Lack of Corporate Governance in MNSL

Maldives National Shipping Limited is a State Own Enterprise (SOE) in Maldives ( Ref: http://www.finance.gov.mv/?page=pemeb_faq) . This company was incepted by the former precedent Mr. Nasir. It was supposed to be the largest Shipping line in the region when the president left the country. Those days Mr. Nasir has conducted lot of business in his own name and MNSL was one of those. Therefore it was no surprise that he took his share of wealth and funds from the company when he settled down in Singapore.

However the government under Maumoon, have continued the business and its still running. Thanks for the hardworking staff who contributed their effort and skills to keep it going. There was no evidence that the Government of Maldives really supported this venture and tried to run it as a profitable company. From the very little the public have known, MNSL has not grown at the speed it should have grown.

Like most of the SOEs in Maldives MNSL was not audited. However the recent scandal of cases of fraud in the company was highlighted in the audit carried out by the Audit Office in 2002. Public has know very little about the operations and management of this company and specially its Singapore Division. This is one reason the Parliament has got involved and done an investigation.

As per the parliamentary group’s report it was seen Mr. Abdul Nasir Ismail was accused of fraud and mishandling of company funds. He was the former Deputy General Manager. However his case was closed as there were no evidences of fraud as per the Anti Corruption Board. Mr. Nasir as per Haveeru Daily has publicly challanged the debate held in parliament in relation to this. ( Ref: http://www.haveeru.com.mv/beta/?page=details&id=56992 ).

It is still not sure the fairness of the Audit report as the audit office lacks expertise and does not have trained staff to carry out an audit of this capacity.

If Mr. Nasir has lent money to MNSL on a personal capacity while he was the head of operations, it is clear evidence that there is no good corporate governance at all in MNSL. By the way how much did he charged for interest on such loans?

The bigger question comes to my mind is what forced Mr. Nasir to pump his own money to MNSL , was it running into such liquidity problems that he found it could go bankrupt and he felt to do a patriotic thing for our nation. If that is the case, THANK YOU A LOT MR. NASIR. How can it happen? Why the owner of the company did not bother?

Please visit MNSL website http://www.mnsl.com.mv/ for further information about the company. (oooooops this site is underconstruction still, after so many years in business,,shows how much re-structuring the company needs.)

I would really like to get some comments from real staff who is working in MNSL and who had worked in MNSL in the past. This will help us to know something about this case which seems to be a wild goose chase.

Corporate Governance in Maldives

The Capital Market Development Authority of Maldives have come up with a Corporate governance Code for Maldives.

I had the privilege of attending a workshop organised by the CMDA to make the enterprises aware of this code. The participants had the opportunity to give their feedback and contribute to the contents of this code. As mentioned by the CEO of CMDA, Fathimath Shafeeqa, and agreed by the participants this code is not complete yet and this will be a developing code and will be continuously reviews and as and when the corporate culture changes it could be strengthen by means on legislation.

Shafeeqa and her Teams effort has to be appreciated in a time when Maldives is hitting the headlines as many public enterprises has been accused of fraud and non- compliance to corporate governance.

Famous Cases include the the bankruptcy of Air Maldives and also scandals of insider trading in STO, MIFCO and MTCC. This is a hurdle to develop capital market in Maldives.

The first Public Limited Company listed in Maldives to do Tourism Business, Maldives Tourism development Company - MTDC, is been Accused of so many fraud and lack of good governance at all. This is a serious issue and Maldivian Public Companies and Public enterprises need to be more transparent and the Authorities need to take such scandals seriously if they want to develop capital market in Maldives.

Please find the CMDA Corporate Governance Code in the following link and send me your comments on this blog.

http://www.cmda.gov.mv/Images/Documents/Cgov/CGCode20070423ENG.pdf

Corporate Governance

This might be the hottest topic in the corporate arena, Board members of Public companies and public enterprises are thinking, whether they are using the right practices to conduct their business. Stock Exchanges, Governments and shareholders are demanding, transparency, fairness in business transactions.

This trend has been developing in the world for past ten years. However an effort is been made to speed up the reform process after the Enron collapsed.

But today we have to think beyond the corporate board, we have to think of ways how good practices and governance can be established in every layer of the management. We have to think about training, and building a culture where by Directors and Managers can be hold Accountable.

Accountants can play a huge role in making this happen. Specially after the corporate accounting scandals around the world, the importance of good accounting practices has been mounting. Today Accountants have to be loyal to the company and not just for the shareholders and directors. Today we have to realise that business is a separate entity from its members.

I think IFC and Global Corporate Governance Forum with Commonwealth are doing a great job in promoting this concept and helping countries to formulate codes.

to be continued.................

Beyond Traditional Accounting

There is only one thing certain about our future, that is nothing is certain. This is one reason we have to be ready for the challenges and changes happening everyday in every aspect of our lives. It will be the worse thing an accountant can do to his organisation if he get stuck in the mud. Sometimes the methods of accounting, forecasting and financing might be helping your business to continue what is doing. But the bigger question is it getting your business ahead of competition? or is it ahead of the change?

Accountants can contribute to a business in many ways than just 'burying the dead' (recording past transaction) or 'digging the grave' (reporting what has happened in the past). This is the reason I created this blog.

ShareAccounting, is the place on the WWW for accountants to come together and share their ideas and thoughts, also helping them to be futuristic and be ready for changes and challenges coming in their way.

Lets spread the word and contribute to this blog.