Audit uncovers multiple cases of corruption within MPL

The Auditor General’s Office has asked the Anti-Corruption Commission (ACC) to investigate millions in procurements by State-run Maldives Ports Limited (MPL) during former President Abdulla Yameen Abdul Gayoom’s administration which have been identified as likely cases of corruption and embezzlement.

The Auditor General’s Office released an audit, titled Special Audit Report on MPL’s Procurement 2015-2017, this week. It shows MPL had awarded contracts to specific handpicked sellers to procure assets such as pickups, lorries, boats and even flags, even though it could have procured such assets through competitive bidding processes.

The audit places the value of procurements for which MPL chose to obtain estimates from specific parties, despite the option of competitive bidding, at MVR 86.1 million.

MVR 69.2 million of the procurements were approved by the MPL’s Board of Directors, while MVR 15.2 million of the procurements were made as “emergency procurements”. The auditors, who investigated the each of the procurements, found that the circumstances did not warrant “emergency procurements”.

The Strategy and Regulation for Procurement of Capital Assets and Services by State-owned Enterprises, which MPL and other state-owned enterprises are required to follow, establishes that procurements, expect for emergency procurements, which are valued above MVR 25,000 requires an open tender.

The auditors concluded that MPL chose not to hold open tenders for the MVR 86.1 million in procurements with the deliberate intention of awarding the contracts to specific sellers.

The Auditor General has recommended that the ACC therefore investigate the procurement contracts.

A specific contract highlighted in the report is a MVR 1.8 million contract awarded to a specific company to procure 18 air conditioning systems, which was also listed as a procurement conducted under an “emergency circumstance”.

The auditors found that the company from which the ACs had been procured was not in the business of selling ACs, and estimates that the procurement was therefore MVR 428,065 over the market value.

The Auditor General has recommended that the ACC investigate why MPL procured the ACs in violation of procurement policy and at such an inflated value, and take action against the parties responsible.

Another occurrence specified in the report is when MPL, under a 2016 contract with an Indian company to procure payment bricks, paid the company’s local agent an extra MVR 169,728, after converting currency at the rate of USD 17, well above the bank rate, and paying the agent for quantities of pavement bricks which hadn’t been supplied.

The Auditor General has recommended that the MPL take action to recover the extra payment.

The auditors also found several instances from 2016-2017 when MPL sub-contracted projects without making contract agreements. The value of projects conducted without contract agreements is valued at MVR 164.80 million.

Another occurrence specified in the report is when MPL, in 2016 and 2017, acquired MVR 3.08 million in procurements from a company which a senior official from procurement holds interests in. The auditors found that it had been at this senior official’s initiative that companies owned or co-owned by three of the executive board members of a club – which the official is active in – had initiated procurement deals with MPL.

The report notes that MPL’s procurement policy restricts procurements from any company of any person who is linked with any MPL staff. MPL’s staff are also required to disclose companies which could pose conflict of interests in writing. The report noted that these requirements were not met when awarding contracts for MVR 3.08 in procurements to a company which the senior procurement official held interests in.

The Auditor General has recommended investigating the contracts linked with the official as it is evidence of deliberate acts to gain and facilitate undue benefits to specific parties.

Auditors also uncovered more acts of possible corruption involving procurement of other capital assets such as heavy-load vehicles and boats, decisions involving USD purchases which resulted in losses to the company, and instances where MPL incurred losses due to choosing not to obtain technical expertise when procuring machinery – which also resulted in wastage of machinery.