STO chief Shimad appointed subsidiary Fenaka's chairman
Fenaka had plunged into severe financial problems due to increased debt and a large increase in the number of employees.
State Trading Organisation (STO) Managing Director Shimad Ibrahim has been appointed as the Chairman of Fenaka Corporation, as part of making the debt-laden utilities company a subsidiary of STO.
In addition, two board members have been appointed to Fenaka:
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Ahmed Mazin - State Minister of Finance
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Mohamed Nizam - Chief Financial Officer at STO
President Mohamed Muizzu on August 25 decided to designate debt-laded Fenaka Corporation as a 100% subsidiary of the STO.
The president made the decision after discussing the paper presented by the finance ministry at the cabinet meeting held.
The decision includes amendments to the articles of association, strengthening governance and alignment of the company with best practices as practiced in the STO, streamlining business activities and implementing good practices.
At the same time, STO will be given the option to determine the number of employees of Fenaka. In doing so, Fenaka will consider how to relocate employees without laying off as many employees as possible.
A committee comprising representatives of the finance ministry, Privatisation and Corporatisation Board and STO will be formed to carry out this phase, share information on the change and carry out the necessary works to bring about the change.
During the government of former President Ibrahim Mohamed Solih, Fenaka had plunged into severe financial problems due to increased debt and a large increase in the number of employees. The company owes suppliers billions of Rufiyaa.
In order to cut costs, Fenaka is laying off employees hired for its projects. More than 900 employees have been laid off so far.
