The Ministry of Finance has revealed that the government disbursed MVR 81.8 million in settlement payments during the first quarter of 2024. The amount represents a staggering 80 percent of the total funds allocated for settlement payments in the state budget for the year.

This is not the first time the government has exceeded its budget for settlements. In 2023, it disbursed MVR 557 million, five times the budgeted amount of MVR 101 million.

The Finance Ministry, citing confidentiality clauses, declined a media request in January to disclose the details of the recipients of these settlements and the respective compensation amounts.

Finance Minister Mohamed Shafeeq justified the disbursement of the settlement payments, attributing them to agreements made by the previous administration. “This administration has not decided to provide settlements for anyone,” he told the public service broadcaster.

Shafeeq also noted that the current administration under Mohamed Muizzu had dissolved the Settlement Committee, which was established during the tenure of former President Ibrahim Mohamed Solih, on 21 November 2023. He confirmed that the Muizzu administration has yet to make any new settlement agreements.

The government continues to pay out settlements to companies to avoid incurring fines as per the settlement agreements, he said. These payments are being made following legal counsel from the Attorney General.

Attorney General Ahmed Usham, whose cabinet confirmation was rejected by parliament, stated that his office had initiated a comprehensive review of settlements reached by the now-dissolved Settlement Committee.

Over the past 13 years, the government has disbursed MVR 2.7 billion in settlements. These payments were made to compensate for the unlawful termination of various government contracts with private companies and other entities.