buy that 20 percent stake? It would be 20, 30, or 40 million dollars," Matheen said.
He further suggested that such decisions are a result of ministers and high-ranking government officials being unfamiliar with the principles of corporate governance.
Matheen cited the Maldives Tourism Development Corporation (MTDC) as another example. He noted that while efforts are being made to ensure the tourism industry puts dollars directly into the pockets of citizens, it is contradictory to attempt to divest an island held by MTDC.
Criticising the management of state-owned enterprises (SOEs), Matheen highlighted a failure to uphold corporate governance standards. He attributed the poor performance of these companies to the Privatisation and Corporatisation Board (PCB) failing to fulfil its mandate, as well as a lack of adequate power and independence for both the PCB and company boards.
Matheen stated that while SOEs are established to operate as independent corporate bodies free from political influence, they are currently being treated as government departments and utilised for political purposes.
When discussing the ideal management model for major state companies, Matheen suggested listing them on the stock exchange and increasing public shareholding so citizens can benefit directly. He added that the government’s role should be limited to policy-making, monitoring, and regulation, while leaving operations to management and the board.
The 20 percent stake in MWSC was sold to Hitachi in January 2010 during the then-MDP administration. The transaction involved 53,400 shares at a rate of $305.9 per share, totalling $16 million.
At the time, the government stated the sale was necessary because the state had to acquire shares previously held by Denmark’s HOH Water Technology until late 2008. When MWSC was established in 1995, HOH Water Technology held a 24 percent stake in the company.
