Auditor General Refuses Opinion on Fenaka's 2024 Accounts as Debt Hits MVR 3.9 Billion

The Auditor General has issued a report determining that no opinion can be expressed on Fenaka Corporation Limited's 2024 financial statements, citing a lack of sufficient evidence to confirm the accuracy of the company's financial figures. The report, signed by Auditor General Hussain Niyazi and issued on 1 November 2026, states that because sufficient evidence needed to confirm the accuracy of the company's financial figures had not been obtained, no opinion could be expressed on those statements — a finding that reveals major problems in the company's financial management. One of the biggest issues highlighted is that the accuracy of the opening balances for 2024 and the comparative figures for 2023 had not been confirmed. The Auditor General stated that, as in previous years, no opinion could be given on Fenaka's audit reports, and therefore the figures in the financial statements cannot be regarded as credible. The report also highlights that complete details of the journal entries made during 2024 had not been provided to the audit. Major concerns were also raised regarding the company's income and expenses. The audit highlighted that there was no adequate system for accounting the MVR 36.8 million in income received from subcontract projects and the MVR 357.9 million in expenditure incurred on those projects. It also showed that there was no formal agreement relating to the MVR 20.5 million included as the mosques' tariff out of the MVR 789 million included as government subsidy. The report reveals major shortcomings in the maintenance of Fenaka's assets and inventory. While there was a difference of MVR 147.5 million between the company's fixed asset register and the financial statements, the accuracy of the MVR 1.6 billion capital work in progress had also not been confirmed. In addition, although it was stated that MVR 530 million in inventory was held, the audit report states that MVR 444.5 million of that consists of figures held as negative balances. By the end of 2024, Fenaka had incurred a large loss of MVR 547 million. Although this is smaller than the MVR 811 million loss incurred in 2023, the company's debt had increased excessively. Current liabilities, or short-term debt, had risen to MVR 3.9 billion — an amount MVR 2.7 billion more than the company's assets. For these reasons, the Auditor General raised questions over the company's ability to continue operating. On administrative operations, MVR 1.4 billion had been spent as administrative expenses, of which adequate documentation required for MVR 398.4 million in expenditure had not been provided. The report also highlights that the accuracy of the MVR 3.5 billion in trade payables had not been confirmed. It further revealed a large discrepancy between the MVR 2.5 billion stated as the company's share capital and the MVR 750 million registered at the Ministry of Economic Development. The audit report further states that, in line with the Government's decision to strengthen Fenaka's operations, work has begun to transfer some of the company's operations to STELCO and MWSC. The Board decided in September 2026 to transfer some services to STELCO, and it has also been decided to transfer the water and sewerage services of Addu City and Fuvahmulah City to MWSC. However, the report states that the financial impact these transfers will have has not yet been estimated.