Court rules MDP presidential hopeful Shamheed liable for $281,474 bank debt

The Civil Court has ruled that Hulhumalé South MP Dr Ahmed Shamheed, who has announced his intention to contest the Maldivian Democratic Party (MDP) presidential primary, is jointly liable for an outstanding debt of USD 281,474.20 owed to Maldives Islamic Bank (MIB).

The ruling, issued on Wednesday, concerns a USD 500,000 financing facility provided by MIB to Duplex Private Limited, a company in which Shamheed and four other individuals were shareholders and guarantors.

The bank filed the case after Duplex failed to make repayments under the financing agreement.

According to the Civil Court judgment, MIB provided the USD 500,000 facility to Duplex through a sale-and-leaseback financing arrangement involving a cruise vessel owned by the company.

Shamheed and four other individuals signed as guarantors for the financing facility, undertaking responsibility for the company's repayment obligations.

Court documents show that USD 244,826.50 in outstanding payments remained unpaid as of 4 November.

A further USD 36,647.70 was outstanding in charity payments associated with the financing agreement, bringing the total amount owed to USD 281,474.20.

In its ruling, the Civil Court determined that the outstanding amount constituted an established debt for which all defendants, including Shamheed, were jointly and severally liable.

The court ordered the defendants to settle the debt within six months by making monthly payments to MIB of no less than the amount due for each month.

It also directed them to continue paying the monthly rental charges and charity payments accruing under the financing agreement during the repayment period.

The ruling means Shamheed is among the parties legally responsible for settling the outstanding amount, although the debt arises from a financing arrangement entered into by Duplex Private Limited.

The judgment is significant because Article 73 of the Constitution sets out the qualifications required to remain a member of Parliament.

Under the provision, a person with an established debt must comply with the terms of a court order requiring repayment to remain eligible to hold a parliamentary seat.

Failure to meet the constitutional qualifications can result in the loss of parliamentary membership.

However, the Civil Court ruling does not automatically mean Shamheed has lost his seat. The constitutional issue would arise if he failed to comply with the repayment order.

Shamheed also has the right to appeal the Civil Court judgment to the High Court.

A similar case previously resulted in the loss of a parliamentary seat held by Ahmed Sinan, the former MP for Hithadhoo North.

Sinan, who represented the ruling People's National Congress (PNC), lost his seat after failing to comply with a court order requiring repayment of an established debt.

The Supreme Court subsequently determined that Sinan had lost his parliamentary membership.

A by-election was held to fill the vacancy, with former Addu City Mayor Abdulla Sodiq of the opposition MDP winning the seat.

Shamheed's case comes as he prepares to contest the MDP presidential primary, with the Civil Court ruling placing him under a legal obligation to settle the outstanding debt in accordance with the repayment schedule.