Fenaka ordered to pay MVR 7.9M in 15 days

Civil Court has ordered Fenaka Corporation to settle MVR 7.9 million debt to LF Construction Private Limited within 15 days on Wednesday.

LF Construction has been contracted by Fenaka for various projects and has sold numerous goods to the state-owned company.

The company sued Fenaka for MVR 7.8 million in outstanding payments for various projects and goods.

The company was seeking MVR 7.9 million in total from Fenaka, including MVR 40,000 incurred in legal fees to submit the case to the court.

Projects completed by LF Constructions for Fenaka:

• Boundary wall around GA. Dhaandhoo’s new office building
• Boundary wall around GA. Kanduhulhudhoo’s new office building
• New powerhouse building in HDh. Finey
• Day tank area, main tank and chimney in HDh. Hirimaradhoo
• Unfinished works at new powerhouse building in HDh. Vaikaradhoo
• Unfinished works at the office building in L. Hithadhoo
• Boundary walls and chimney at powerhouse building in M. Dhiggaru
• Unfinished works at the new office building in N. Holhudhoo
• Construction of new powerhouse building in GA. Kondey
• Boundary walls at the powerhouse in R. Meedhoo
• Unfinished works at the new powerhouse and office buildings in Sh. Maaungoodhoo
• Construction of powerhouse in Th. Omadhoo

The projects were carried out under agreements executed between LF Constructions and Fenaka from 2019 to 2022.

Civil Court sentenced Fenaka in absentia. As per the ruling, Fenaka had not responded to the claim within the timeframe granted by the court nor had submitted evidence in defense.

The court ordered Fenaka to pay LF Construction MVR 7.9 million in total, accounting for MVR 7.8 million in outstanding payments and MVR 40,000 in legal fees, within 15 days.

The incumbent People’s National Congress (PNC) administration, which defeated the MDP in the 2023 presidential elections, had described Fenaka as a “labyrinth of corruption”. As per the current administration, Fenaka’s debt burdens stood at MVR 4.3 billion when it assumed office.

Fenaka has seen the number of employees increase by thousands throughout different administrations, pushing it deeper and deeper into financial crisis.

Mohamed Muaz Rasheed who was initially appointed the company’s managing director after the current administration assumed office announced his resignation on Monday after one year of service, expressing frustration over what he described as an “impossible” situation, which he blamed on a staggering MVR 4.3 billion in debt at the time of his appointment, having to hire employees beyond the corporation’s capacity, lack of cooperation from relevant authorities to rightsize the corporation, a significant mismatch in cash flow, and the failure to clear years of backlog created due to lack of proper maintenance of utility services in multiple islands. He was replaced by Major (Retired) Mohamed Najah.

Notably, Ahmed Saeed Mohamed, the former managing director of Fenaka and Mariyam Dheena Solih, former procurement head, were charged with corruption on Thursday.