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The level of transparency in most SOEs is insufficient as of 2022: Transparency Maldives

“With weak governance and compliance, lack of oversight and accountability, SOEs poses high fiscal risks and are often used as conduits of corruption,” Senior Project Coordinator at TM, Azza Mohamed said.

Mariyath Mohamed
12 June 2024, MVT 08:34
Male City / Life style
Mariyath Mohamed
12 June 2024, MVT 08:34

Transparency Maldives (TM) has conducted an evaluation on the information disclosure via official websites by State Owned Enterprises (SOEs), titled the Corporate Governance Transparency Index (CGTI).

Although the CGTI commenced initially in 2022, the latest report covers all 32 SOEs listed under the Ministry of Finance. This CGTI 2023 assesses the SOEs for the financial year ended on 31st December 2022, with the assessment period falling from 14th August to 3rd September 2023.

“The Corporate Governance Transparency Index (CGTI) was developed to assess the disclosure of corporate governance mechanisms among SOEs. The CGTI aims to identify gaps in current disclosure and act as an advocacy tool in promoting good governance, integrity practices and transparency among SOEs. The CGTI rates all SOEs on 6 corporate governance pillars, 16 corporate governance categories and 38 corporate governance transparency variables. These were formulated using the Privatization and Corporatization Board’s Code of Corporate Governance for SOEs as a reference,” explained Senior Project Coordinator at TM, Azza Mohamed.

“Increasing corporate transparency and strengthening corporate governance mechanisms are robust measures that can be used to mitigate corruption vulnerabilities and related risks, improve efficiency and accountability.”

Observations during the study

CGTI 2023 - overall index ratings.-- Photo: Transparency Maldives

Transparency Maldives noted a lack of disclosure in dual language, with three SOEs having their websites in both Dhivehi and English, one SOE having their website solely in Dhivehi, and the remaining publishing their website in English alone.

Another point that the NGO felt lacking was the failure to publish the dates of disclosure in the instance information is available on the websites. They noted that doing so would increase confidence in the timeliness and relevance of said information.

They observed that the rate of disclosure is more evident in SOEs that have additional regulatory and disclosure requirements, such as Capital Market Development Authority (CMDA) or Maldives Monetary Authority (MMA) regulations.

“With weak governance and compliance, lack of oversight and accountability, SOEs poses high fiscal risks and are often used as conduits of corruption,” Azza said.

“This is also an important issue when looking at an electoral environment - as noted by Transparency Maldives 2023 and 2024 election observation efforts, abuse of State resources using SOEs is a serious issue and includes providing employment opportunities and awarding projects to SOEs to build infrastructure. This skews the electoral level playing field and there is possibility of establishing a clientelist system through SOEs due to the associated governance risks.”


TM urges SOEs to ensure timely disclosure of information such as annual reports, policies, tenders, and other such documentation. They advise that the information be shared in both Dhivehi and English to ensure further reach and accessibility.

Along with including the date of publication, TM calls on SOEs to provide historical information regarding disclosures for further reliability and to include summaries so as to make the information, such as financial information, more easy comprehensible to the regular reader who may not have specific expertise in the field.

The websites can also be improved through including a section dedicated to publishing information regarding Corporate Governance, including self-explanatory links to vital information, and improving the search functions.

They further call for standardization across SOEs and for PCB to publish information disclosure guidelines. They also called on PCB to strengthen the oversight of proactive disclosure obligations, and to establish stronger mechanisms against non-compliance.

Pillar 1: Transparency in the ownership policy and objectives of the SOE

The assessment results show that seven SOEs (22 percent) scored good, four SOEs (13 percent) disclosed some information but has room for improvement, and 20 SOEs (63 percent) provided insufficient information.

State Trading Organization (STO) scored highest in this pillar with 79 percent, with BML at 77 percent and Housing Development Finance Corporation (HDFC), Maldives Transport and Contracting Company (MTCC), and Maldives Islamic Bank (MIB) at 74 percent.

On the lower end of the scale were MCIF with a glaring zero percent, and Maldives Fund Management Corporation (MFMC), Fenaka and Stelco at 12 percent.

Pillar 2: Transparency of the organization, operations and results of the SOE

In this pillar, a staggering 78 percent of SOEs scored below 40, with 19 percent being marked as improvable.

Only STO, with 57 percent, scored over fifty. Maldives Center for Islamic Finance (MCIF) scored 0 percent, with MFMC, Regional Airports Company Limited (RACL) and Kahdhoo Airport Company Limited (KACL) next at the bottom with 5 percent.

Pillar 3: Transparency in engagements with the State

In this pillar, MTDC is marked as being 100 percent compliant.

On the other hand, MCIF, MFMC, RACL, KACL, WAMCO, Maldives Tourism Development Corporation (MTDC), Post, Fahi Dhiriulhun Corporation (FDC), Road Development Corporation (RDC), Tradenet Maldives Corporation Ltd (TMCL), Addu International Airport (AIA), Island Aviation Services Ltd (IASL), SME Development and Finance Corporation (SDFC), FENAKA, STELCO, Business Centre Corporation (BCC), Maldives Hajj Corporation Ltd (MHCL), Maldives Airports Company Ltd (MACL), Public Service Media (PSM), Maldives Sports Corporation (MSCL) and Aasandha are all at zero percent.

Pillar 4: Transparency in arrangements with the private sector

Of the 34 percent of SOEs that published their annual report, 9 percent were rated excellent and 6 percent were rated good in this pillar.

The highest compliance was observed from MTDC, with the lowest, at 0 percent, rated for 21 SOEs.

Pillar 5: Transparency in Corporate Responsibility, internal control and corporate integrity

This section indicates that 18 SOEs did not disclose any information included in this pillar, and only 2 SOEs, a mere 6 percent, scored a rating of good.

Pillar 6: Transparency of the Board of Directors

Again, in this pillar, 2 SOEs – Dhiraagu and MTDC- rated good, while four SOEs – MCIF, MFMC, AIA and PSM - were rated as not having disclosed any related information.

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