Muaz resigns as Fenaka’s MD amid mounting financial woes

Muaz Mohamed Rasheed stepped down from his role as the managing director of Fenaka Corporation on Monday, as the state utility company grapples with mounting financial woes.

He shared his resignation letter in a post on X on Monday morning.

Muaz, who was hired as the head of Fenaka on November 29, 2023, noted in his resignation later that the corporation had racked up a staggering MVR 4.3 billion in debt at the time of his appointment.

But he expressed satisfaction at “producing positive results in efforts to provide uninterrupted services to the public despite the numerous challenges the corporation faced” during his one-year tenure.

He said that while a company should shape its operations based on its income, Fenaka’s dire financial situation makes it “impossible.”

He shared key reasons for the corporation’s dire situation, including:

• MVR 4.3 billion in debts 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
• Failure to clear years of backlog created due to lack of proper maintenance of utility services in multiple islands.

ފެނަކަ ކޯޕަރޭޝަންގެ މެނޭޖިންގ ޑައިރެކްޓަރގެ މަގާމުން އިސްތިއުފާ ދީފިން. pic.twitter.com/TmadBgkvqw

— Muaz Mohamed Rasheed (@muazmr) December 23, 2024

Muaz said that despite the dire situation, he had initiated multiple efforts to improve the efficiency of the corporation’s operations and cut costs, which he said had helped save over MVR 160 million in expenses by the end of October.

“But I want to bring to your attention that given the high debt the corporation has racked up, reducing operational costs alone is not enough to save the corporation from the situation it currently faces,” said Muaz, in his letter to President Dr. Mohamed Muizzu.

Muaz said that Fenaka had shared plans formulated to overcome its current situation with all relevant authorities, but that “a path forward has not been found to date.”

He also expressed concern over the delay in salaries to employees in both October and November – something that he said the corporation “had never faced in recent history.”

 Muaz said that the corporation had repeatedly reached out to the Finance Ministry seeking solutions to the issues facing the corporation.

“As such, I hereby resign from the position of managing director of Fenaka Corporation Limited effective immediately, as due to having to spend well beyond the revenue it generates, the corporation’s operational capacity has deteriorated to the level that it is unable to provide services in a sustainable manner, and I find no path for a resolution to this situation by remaining in this post,” he said.

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

The incumbent administration had initially planned to merge Fenaka into the State Trading Organization (STO), but later cancelled the plans.