Fenaka loses MVR 7.2mn lawsuit to Kaizaan, company linked to alleged corruption case against former MD Saeed

The Civil Court has ordered Fenaka Corporation to pay MVR 7.2 million to Kaizaan Investment, the company linked to the alleged corruption case against the state utility company’s former managing director, Ahmed Saeed.

Kaizaan, a sole proprietorship registered to Ismail Zahid, is the company that built an ice plant in L. Maamendhoo, which it sold to Fenaka in 2023 for MVR 11.3 million. Saeed, who signed the agreement on behalf of Fenaka, is currently on trial on charges of corruption in the case.

Zahid filed a lawsuit against Fenaka seeking MVR 7.9 million; MVR 7.2 million in outstanding payment for the ice plant, as well as MVR 580,155.68 in damages and MVR 100,000 in legal fees.

The Civil Court ruled in favor of Kaizaan on Wednesday.

At the court, Fenaka agreed to settle the MVR 7.2 million in outstanding payment for the ice plant, but refused to pay damages and legal fees, citing there wasn’t any mention of it in the agreement.

The court sided with Fenaka with regard to damages, citing there wasn’t legal grounds for the state utility company to compensate Kaizaan. It also sided with Fenaka with regard to the claim for legal fee coverage, citing lack of documents detailing the legal cost incurred by Kaizaan.

While Fenaka asked to allow it to settle the MVR 7.2 million in outstanding payment in installments over the course of a year, Kaizaan had rejected the proposal.

The Civil Court therefore ordered Fenaka to settle the MVR 7.2 million payment to Kaizaan within 30 days.

Fenaka and Fisheries Ministry had signed an agreement to develop an ice plant in Maamendhoo on April 20, 2023. According to the Prosecutor General’s Office (PGO), instead of developing an ice plant, Fenaka had purchased an existing one for a highly inflated price of MVR 11.3 million as proposed by Kaizaan.

PGO said the decision was taken without consulting with the Tender Evaluation Committee and despite Fenaka's business plan stating that the ice plant was not a financially viable project.

The decision to purchase Kaizaan’s ice plant was made during a board meeting on September 7, 2023. According to the PGO, Saeed, despite being in attendance, failed to disclose that Fenaka had initially planned to develop the Maamendhoo ice plant internally.

The purchase agreement between Fenaka and Kaizaan was signed the same day.

Saeed is charged with abuse of power in the case.

The case is one of multiple corruption cases under investigation by the Anti-Corruption Commission (ACC) against Saeed, who ran Fenaka during former president Ibrahim Mohamed Solih’s administration.