FENAKA to be transferred under STO

President Dr. Mohamed Muizzu has decided that State Trading Organisation (STO) is to purchase all shares of state owned utility company FENAKA Corporation, transferring the company as a subsidiary of STO.

The President's Office said the decision was made after discussing the Finance Ministry's proposal at the Cabinet meeting held yesterday, and that the transfer is scheduled to be completed by year's end.

"The decision was taken in consultation with the Cabinet to strengthen the utility sector and to strengthen and financially empower FENAKA's operations while providing efficient services to the people," the President's Office said.

It has also been decided to grant STO the full authority to bring the necessary amendments to its governing regulations, and to restructure FENAKA's governance to fall in line with STO's best practices. Additionally STO will be given the authority to streamline business activities and implement good practices, the President's Office said.

The Office said that STO will also assume the authority to determine the number of staff to be employed at STO, within the boundaries of the government's main policies. This means transferring employees where ever possible without lay offs, it was detailed.

In order to implement this transition, the government says it will be putting together representatives from the Ministry of Finance, Privatisation and Corporatisation Board as well as STO to form a committee.

This comes as the government plans to merge some companies and liquidate others in order to reduce government expenditure and strengthen the management of companies.