SunFront was awarded more than actual loss: Audit Report

The Auditor General's Office (AGO) stated today that while the Civil Court ruled that the state must pay SunFront over MVR 20 million in compensation for damages, calculations show that the company should only be awarded MVR 10.7 million.

In June last year, the Civil Court ordered the state to pay over MVR 20.8 million to SunFront as compensation. This ruling stemmed from a case where the government failed to hand over land to the company, which had paid for the land in the Southwest Harbour area of Malé in 2010, and failed to return the money. In 2014, the Civil Court had previously ordered the state to return the MVR 26.9 million paid for the land and ruled that SunFront retained the right to file a separate claim for damages.

The report released today by the Auditor General's Office, regarding the Civil Court's ruling to pay MVR 20.8 million in damages, noted that the calculations used by SunFront to claim damages due to the delayed return of their payment were based on estimates.

The AGO report, signed by Auditor General Hussain Niyazy, states that the most accurate standard for calculating the company's loss is to use the "actual" figures from the company's financial statements to calculate the net profit margin and determine the commercial profit.

Using this methodology, the report concludes that the state should only pay MVR 10.7 million in compensation to the company.

The audit report also mentioned that although SunFront had initially sought MVR 20 million in compensation, the company later agreed in court to reduce the compensation amount to MVR 10.7 million, following the state's argument that the higher figure was incorrect.

The Auditor General Niyazy recommended in the report that the matter be appealed to the High Court to reduce the amount of compensation the state must pay SunFront.

It is now known that the state has already filed an appeal in the High Court regarding the case. The compensation payment awarded by the court has not yet been released.