Finance Minister Ibrahim Ameer has revealed that a police case has been filed against former Housing Minister Dr. Mohamed Muizzu regarding the compensation the government has to pay Noomadi Resort and Residence (Noomadi).
Noomadi Resorts and Residences was contracted to construct 700 housing units under the private villa model on January 20, 2011, and to develop 500 housing units, Police Academy Phase I, and sewerage systems in three islands on May 30, 2013. However, the agreements were terminated by the previous government, claiming that the company had violated the terms of the contract. The company denied the claim.
The termination led to the company filing a claim for US$155 million as compensation, and other arbitration charges at the Permanent Court of Arbitration in The Hague, Netherlands.
When the arbitration case was first filed on December 11, 2017, Dr. Muizzu took part in the discussions and decisions were made by the state on how to handle the case with the involvement of Dr. Muizzu in the capacity of the government's housing minister.
After the minister lost his position on the government on November 17, 2018, Dr. Muizzu on 14 June 2019 gave a statement as a witness against the state produced by Noomadi in their arbitration claim. His statement against the state contradicted his previous stance on the issue while he was minister.
While Dr. Muizzu had previously given a statement to the arbitration that the Phase I agreement between the government and Noomadi was terminated on former President Abdulla Yameen Abdul Gayyoom's wishes, he later changed his statement to state otherwise. Dr. Muizzu's statement against the government in the arbitration claim had caused additional challenges to the government in defending itself in the claim.
Speaking at the Parliament on Tuesday, Finance Minister Ameer said investigation of the case showed that the former Housing Minister had changed his statement in such a way that weakened the state's defence in the arbitration claim. Ameer further said that the current administration is forced to issue compensation to Noomadi due to the negligence of the previous government. A police case has therefore been filed to investigate the matter, said Ameer.
“We have forwarded the case to the police to conduct a criminal investigation and to take legal action against the former Housing Minister Muizzu through the Prosecutor General's Office," said Ameer.
While Dr. Muizzu was previously summoned to the relevant parliament committee for questioning over the issue, the committee decided to file a police against Muizzu for providing false information to the committee.
The current government reached a settlement agreement with the company on August 25 2019. According to the out-of-court settlement, the government will pay the company US$ 55 million as compensation. The decision to settle the arbitration issues out of court was made after extensive discussion with the settlement committee established by President Ibrahim Mohamed Solih. The first payment of US$ 27.5 million was paid by the government on 5 September 2019. The remaining half of the total payment has now been completed.