Attorney General Ahmed Usham has accused the former administration, led by the now-opposition Maldivian Democratic Party (MDP), of authorising more than USD 51.88 million in compensation and settlements to private parties through mechanisms he described as unconstitutional and lacking legal authority.
Testifying before Parliament, Attorney General Usham outlined what he called unlawful practices in the handling of state compensation and detailed a high-profile contractual dispute with Malaysia-based technology firm Bestinet Sdn. Bhd. that has left the government facing significant financial exposure.
According to Attorney General Usham, the previous government disbursed over USD 51.88 million in compensation, much of it processed through a Settlement Committee established by the President’s Office. The committee, he said, not only authorised cash payments but also transferred islands and lagoons as part of settlements, with these assets included in the total valuation.
He stressed that the rules governing dispute resolution between the state and private parties, introduced on 28 November 2022, operated without statutory authority. His office, he added, had no role in the committee’s decisions, which he described as unconstitutional.
The attorney general said compensation was also provided outside the committee’s remit. "Compensation has also been provided to various parties outside the purview of the settlement committee. This includes compensation awarded during the mediation phase, settlements made outside of court, and payments arranged prior to the formation of the settlement committee, including transactions handled by other similar committees established previously," the attorney general elaborated. "We have not yet completed a formal valuation of these specific cases; however, I believe the total will exceed USD 51.88 million."
On his advice, President Dr Mohamed Muizzu dissolved the settlement committee on 21 November 2023. Attorney General Usham confirmed that the lagoons and islands released under the committee’s agreements have since been recovered by the state.
The attorney general also addressed the dispute with Bestinet, a company contracted to manage migrant labour recruitment. He said the issue stemmed from the government’s failure to implement or uphold the agreement, signed in 2016 with Maldives Immigration.
The contract stalled in 2019 when responsibility for migrant labour processes shifted to the Ministry of Economic Development. At the same time, a one-year ban was imposed on the entry of Bangladeshi workers, further halting implementation. Attorney General Usham said the government failed to communicate these developments to Bestinet.
The company responded by issuing five legal notices, none of which received an official reply. Bestinet argued that it was not informed when the system ceased operation and claimed to have incurred substantial costs in investments and system development. It also cited financial losses from the government’s failure to pay annual fees, leading to its demand for compensation.
"The company noted that it was not officially informed when the system usage ceased, and that significant expenses had been incurred, along with investments made, for the development of various system components up to that point," said Attorney General Usham. "Furthermore, the company claimed to have suffered losses due to the non-payment of the required annual fees. Therefore, the company had formally requested that the government provide compensation for the damages incurred."
Bestinet formally sought USD 13.7 million in compensation, in addition to other damages. In 2023, the attorney general of the previous administration advised the settlement committee then in place to proceed with the case.
Upon review, Attorney General Usham found that the former government had allowed nearly five years to pass without making a decision on the agreement or notifying Bestinet of its intentions. He concluded that this inaction constituted a material breach of contract obligations.
He advised that if the matter proceeded to court, Bestinet would likely succeed in claiming the full amount sought. He also warned that arbitration would impose heavy costs on the state. As a result, he recommended entering into a new agreement with Bestinet, expressing confidence that such a settlement would not result in a loss for the government.