Government Halts USD 64 Million Compensation, Declares Settlements Invalid

The government has halted the disbursement of compensation of over USD64 million approved by the former administration led by the Maldivian Democratic Party (MDP).

A statement issued by the Attorney General’s Office (AGO) said nine settlement agreements signed by the previous government on 28 November, 2022 have been deemed invalid by the Attorney General (AG). The AGO has informed relevant state agencies of the decision, stating that the agreements do not have to be implemented.

The statement said President Dr Mohamed Muizzu dissolved the Settlement Committee, formed under the Guideline for Resolution of Disputes Relating to Agreements between the Government and Private Parties, as the guidelines lacked legal status and authority. The President has further instructed the AGO to re-assess the cases that led to the settlement agreements.

Before the dissolution of the settlement committee, the committee had approved compensations worth USD 14.6 million prior to 17 November 2023. Moreover, the committee is estimated to have decided to grant USD 64.8 million worth of assets and funds as compensation to various parties. Details of Compensation Agreements: – Leisure Beach Private Limited: Extension of the lease of Fohtheyobodufushi, Vaavu Atoll
– U-Met Construction Private Limited: USD .68 million
– Exotic Properties Private Limited: Lease of Ekulhivaru, Noonu Atoll, for 99 years
– Dheebaja Investment: USD4.15 million
– Amson and Food Beverage Private Limited: USD330,739
– Slia Sands Private Limited: Vanbadhi of Thaa Atoll, its Kani and Fushi for 50 years, and Maafarufalhu of Alifu Alifu Atoll
– Blue Lagoons Investment: Madoogalee of Alifu Alifu Atoll for 50 years, and Villingili, Thaavathaa, Orimasfaru of Raa Atoll for 50 years instead of USD20 million
– Abdulla Ali, H. Giritherege: Hondaafushi of Haa Dhaalu Atoll for 50 years, and waiving rent and fines for the island
– JH Resorts Private Limited: Kudamuraidhoo of Haa Dhaalu Atoll for 50 years and waiving pending rent and fines

The statement said while the Parliament’s Public Finance Committee had reviewed the cases concerning the nine settlement agreements and declared the agreements as invalid in origin, the President had directed the AGO and relevant authorities to take all legal steps to terminate the agreements, recover any compensation paid under the policy and agreements, and take necessary action against the parties involved.

The AGO further said its investigations found that the policy underlying the agreements had been formulated in violation of the Maldives’ Constitution. It further noted that the settlement agreements were signed without consulting the state’s Auditor General, in such a way that it paved the opportunity for undue profits for certain individuals.

The AG has therefore informed relevant state agencies that the nine settlement agreements in question are not legally binding, are invalid and do not have to be enforced.