Fenaka debt increased 379 percent due to corruption: Audit

The Auditor General's (AG) Office has said that Fenaka Corporation's debt rose by 379 percent by the end of 2023.

The office also said that the debt didn't increase because of their revenue nor by the funds given by the state as tariff loss in order to offset the debt.

The Audit Report that was released at midnight last night by Auditor General Hussain Niyazy states that Fenaka's financial situation is as bad as it is due to the transactions for services and goods they made that facilitated corruption. The report also states that Fenaka had incurred huge expenses due to unimportant expenditures that had not met its financial situation at the time.

"Fenaka Corporation's financial situation had been declining year after year since 2019. Fenaka had not paid what they had owed to other companies, with their debt increasing not because of their revenue nor by the funds given by the state as tariff loss in order to offset the debt. The company's management and those responsible for overseeing finances were irresponsible and had no planning, with them incurring huge expenses due to unimportant expenditures that had not met its financial situation at the time. We came to notice that this is the direct result of the facilitation of corrupt transactions in acquiring services and goods," as was stated in the audit report.

And so, the Auditor General said that the financial situation that Fenaka is currently in is not something that befell them, but something they caused themselves.

The Audit Report also highlights that when Fenaka had finished the construction of the power stations and office buildings in 2023, the projects had incurred a cost of MVR 767.3 million beyond the market rate. This figure came about when the amount spent and amount owed for unfinished work was combined. 

The report reads that in the agreement to buy generators, cables and transformers, Fenaka had spent an extra MVR 287 million than was actually needed.

The Audit Report noted that the generators that were brought were old generators that had been repaired, even with the amount spent.

The report shows that millions have been lost due to corruption in almost all areas that Fenaka had spent on.