Fenaka owes suppliers over MVR 3.5bn; accumulated losses top MVR 2.2bn

Fenaka Corporation, which is in the process of being merged into the State Electric Company (STELCO), racked up MVR 3.5 billion in outstanding dues to suppliers, according to the 2024 audit on the company’s financial statements.

The report, publicized by the Auditor General’s Office on Tuesday, casts doubt over the credibility of the utility company’s financial statements, citing that the auditors failed to obtain key financial records.

The report shows Fenaka racked up MVR 3.51 billion in outstanding payments to suppliers by the end of 2024 – up 14 percent from the MVR 2.99 billion the previous year.

However, the report states that auditors were unable to actually verify the completeness, existence and accuracy of the MVR 3.51 billion trade payables balance, citing “unavailability of sufficient and appropriate audit evidence, including external confirmations from creditors.”

Fenaka had ended 2024 at a loss of MVR 547 million. The figure, while lower than the MVR 811 million loss recorded in 2023, pushed accumulated losses above MVR 2.18 billion.

The auditors, citing the inability to properly assess the company’s financial position due to lack of access to relevant audit evidence, concluded they were unable to determine whether the company will continue as a going concern.

“Should Company be unable to continue as a going concern, it is unlikely they will be able to realize their assets and extinguish their liabilities in the normal course of business and at amounts stated in the 2024 financial statements,” reads the report.

Fenaka is a 100-percent state-owned utility company established in 2012 by caretaker president Dr. Mohamed Waheed Hassan Manik.

The company is heavily in debt, and has been plagued with allegations of corruption throughout different Maldivian administrations.

A special audit report publicized by the Auditor General’s Office (AGO) last year flagged MVR 2.2 billion in financial irregularities by Fenaka between 2021 and 2023.

On September 7, President Dr. Mohamed Muizzu announced the decision to merge Fenaka into STELCO as part of his administration’s cost cutting measures.