MTDC Directors sack Chairman ahead of the annual meeting

Six directors of Maldives Tourism Development Corporation (MTDC) have signed a resolution Monday to sack its Chairman Ibrahim ‘Kuda Bandhey’ Saleem.

But a press release issued Tuesday by the company denied the reports that claimed that its Chairman was sacked Monday.

Haveeru, however, received the resolution endorsed by Secretary Fathimath Thahaanee Shihab. Directors representing the shareholders, including Ahmed Shareef, Hassan Zareer, Mohamed Saeed, Thoriq Ibrahim and Ahmed Shamheed and the government-appointed Director Nuha Nizam signed the resolution.

According to the resolution, the directors had to dismiss Saleem, because he failed to hold a meeting of the Directors Board despite repeated requests by the members and because Board meetings had to be called off due to his absence. The Chairman had been an obstacle to decide on several important matters ahead of the company’s annual general meeting set for 8.30pm Tuesday, the resolution added.

The Directors Board is authorised to appoint and dismiss the chairman under the company’s charter. The charter stipulates that the board’s quorum will be two Directors representing the government and three Directors appointed by the shareholders. The chairman should preside the annual general meeting.

A director who signed the resolution told Haveeru that the resolution did not require the quorum stated in the charter as it was a circular resolution. The director who wished to remain anonymous added that there was not a reason why Saleem could not be sacked, as six directors endorsed the resolution.

“We did this after seeking legal advice. Even earlier, we pass circular resolutions without considering the quorum,” he said.

A company official, however, stressed that the resolution was not valid, as circular resolutions required the quorum’s consent as well.

No changes have been made to any post of the company’s Directors Board since July 16, 2009, the press release added.

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MTDC commence sales of shares

Maldives Tourism Development Corporation (MTDC) has on Wednesday opened sale of the remaining 40 percent of the 688,123 shares offered for sale in July this year.

MTDC official said sale of the remaining 277, 557 shares commenced on Wednesday as announced earlier through Bank of Maldives (BML) branches and will sales continue till 4 November. MTDC is selling a share at Rf. 165 each.

MTDC informed that shareholders, who do not have the maximum amount of shares permitted, would be able to buy shares. However, he said the sale is targeted more at islanders, who do not have any shares.

He also said marketing activities aimed at providing information to islanders living in the atolls will commence next week.

MTDC commenced sale of some 688,123 shares to the public early July this year. The shares with a face value of Rf.100 were sold with a premium of Rf.65 at Rf.165 per share.

MTDC Managing Director Mohamed Mihad , speaking at a news conference held earlier ,said the sale of the shares , that time , exceeded expectations and that out of 688,123 shares some 410,713 were sold. He has said due to public demand and with the approval of the corporation’s board, the sale of the remaining 277,410 shares were to be opened after Ramadan.

He then said during the second round of sales of MTDC shares, 60 percent of the shares were sold generating Rf.67.7 million to the corporation. He revealed that over 400,000 shares were purchased by 3,856 parties.

The revenue earned from sales of the 688,132 shares is to be spent on the development of City Hotel in Uligamu of Ha Atoll. The hotel is designed to be a 3 star 100 beds tourist resort. MTDC reports work on the hotel will be completed and the hotel will be opened by end of the year.

MTDC has leased 9 islands for development of tourist resorts from the government. Out of which on Herethere Resort has been completed and opened for business. The rest of the islands are Uligamu, Vodamulla , Ebudhoofutta , Olhuvelifushi , Naagoshi , Kihavah huravelhi , Mamuddhua and Kodeymathilabadhoo.

“Target is to re-open Herethere by November” MTDC

Maldives Tourism Development Cooperation had said that the Company is working on re-possessing Herethere and that it is working on re-leasing the resort to another party after the bidding process and that it hopes to put the resort back in the market by November 2009.

As the Civil Court had issued its verdict on 23 July, calling the Yacht Tours to return the resort within a month to MTDC, due to failure to pay the rent, MTDC’s Chairman, Bandhu Ibrahim Saleem said that he hopes that would be done within 15 days.

In a press conference held in the MTDC’s head office, he said that the cost of damages to the property is being calculated, section by section. He also said that the final position on that would depend on the analysis of the damages incurred and on the negotiations with Yacht Tours.

It was also revealed that the MTDC would hire temporary workers to repair the resort and that it would try to hire locals as much as possible.

Chairman also said that one of the objectives of the Company is to provide job opportunities for locals and that it would continue to work to achieve that.

He also said that the main focus at the moment is on completing 9 resorts and bringing them to the market, out of 15 handed to MTDC.

Out of the 9 resorts only two, Herethere and Uligamu City Hotel, would be directly developed by the MTDC. The main constraint on completing the 50 bed City Hotel in Uligamu is the lack of available sand.

It was also stated during the press conference that the Company is confident that the Uligamu City Hotel would be open for the market during the 2009/10 tourism season.

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MTDC earned MRF 63 per share in 2008

Maldives Tourism Development Cooperation had said that the company had recorded a profit of Mrf 63 per share in 2008, however was unable to pay that amount as dividends because in 2007 dividends are far higher than 2007’s actual profits.

Speaking to press, CEO Mihad said that since Capital Market Development Authority would not allow paying as dividends more than the company’s actual profits, and hence Company has to scale-back the amount to be paid as dividends.

Mihad also said that the deadline to sell new shares of the company is 18 August. He said more than 2000 people had expressed interest to purchase shares of varying amounts. He also assessed that despite the financial crisis, current efforts to sell more shares had been very successful.

Mihad said that the ceiling of the amount of shares to be sold to public this year would only be decided depending on the amount of people requesting to buy shares and their amounts.

During 2008 MTDC had paid a dividend of MRF 90 per share value of MRF 100, registering a 90% return rate. During the current year, MTDC had paid a dividend of MRF 20 per share value of MRF 100, registering a 110% return rate in 2 years.

Speaking at the press conference Chairman Bandhu Ibrahim Saleem said that he anticipates a larger profit margin next year. He also said that one reason for the low returns this year is irregularities in the lease payments owing to the MTDC from its only resort, Herethere. He also said that once those lease payments are received by the MTDC, profit margins would significantly rise.

The government created MTDC and leased 15 islands at a low cost, in order to spread out the income being generated from the tourism sector to the general public.

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Maldives Tourism Development Corporation (MTDC) commence sale of shares

Maldives Tourism Development Corporation (MTDC) has commenced sale of some 688,123 shares to the public. The shares with a face value of Rf.100 are sold with a premium of Rf.65 at Rf.165 per share. A maximum of 3,333 shares are to be sold to each individual.

Briefing the media at Fansavees Maalum , the corporation’s Managing Director Mohamed Mihad said only 688,123 shares will be sold this time and that these shares are what have been left of the 833,000 shares that were allocated for sale in 2006.

“We are opening this opportunity to sell off the remaining shares of the second round of sale, each share cost Rf.165, sales of our shares will be managed by Bank of Maldives, purchasing forms can be obtained from branch offices of Bank of Maldives in Male’ and atolls, in islands without a branch office of Bank of Maldives, forms can be obtained from atoll dhoni when it arrives in the island, island offices will provide necessary assistance and support” Mihad said.

He said during sale of shares, priority will be given to members of public who do not already poses any share or to members of the public having shares less than a 100.
MTDC shares can be purchased till 1300 hours Tuesday 18 August and the money generated from sale of 688,123 shares are to be invested on the development of City Hotel in Ha Uligamu. The City Hotel is a hundred beds -resort and is expected to be completed and opened by end of this year, MTDC has said.

MTDC leased 9 islands from the government for development of tourist resorts. One of the resorts, Herethere Resort in Addu Atoll, is already opened. Other islands under development are Uligamu , Vodamulla , Ebudhoofushi Oluveli , Hdh Naagoshi , Baa Atoll Kihavahhuravelhi , Gdh Mamuddua and Ga Kodeymathilaabandhoo.

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MTDC completes waterway between Herethere & Hulhudhoo

Maldives Tourism Development Corporation (MTDC) has revealed that a waterway between Herethere Island Resort and Hulhudhoo has been completed on 20 June.
MTDC in a statement issued on Thursday revealed that all associated works such as installing geo textile materials and placing rock boulders and sand bags on the embankment of the waterway has also been completed.

MTDC press release comes at a time when MTDC and Yacht Tours, current lessee of Herathere Resort, are engaged in legal battle in court. Yacht Tours leased out the 546 bed Herethere Resort from MTDC on 1June 2008.

Yacht Tours stopped paying rent in December 2008, claiming MTDC had failed to fulfill contractual obligation to build a waterway between Herethere Resort and Hulhudhoo, an adjoining inhabited island, by 30 November 2008.

MTDC responded by terminating the company’s contract and giving Yacht Tours seven days to hand over the resort.

In response, Yacht Tours lodged a civil case to sue MTDC for US$67 million, which was later reduced to US $ 45million in compensation for the incomplete channel and projected losses.

However, Civil Court ruled against Yacht Tours saying that the court could not establish if the company actually lost the amount.

However, Yacht Tours has again submitted case against MTDC for US$55 million in damages due to the dispute over Herethera Resort. The company claimed the dispute led to a low occupancy level and that tour operators have informed that they would no longer send tourists to the resort.

Yacht Tours sues MTDC for US$55 million

Tourism company Yacht Tours is suing the Maldives Tourism Development Corporation (MTDC) for US$55 million in damages due to the dispute over Herethera (Handhufushi) Resort. Speaking to Minivan News today, Dhiyana Saeed, lawyer for Yacht Tours, said US$10 million was for the losses incurred since the start of the legal dispute. The company claimed the dispute led to a low occupancy level and earlier this month, tour operators announced they would no longer send tourists to the resort. The remainder, said Dhiyana, was for the projected losses, as Yacht Tours entered into a 20-year rental agreement with MTDC last year. “A court ruled that MTDC was in breach of the agreement, therefore that entitles us to damages,” said Dhiyana.

The two companies have been in and out of the courts since January after Yacht Tours refused to pay MTDC rent, claiming the public-owned corporation failed to fulfill its contractual obligation to build a channel between Herethera and neighbouring inhabited island, Hulhudhoo. At the time, MTDC asked Yacht Tours to pay the outstanding rent and hand back the resort.

Yacht Tours responded by filing a claim for US$67 million in damages, which was later reduced to US$45 million. While the court ruled against them, saying they were unable to calculate the proposed projected loss, Dhiyana said Yacht Tours now had two reports to back up their claim: an audit from financial advisory company Ernst & Young and a second from a management consultancy firm, which conducted a financial forecast. “We have asked for a declaration that we don’t have to pay rent or liquidation,” said former attorney general Dhiyana. MTDC Managing Director Mohamed Mihad said the US$55 million “simply” did not make sense to him. “They started with US$67 million, it came down to US$45 million and now another figure has come.” MTDC has three cases lodged against Yacht Tours.

The first is to recover unpaid rent, the second to evict the company from the resort and the third is to recoup money paid by MTDC for insurance and stock. Mihad said MTDC handed over the resort to Yacht Tours last summer with around US$800,000 worth of stock, which was never repaid. Further, insurance for the resort had been paid for by MTDC ever since the takeover. The last court verdict issued in April ordered Yacht Tours to pay the outstanding rent of US$8 million and gave MTDC permission to retrieve the US$10 million bank guarantee. But a second ruling ordered Habib bank, the holder of the guarantee, to withhold the money until further notice.

The MTDC was established as a public enterprise with 55 per cent of its shares sold to the public to encourage the redistribution of tourist profits. The resort, which opened in 2007, was intended to boost the local economy in Addu atoll, considered by many to have been economically neglected by the government. But, hundreds of the local employees have been dismissed due to the resort’s low occupancy levels. The ongoing dispute led to government ministers holding a press conference this month, announcing plans to step in as mediators. Speaking to Minivan News earlier this month, Yacht Tours Chairman Abdulla Jabir said he was willing to settle out of court. Asked whether this was an option, Mihad said he heard Jabir had publicly announced he would be willing to hand over the resort if the bank guarantee was returned. “The board is considering it and we will give a counter offer. It’s not an easy decision to make,” said Mihad.

Related posts:

MTDC urges the Court to acquire the rent despite the court proceedings
MTDC files lawsuit demanding return of Herathera Resort
Yacht Tours to layoff Herathera Resort staff
Yacht Tours dismisses reports that new MTDC director is their employee
Six Days To Surrender Handhufushi: MTDC
MTDC terminates Herethere contract with Yacht Tours
Hulhudhoo Islanders Protest Against Yacht Tours
Handhufushi staff begin strike to protest against delay in getting paid

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MTDC files lawsuit demanding return of Herathera Resort

Maldives Tourism Development Corporation (MTDC) has filed lawsuit seeking return of Herathera Resort from Yacht Tours, MTDC Chairman Bandhu Ibrahim Saleem has revealed. The government owned MTDC, which developed the resort and later leased it to Yacht Tours, filed lawsuit after Yacht Tours failed to pay rental charges for over two quarters.

Briefing the media, at news room Fansavees Maalam on Thursday, Bandhu Saleem revealed that Herathera Resort was the only resort which provides an income to the corporation. He said other resorts owned by the corporation are still being developed and as such does not make any money.

Bandhu Saleem revealed that, on behalf of the shareholders, every effort would be made to get the resort back. Some US $ 55 million went in to the development of the resort and all avenues would be explored to get Herathera Resort back to prevent further losses to the corporation.

He noted that during a recent visit to Herathera Resort by an MTDC top level delegation expensive assets like generators and laundry equipments were found damaged and out of service. He also noted that some equipment included in the inventory listing of Herathera Resort are now found in some campaign offices in Hulhudhoo and Meedhoo.

Chairman Bandhu Saleem said the corporation was working on cashing a US 10 million bank guarantee by Yacht Tours. He also informed that if Herathera Resort is not returned by end of May, the outstanding rental charges would exceed the bank guarantee. He further said Yacht Tours still have the opportunity to continue operating the resort provided it pay up the overdue rent and settle other matters.

Meanwhile , at a press conference held on Wednesday, CEO of Yacht Tours Ahmed Mohamed announced that company would laying off some of the 600 employees working at Herathera Resort due to financial difficulties caused by global economic down turn. He said the resort was losing some Rf.100, 000 per day.

Yacht Tours stopped paying rent in December last year, claiming that MTDC had failed to honor its contractual obligation to build a channel between Herethere Resort and Hulhudhoo. Recently a court has ordered Yacht Tours to pay over US $ 8 million in rental charges to MTDC.

MTDC urges the Court to acquire the rent despite the court proceedings

MTDC had appealed the Civil Court to issue a court order to attain the amount of the rent for the MTDC’s Herethere Island Resort, rented to Yacht Tours, despite the case lodged by the MTDC against the Yacht Tours. During the Court proceedings Shaaheen Hameed, MTDC’s lawyer said Yacht Tours had failed to pay the rent since December 2008.

He said that the figure for unpaid rent amounts to US $ 7,818,000, and this is causing a great deal of trouble to the financial situation of the MTDC. He also highlighted that the MTDC is a public company. In response the Chairman of the Yacht Tours, Abdulla Jabir said that if the Court issues an order to collect the entire amount of the rent that would be an impossible burden for his company. He therefore, urged not the Court not to issue such an order, instead to settle the issue when the legal proceedings are over.

Yesterday’s proceedings were concluded after announcing that another proceeding would be held very soon. When asked by Miadhu Daily regarding the matter, Jabir said that the argument from his side is said in the proceedings and did not want comment further on the issue. He also said that he is confident that the final ruling will be issued after consideration to what has been said by both sides in the proceedings.

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