Confessions of an economic hit man

For the most part of 2014, the public did not see much of President Abdulla Yameen Abdul Gayoom, and the administration was mostly seen to be run by the then Tourism Minister Ahmed Adeeb Abdul Ghafoor, President Yameen’s economic ‘hit man’.  He was seen gaining power and becoming more and more important for Yameen. The Maldives’ parliament elections were held the same year, in 2014, in which the government secured a majority. 

How it began

As per the Special Audit Report published on 29 October 2014 by the then-Auditor General Niyaz Ibrahim, Maldives Ports Limited (MPL) issued MVR38.5 million to the Maldives Marketing and Public Relations Corporation (MMPRC) for the purchase of USD5 million on 24 February 2014. An additional MVR38.5 million was transferred to the MMPRC on 16 March 2014.  The MMPRC in turn transferred MVR38.3 million to the account of a private company, Millennium Capital Management Limited, for the purchase of USD2.5 million at the rate of MVR15.32 per US dollar. The second payment of MVR38.3 million was also transferred to the account of Millenium Capital on 16 March 2014. On the same day, this amount was withdrawn as cash from the account. 

Interestingly, as the Auditor General Ibrahim had noted in his report, MPL did not have a need for USD5 million during the year, and the company had already invested excess US dollars in treasury bills, while the company’s US dollar account showed a significant balance during that time. 

MMPRC is a 100 percent state owned company, and its annual budget comes mainly from the state. The company does  not earn in US dollars either. During the first four months of 2014, the company had about USD329,723 on average in its US dollar accounts. Yet, the company issued two dated cheques to MPL to sell US dollars to the latter. Until these transactions with MMPRC, MPL had in 2012 and 2013 mostly purchased US dollars through banks or companies that earned in US dollars. 

On 9 April 2014, MMPRC requested Maldives Tourism Development Corporation (MTDC) for a loan of USD1 million. The reason specified in its letter was for an urgent payment related to tourism promotion. However, according to the Auditor General’s report, no such payment was due at the time. On 13 April 2014, MTDC granted a loan of USD1 million to MMPRC to be repaid with a finance charge on 15 May 2014. Upon receiving the funds, on 15 April 2014, MMPRC entered into a loan agreement with a private company, Montilian International Pvt Ltd., and transferred the one million dollars to this company. Upon examination it becomes clear that 35 percent of Montilian’s shares were previously held by Adeeb, and his shares had since been transferred to his father in March of 2012. 

Corruption and money laundering

At the end of his report, the Auditor General issued nine conclusions/recommendations, that were directed at other relevant state institutions. The first was that MVR77 million of state funds were suspected of being embezzled through MMPRC and other private companies — the Auditor General called upon investigative authorities to look into the matter, and hold those responsible accountable. Under the fourth point, the Auditor General highlighted that there were financial transactions conducted outside the accounting records of MMPRC, and that such transactions amounted to corruption, and embezzlement, of state funds. 

However, instead of addressing these issues the Yameen administration, with a majority in Parliament, and with Adeeb's added influence, amended the Audit Act, and Niyaz Ibrahim lost his job. A new Auditor General, Hassan Ziyath — who is the brother of the Managing Director of MMPRC, Abdullah Ziyath — was then appointed to the post. 

This paved the way for the beginning of the next scheme on corruption, and embezzlement, the one to become the biggest scheme in the history of Maldives. 

Marketing firm selling off islands and lagoons

MMPRC, headed by Adbullah Ziyath who is a close friend of Adeeb, was acting beyond its mandate, and was taking an active role in issuing islands and reefs for tourism development. It was widely known that any investor looking to develop a tourist resort should get an "appointment with Adeeb" — a bribe to Adeeb would secure any available island or a reef. The acquisition fee, to be paid to the state, was also allegedly pocketed by Adeeb. 

Under normal circumstances, the acquisition fee would be paid by cheque to the Maldives Inland Revenue Authority (MIRA), which in turn would automatically deposit the funds to the Public Bank Account (PBA) at the central bank, the Maldives Monetary Authority (MMA). The Public Finance Act (PFA) prohibits any revenue or public funds to be held in any other bank account other than the single treasury account PBA. Everybody, including the Commissioner General of the Tax Authority, MIRA, and the Finance Minister, knew that a large number of new islands were being issued to investors by MMPRC, and that acquisition fees were due from these investors.

Nobody questioned why the acquisition fees were not being deposited in to the government account.

Most cheques collected by MMPRC were ‘endorsed’, by having the stamp of MMPRC together with the signature of the Managing Director of MMPRC, and a handwritten note stating the name of the account the funds were to be deposited in. The cheques were then deposited to the accounts of a private company, and the cash swiftly withdrawn. It was later discovered that a private company named SOF Pvt Ltd., was used as a vehicle to deposit most of these cheques, and the money was dispersed into other accounts thereafter. Cash was also withdrawn in large amounts from the Bank of Maldives (BML). 

A total of 53 islands/reefs were leased out by Adeeb and his team over the period June 2014 to October 2015. 

Acquisitions fees paid by the investors were collected in cheques made in the name of MMPRC. A total of USD77.5 million was collected as acquisition fees. Of this, only USD12.5 million was actually deposited to the bank account of MMPRC. A large portion, USD 54.5 million, was deposited to the bank account of SOF and USD5 million was deposited to the bank account of Millennium Capital Management, the same company involved in the laundering scheme back in 2014 through MPL.

Crashing to a halt

Everything came to a halt when an Improvised Explosive Device was set off on board the presidential yacht on 28 September 2015 — reportedly an assassination attempt targeted at President Yameen.  Adeeb was arrested as the main suspect, and was later sentenced to 33 years on terrorism charges. 

President Yameen ordered an investigation into Adeeb's corruption and the Auditor General's office, together with the Police, uncovered the MMPRC corruption scheme. 

Al Jazeera English aired a documentary titled "Stealing Paradise" in September 2016, in which close associates of Adeeb confessed, and claimed that embezzled funds were delivered to President Yameen in bags loaded with cash. 

As soon as the Solih administration came into power, Adeeb was transferred to house arrest from prison and his sentences were commuted by the court. While under house arrest, and surveillance by the police, Adeeb escaped the country on board a cargo ship, and was arrested again in India on 1 August 2019. 

Confessions

According to Adeeb's confessions and phone records, the embezzled funds were distributed as bribes to many lawmakers, both in the government and the opposition. Judges, heads of state institutions and cabinet ministers were also among the beneficiaries.

Soon after coming to office, President Ibrahim Mohamed Solih mandated the Asset Recovery Commission, empowered by Presidential Decree and later through legislative amendments, to investigate outstanding issues of corruption and to recover state funds.

The parliament on 12 May, after several days of pressure from the public, published a report with a list of over 280 names of individuals and companies as beneficiaries of these funds. This comes almost two and a half years after the Solih administration, with its stated commitments to “Zero Tolerance” of corruption and to swiftly and thoroughly investigate and recover the MMPRC embezzled funds, came into office. This also came after the leader of Solih’s own party, and Speaker of Parliament Mohamed Nasheed, had spoken publicly about the slow pace of the President’s own Asset Recovery Commission in investigating the MMPRC case.

To this day Adeeb, who has been sentenced to jail, makes his home in a luxurious apartment in Hulhumalé — and not a single laari of the embezzled funds has been recovered.