The Finance Ministry has addressed recent allegations of the government paying out MVR 100 million in compensation, stating that the figure was related to international arbitration transactions.

A recent “Weekly Fiscal Report” released by the Finance Ministry revealed that MVR 101.7 million had been disbursed during the last week of November as compensation for damages. However, the Finance Ministry clarified that this figure was reported after international arbitration transactions were posted to the public accounting system.

The Ministry further explained that decisions regarding compensation payments to parties in connection with international arbitration rulings had been made prior to the new government taking office. Some funds were disbursed, while others were intended to be paid in instalments.

Following the change in government, President Dr Mohamed Muizzu dissolved a settlement committee established by the previous administration. Cases handled by the committee are currently under review as advised by the Attorney General.

The Settlement Committee, established by the previous government to address disputes arising from agreements between the government and private parties, has been a subject of controversy. It was dissolved on the advice of the current Attorney General. The Committee had decided to withdraw over MVR 1 billion from state funds, which has raised legal concerns.

The Finance Ministry said that the decisions made by the Settlement Committee were currently under review with the guidance of the Attorney General, although specific details were yet to be disclosed. The Committee had also allocated MVR 225 million in compensation and MVR 1 billion worth of state assets, including islands and lagoons, to various parties.

The President’s Office expressed concerns about the lack of a legal framework and authority governing the resolution of disputes between the government and private parties. It was noted that compensation decisions were made without involving the State Attorney General’s Office or adhering to legal advice, potentially violating Article 133 (c) of the Constitution.

The President’s Office further stated that some cases were settled out of court during the judicial process without consulting the Attorney General’s Office, disregarding points raised during trial and the Auditor General’s opinions on compensation.

The Settlement Committee was initially formed in January 2019 to address disputes stemming from the government’s actions during the previous administration. It aimed to compensate parties affected by the termination of agreements during that time.