Business Crime

Fenaka’s once rumoured graft comes to light with shocking audit report

Fenaka powerhouse in Fuvahmulah island. PHOTO/FENAKA

The latest audit report on Fenaka Corporation has exposed major cases of corruption within the state run utilities company.

The report signed by Auditor General Hassan Ziyath was released Wednesday amidst loud public accusations of Fenaka being a “graft hub”. The report appears to confirm the speculations as the Auditor General’s Office has detailed several issues of graft involved in Fenaka’s transactions and dealings, including purchase of US Dollars and fuel, awarding of projects and release of large sums of money.

The audit report highlighted that Fenaka Corporation does not have a transparent, competitive bidding policy to manage its assets, services and project assignments. Fenaka has operated a number of projects in ways that provide illegitimate gains to specific companies or entities, the report said.

Furthermore, the Auditor General noted that corruption had been involved in purchase of generators, purchase of US Dollars from unauthorized sellers to whom MVR 5 million had been paid as commission, 23 transactions of MVR 12.6 million without payment vouchers, and 14 transactions of MVR 34 million without invoices.

The report further disclosed that Fenaka had issued funds in advance before awarding projects to contractors, which is a violation of contract policies. The company has also spent MVR 21 million to purchase diesel from private suppliers.

Fenaka Corporation audit report highlights

  • Took quotations from a single company to purchase 38 generators on various counts in 2014, under an emergency policy. The audit report alleges it was done to provide illicit gains to a specific entity.
  • Spent an additional MVR 21.8 million in 2014 and 2015 to purchase diesel from private suppliers who sell fuel at rates higher than state-run Fuel Services Maldives (FSM).
  • Took quotations from several companies believed to be owned by a single entity in 2015, and spent total MVR 4.3 million to purchase diesel from them. Fenaka’s cheques to all the companies were received by the same recipient.
  • Took quotation from a single company to purchase MVR 26 million of diesel for generators of Fenaka’s branches in several islands of Thaa atoll. The company’s diesel rates were, on average, MVR 1.29 higher than FSM’s fuel rates for Fenaka.
  • Sent requests for proposal (RFPs) to the same companies each time to award some water and sewerage projects assigned to Fenaka by the government. While the projects were awarded, in parts and on different counts, to two foreign firms, Fenaka had sent RFPs to companies that had failed the technical evaluation as well. Thus, the audit report alleges that corruption was involved in awarding the projects to the two foreign companies.
  • Did not deduct penalties (of MVR 2 million) as compensation while releasing money to contractors who had failed to provide goods and services to Fenaka within the period of time specified in their contracts.
  • Awarded the task to procure equipment for Fenaka’s showroom in Addu atoll Hithadhoo island to the third best bidder.
  • Awarded a project to a contractor without a credit period, resulting in an additional MVR 2.3 million in expenses for the project and, thus, failed to earn the actual profit due to Fenaka.
  • Spent MVR 95 million to purchase US Dollars from private sellers, paying them MVR 5 million as commission. Fenaka also purchased dollars from unauthorized sellers.

The audit report listed several more unlawful transactions and corruption cases uncovered from Fenaka Corporation.

Full details are available from the link below:

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