STO acquisition of Fenaka stopped on Ministry’s orders

The acquisition of Fenaka Corporate by the State Trading Organization (STO) has been halted on the orders of the Ministry of Finance.

President Dr. Mohamed Muizzu earlier on August 25^th announced making Fenaka Corporation a subsidiary of STO, by having the latter acquire the shares of the former.

STO in a statement issued on Wednesday said it has decided to discontinue the acquisition of Fenaka Corporation in compliance with a directive issued by the Finance Ministry, and after reviewing the progress made on the conditions outlined in the previously submitted acquisition proposal.

STO added that in light of this progress of the acquisition proposal, the STO Board of Directors has resolved to cease all activities related to the share acquisition of Fenaka.

A paper submitted by the Finance Ministry to the cabinet highlighted the acquisition also granted power to STO to set the workforce total of Fenaka, which President Muizzu decided according to President’s Office, aiming to improve the utility sector, improve efficiency of services provided to the consumers, and strengthen the operations of Fenaka.

Out of the state-owned utility service providers, Fenaka Corporation has long been mired in allegations of corruption. The company has faced serious allegations of corrupt conduct in awarding contracts and in its hiring, with several cases filed against Fenaka with the Anti-Corruption Commission (ACC).

Fenaka also faces allegations of hiring people ahead of political elections and have them later terminated after the voting.

Earlier, the utility provider’s incumbent Managing Director, Muaz Mohamed Rasheed, the company’s total loss during the final quarter of last year when he took charge of Fenaka, stood at MVR 24.7 million, which he said was turned to a profit of MVR 7.4 million in 2024 second quarter.

The managing director earlier revealed his objective of Fenaka turning an annual profit of MVR 25 million by the end of 2024.