HC orders Directors of Sharu company to pay back MVR 17.8 million to Fenaka!

High Court of Maldives | Photo: Mihaaru

Malé, Maldives – The High Court of Maldives has ordered the Directors of the Sharu Launch Services to individually take responsibility for paying back FENAKA with the MVR 17.8 million taken by Sharu, in exchange for USD one million.

Sharu, which has been in civil disputes with several other state owned enterprises in the past as well, took MVR 17.8 million from FENAKA to provide the company with one million in USD. However, all cheques provided to FENAKA by Sharu had bounced at the time.

According to local reports, the initial agreement between both companies was to have the sum transferred to FENAKA within a period of thirty days. But with the bounced cheques, it was reported that Sharu proposed to pay the sum in installments before the year 2023 – a deal which was refused by FENAKA.

FENAKA, however counter proposed that Sharu complete the payment in three cheques – which was then denied by Sharu.

With both entities unable to come to an out of court agreement, the matter was filed with the Civil Court, which issued a verdict dictating that Sharu must pay the amount to FENAKA, however not placing individual responsibility for the payment on the Board of Directors themselves.

FENAKA then appealed the verdict with the High Court, requesting that individual responsibility be placed upon the Directors of the company. In the verdict declared by the court on Monday, it stated that although a company is an individual legal entity, it may not be used by Directors as a cover to escape legal repercussions, and highlighted that the law clearly dictates that Directors may be held accountable in such cases.

It was also added that while Sharu does not have a valid license to covert currency, the responsibility of FENAKA not receiving Dollars or the Maldivian Rufiyaa paid to Sharu must be borne by the Directors of the company.

In the High Court verdict, Sharu company, along with the then Board of Directors of the company, named Sobah Ahmed, Mohamed Mushthaaq and Sharumeela Zubair are required to pay the amount of MVR 17.8 million to FENAKA within three months.

Among the three judges who presided over the case, Judge Mohamed Niyaz noted that the management of FENAKA must also be held responsible for the mishap, considering that the money was issued to Sharu despite knowing that Sharu was not licensed to carryout money exchange transactions.

He also highlighted that all who are responsible must be held accountable that if not stopped, such actions would only continue. Judge Niyaz went on to say that the actual hardship of the entire ordeal would have to be borne by the tax paying citizens of the country.

Apart from Judge Niyaz, the case was presided over by Judge Abdul Raoof Ibrahim and Judge Shuaib Hussain Zakariyya, with Judge Raoof as chief Judge.