Supreme Court Orders Removal of Director From Company Board in Landmark Ruling
The Supreme Court has ordered the removal of Hussain Shiham Ali, a board director of Save the Dreams Maldives, marking the first time the court has exercised such authority in the Maldives.
The ruling, issued on Thursday, found Shiham in breach of his directorial duties, a complaint originally filed by Save the Dreams France, a joint stakeholder in the venture.
Save the Dreams Maldives, co-owned by Mahal Tours and Save the Dream France, holds the sublease rights of Rihiveli Beach Resort. The complaint emerged following Shiham’s unilateral decision to pay US$550,000 to Mahal Tours from Save the Dreams’ funds, allegedly breaching his fiduciary duties and violating the integrity expected of a board director.
The case, which escalated from the Civil Court to the High Court, was finally adjudicated by the Supreme Court after previous rulings favoured Shiham. The Supreme Court overruled these decisions, disqualifying Shiham from his directorial role. However, it denied the company’s claim to recover the US$550,000.
Justice Husnu Al Suood, presiding over the case, emphasised the importance of the Maldivian Companies Act in preventing corruption and abuse of office, noting Shiham’s failure to disclose his actions to the board constituted a clear breach of responsibility.
The court also upheld the non-dismissal of the secretary of Save the Dreams Maldives, as the appeal did not seek to overturn this aspect of the lower court’s ruling.
This landmark ruling reinforces the court’s power to intervene in corporate governance matters, especially when internal mechanisms fail to address breaches of duty by directors. The Ministry of Tourism in 2021 revoked the license granted to Save the Dreams to operate Rihiveli Beach Resort, adding further complexity to the case.
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