Firm introduced by gov't to invest $100m in Ihavandhippolhu harbor development project, failed to initiate progress, later found linked to money laundering

The government has revealed that no progress has been made under the agreement signed with Singapore’s Capital Asia Investment (CAI) to develop the "Maldives Economic Gateway" project in Ihavandhippolhu, despite 656 days having passed since the signing. It has since come to light that the Singaporean firm is currently under investigation by official authorities in Singapore over allegations of money laundering.

The Maldives Industrial Development Free Zone (MIDFZ) and Singapore's CAI signed an agreement on November 9, 2024, to develop an international-standard port in Ihavandhippolhu.

The agreement for this project was signed by Shimad Ibrahim, Managing Director of MIDFZ, on behalf of the company. Chief Commercial Officer Tan Kun Chiao George signed the agreement on behalf of CAI.

In a statement released following the signing, the Economic Ministry noted that this agreement was executed under the "Maldives Economic Gateway" project. This initiative aims to diversify the nation's economy in alignment with the strategic vision of President Dr. Mohamed Muizzu.

The framework agreement to further develop the Maldives Economic Gateway (MEG) project was signed by Shimad Ibrahim, Managing Director of Maldives Industrial Development Free Zone (MIDFZ) Public Limited, and Tan Kun Chiao George, Chief Commercial Officer (CCO) of Capital Asia Investments (CAI) Private Limited. | MIDF

The Economic Ministry further stated that this agreement will facilitate the zoning of the massive project aimed at transforming Ihavandhippolhu into a major commercial and logistics hub, while also defining the specific sectors for its development.

Speaking at the signing ceremony, Shimad Ibrahim, who also serves as the Managing Director of STO, stated that a formal agreement under this framework is expected to be signed within six months. He further noted that CAI has allocated an initial investment of $100 million for the first six months of the project.

The project, which was originally planned by President Solih's administration to include bunkering, port facilities, cruise tourism, real estate, and an export zone, will proceed under the current government in partnership with CAI. During the signing ceremony, CAI’s Chief Corporate Officer confirmed that these key components will remain integral to the development.

The Maldives Industrial Development Free Zone (MIDFZ) was established in January 2024 as a joint venture involving five state-owned enterprises. This initiative, which aligns with plans initially formulated by the previous administration, aims to execute strategic projects essential for the nation's economic development.

In a written response to an inquiry from RaajjeTV regarding the progress made under the agreement signed with CAI, MIDFZ confirmed that no work has been carried out to date.

"No work has commenced under the framework agreement," stated the Maldives Industrial Development Free Zone, as the agreement nears its second anniversary since signing.

Singaporean media reports have revealed that authorities in the country have launched an investigation into CAI, a Singapore-based firm that recently signed an agreement with the Maldivian government, over allegations of money laundering. As part of the probe, two of the company's directors have been arrested, and the Singaporean government has frozen more than SGD 160 million (USD 124 million) held in various bank and securities accounts.

The Monetary Authority of Singapore (MAS), the nation’s central bank, has disclosed that it received information regarding illegal activities being conducted at CAI. MAS further noted that the company was found to have committed serious lapses in complying with established anti-money laundering regulations.

In a statement released on March 10th this year, MAS confirmed that a special joint operation was conducted against the company in collaboration with the national police. However, the authority has not disclosed the identities of the two directors arrested in connection with the case.

Speaking at the special ceremony held to sign the agreement with CAI, the Minister of Economic Development, Transport and Trade, Mohamed Saeed, described the occasion as a historic milestone. He emphasized that this is a significant step toward achieving President Dr. Mohamed Muizzu’s vision for diversifying the Maldivian economy.

Furthermore, he expressed his gratitude to CAI for their decision to provide assistance for this project.

Minister Saeed further stated that President Muizzu possesses the capability to spearhead such a large-scale and complex project. Elaborating on this, the Minister noted that while previous administrations had decided to launch maritime services in Ihavandhippolhu, they had failed to bring the plans to fruition.

"Several previous administrations have considered launching this service. However, no practical steps were taken to make it a reality. Therefore, I would like to specifically highlight that President Muizzu is an educated young leader with extensive experience in the field of engineering," Saeed said.