Fenaka spent MVR 17mn on refurbished generators worth just MVR 2mn

A special audit on Fenaka Corporation has uncovered that between 2021 and 2023, the state utility company purchased refurbished generator sets passed off as brand-new ones at a staggering 504 percent higher than their actual value.

The audit report, publicized by the Auditor General’s Office (AGO) on Thursday, flags multiple financial irregularities by Fenaka. This includes 438 procurement contracts - collectively worth MVR 1.4 billion – that were awarded without a competitive bidding process.

Another serious irregularity flagged in the audit involve 10 gensets that Fenaka purchased between 2021 and 2022 – gensets that were supposed to be brand-new, but were refurbished.

These were supplied by two private companies – Exco and Amber Holdings – who were awarded contracts to supply Fenaka with brand-new gensets.

But the audit uncovered that Customs documents show the 10 gensets were refurbished ones, while the reports compiled by Fenaka upon delivery reads that they accepted brand-new ones.

The gensets in question include nine 400KW gensets and a 600KW one. Their collective value, inclusive of import duty, is MVR 2.9 million.

However, Fenaka purchased these gensets for MVR 17.4 million, which is 504 percent higher than the actual value.

The audit flagged this as an act of fraud and deceit on the part of the suppliers, and an act of providing specific parties with an undue benefit on the part of Fenaka.

The audit also uncovered that the two suppliers were awarded these procurement contracts without a competitive bidding process. The terms of the contracts stipulated that they were to supply the gensets between one to seven days. However, Customs documents show the gensets were already in Maldives when the contracts were awarded.

The Auditor General’s Office recommended an investigation into these irregularities.