Kings Capital Holding to sue BML, MMA

Former MP Alhan Fahmy's Kings Capital Holding announced its decision to sue both the Bank of Maldives (BML) and the Maldives Monetary Authority (MMA) over defamatory statements.

A statement released from MMA on Thursday, last week, cautioned the Maldivian public against Ponzi schemes. The statement is believed to be a caution against the foreign exchange (forex) trading and investment firm run by the former MP.

In the central bank's statement, it had noted that investment firms that operate via Facebook or Telegram, promising unrealistic returns on investments within relatively shorter periods, are usually scam networks that disburse payouts to old investors from the money borrowed from newer investors.

Meanwhile, the Chairman of Kings Capital Holding, Mr. Alham Fahmy has lambasted both the central bank and the Bank of Maldives.

Mr. Fahmy alleged that the central bank's circular was a direct jab at his investment firm, which has brought unprecedented fiscal damage to the company.

He further stated that the company will be suing both MMA and BML to claim the damages.

Kings Capital Holding is suing BML for the latter's decision of deactivating the former's bank accounts.

Meanwhile, the firm's representative attorneys contested both MMA and BML's decisions, noting that the Maldivian law does not prohibit earnings made through forex trading.

"MMA, CMDA, and even the Bank of Maldives do not have valid grounds for their decisions," said Mr. Mohamed Haleem, former Civil Court Judge and one of the attorneys representing the investment firm.

"We do not believe that the Bank of Maldives has any legal grounds to deactivate our bank accounts. The Maldivian law does not prohibit us from trading, and the law does not dictate that we register our trading funds at any bank. However, the bank is challenging this saying that our current investment fund is one of the types that need to be registered at the bank," Mr. Fahmy said.

Furthermore, Mr. Fahmy claimed that the central bank in 2017 had set legal grounds for forex trading to be acceptable - though not specified directly.

The Maldives lacks any specific legislation that either legalizes or prohibits forex trading.