PCB instructs MTDC to remove chairman Faiz after 6-year term

The Privatization and Corporatization Board (PCB) has instructed Maldives Tourism Development Corporation (MTDC) to complete procedures to remove Board Chairman Abdulla Faiz after his tenure exceeded the six-year limit set for independent directors.

Faiz was appointed Chairman of the MTDC Board on 13 February 2019.

Under the Corporate Governance Code of the Capital Market Development Authority (CMDA), an independent director may serve on a company's board for a maximum consecutive period of six years.

Faiz has now served on the MTDC Board for more than six years.

In a letter signed by PCB President Mohamed Nizar and sent to MTDC Managing Director Haris Mohamed on Wednesday, the PCB informed the company of its decision to remove Faiz as Chairman and as a member of the Board of Directors.

The PCB instructed MTDC to complete the procedures required for his removal in accordance with the company's Articles of Association and inform the board once the process has been completed.

The directive comes two years after the PCB mistakenly informed Faiz that he had been removed from his position before his term had ended. The PCB acknowledged the error in 2024.

The latest decision comes ahead of MTDC's Annual General Meeting for 2025, scheduled for 31 August.

The appointment of five directors representing public shareholders is among the items on the agenda for the meeting.

MTDC's Board of Directors consists of nine members, including the Chairman. The government, which holds a 47 per cent stake in the company, appoints four directors. Five directors are elected to represent public shareholders.

The upcoming AGM also comes as MTDC considers changes to its shareholding structure.

The company's Board of Directors has approved presenting a proposal to shareholders to conduct a rights issue, under which additional shares would be offered for purchase.

The proposed transaction could result in the government increasing its current 47 per cent holding and becoming the majority shareholder if public shareholders do not subscribe to their allocation of additional shares.

The proposed rights issue has also drawn attention amid reports concerning the head lease of Gaafu Dhaalu Maguhdhuvaa, where Ayada Maldives operates.

Reports have alleged that plans are being considered to transfer the head lease to the Turkish company operating the resort at a price below its value.

MTDC has previously denied that it intends to sell ownership or lease rights to an island below market value.

The proposed rights issue and changes to the company's board are expected to place further attention on the 31 August AGM.