Auditor General's Office on Thursday revealed that the negligence of banking institutions is significant in the embezzlement of state funds through Maldives Marketing and PR Corporation (MMPRC).
Maldives Media and PR Corporation (MMPRC) had mediated the leasing of over 59 different tourist hotels, resorts and yacht marinas out of which 53 had been leased through an agreement with the tourism ministry. The official audit report into the scandal, had revealed that over US$ 79 million had been embezzled through the state tourism promotion company.
Speaking on the report on the MMPRC scandal at the Parliament's Public Finance Committee, Assistant Auditor General Ibrahim Aiman said funds in millions of dollars receivable by the state as acquisition costs for uninhabited islands were diverted to private companies through endorsed cheques. Cheques received as acquisition cost paymeds were endorsed and deposited into the accounts of three companies against MMPRC's board resolution, Aiman revealed.
Aiman revealed that according to MMPRC's board resolution, cheques can be endorsed with the signature of two board members of the cooperation. However, most of the cheques endorsed during the embezzlement were signed by then Managing Driector of the company, Abdulla Ziyath only. Therefore, the bank should be held accountable for the oversight, said Aiman.
"A statement released by the bank says the authenticity of endorsed cheques do not need to be verified. However, the board resolution sent to the bank clearly states that endorsed cheques should have the signatures of two board members. Therefore, the endorse process was incomplete when the cheques were processed and deposited into these accounts", explained Aiman.
While the government was to receive US$ 79 million through leasing islands for tourism, the state only received US$12.8 m from the amount. The funds were mainly funneled though three private companies named SOF Private Limited, Millennium Capital Development, and Montillion International Private Limited
The transactions were conducted through local currency Rufiya and US dollar accounts of the companies opened in multiple banks operating in the Maldives. While majority of the transactions by SOF Private Limited were conducted through bank accounts at Bank of Maldives (BML), many have pointed fingers at BML for their negligence.
However, BML revealed that they identified suspicious activity on SOF's accounts, and notified relevant authorities an year before the issue became public.
The Auditor General's Office was asked several questions regarding their involvement in the scandal by the Public Finance Committee on Thursday. Responding to the committee's questions, Aiman said the whole systam had failed in addressing the graft. While two reports have been issued regarding the scandal and shared with all relevant authorities, no steps have been taken regarding the matter, Aiman alleged.
