Business Corruption Crime Money Laundering

Bank of Maldives implicated in MMPRC corruption scandal

The presidential commission on corruption and asset recovery has disputed claims of innocence by the Bank of Maldives over its alleged role in enabling the theft of MVR1.4 billion (US$90 million) from the Maldives Marketing and Public Relations Corporation.

The stolen funds were funnelled through the national bank after cheques paid to the MMPRC as resort acquisition fees were deposited to the account of a company called SOF.

Contrary to assertions that the bank did not honour non-negotiable cheques – in violation of a legal requirement for such cheques to be deposited only to the payee’s account – the bank had accepted six not-negotiable cheques paid to the MMPRC and deposited the funds to SOF’s US dollar account, Speaker Mohamed Nasheed revealed at the start of Monday’s sitting of parliament, citing a letter from the presidential commission.

The commission’s probe into the MMPRC embezzlement scheme – a corruption scandal of unprecedented scale in Maldivian history – is ongoing.

Last week, parliament asked police to investigate and seek charges against Bank of Maldives Deputy CEO Mohamed Shareef for allegedly lying to the public accounts committee about endorsing non-negotiable cheques.

The perjury probe is now underway, Speaker Nasheed told MPs.

Last Tuesday, the bank defended Shareef and insisted that his testimony to the oversight committee was based on “available bank records.”

Shareef’s insistence that the bank did not deposit non-negotiable cheques to SOF’s account was also disputed by the Anti-Corruption Commission last week as a photo of a non-negotiable HSBC cheque started circulating on social media.

In a statement, the Bank of Maldives said it did not start keeping records with the originals or images of cheques from other banks until 2016. The bank started clearing cheques under a new imaging and truncation system during the year, it said.

“The HSBC cheque was deposited after HSBC cleared the payment without asking [Bank of Maldives] to return the cheque to the customer. Such cheques are returned to the [cheque issuing] bank through the Maldives Monetary Authority for recordkeeping. The only record kept at this bank will be the cheque deposit slips,” Shareef wrote in a letter to the speaker after parliament announced it would seek perjury charges.

Shareef insisted his testimony was truthful to the best of his knowledge and was based on available records.

He claimed to have learned about the HSBC cheque after appearing at the committee.

Shareef was questioned by the public accounts committee earlier this month after the anti-corruption watchdog implicated dozens of bank employees over alleged collusion in the MMPRC scandal.

He claimed the bank had followed legal procedures and repeatedly insisted that staff were innocent of any wrongdoing.

He also defended the endorsement of cheques sent from the MMPRC without the signature of two board members as required by the company’s policy. These cheques were deposited to SOF’s account as requested by the MMPRC’s former managing director because the Bank of Maldives was not obliged to follow a company board resolution, Shareef told MPs.

The MMPRC scandal was first exposed in a damning audit report released in February 2016, which implicated former vice president Ahmed Adeeb and his associates in siphoning off fees paid to lease islands and lagoons for resort development.

Shortly thereafter, a Bank of Maldives official was arrested and jailed for disclosing information about the scandal.

According to a bank statement leaked by whistleblower Gasim Abdul Kareem, more than US$84 million was channelled through SOF’s US dollar account between May 2014 to October 2015.

Full details are available at the link below:

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Source URL:  Maldives Independent

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