MP Dr. Shaheed Alleges Political Affiliations Behind State Company Dismissals, Citing Lack of Clear Reduction Policy

Maldivian Democratic Party (MDP) MP for Hulhumalé South Dr Mohamed Shamheed has alleged that state-owned enterprises (SOEs) are selectively dismissing employees affiliated with the opposition party under the justification of reducing staff numbers.

Shamheed made the remarks during today’s parliamentary debate on a resolution submitted by MDP MP for Kendhoo constituency Mauroof Zakir, which seeks to determine Parliament’s position on reports of ongoing dismissals from government companies under the stated purpose of staff reductions.

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The Hulhumalé South MP claimed that employees terminated as part of a planned 33 per cent reduction in staffing were all individuals affiliated with the MDP who had participated in the party’s activities.

He said that although the government had cited downsizing as the reason for the dismissals, no clear policy had been introduced outlining how state companies should carry out staff reductions.

Shamheed Questions SOE Workforce Growth and Financial Position

Referring to figures previously stated by former Finance Minister Moosa Zameer in April, Shamheed said state-owned companies had a workforce of 42,000 employees, compared to 34,000 employees when the previous MDP administration left office.

He further claimed that Fenaka Corporation recruited 1,461 employees in the period leading up to the parliamentary elections.

Shamheed said the increase in staff numbers had occurred alongside rising debt among state companies, while their revenue and profits had declined.

“While the debt of state companies is growing exponentially — rising from MVR 32 billion at the end of the MDP government to MVR 38 billion — and staff numbers have dramatically increased, the revenue and profits of these companies have declined,” he said.

He noted that the Finance Minister had previously stated that any restructuring and reforms would be carried out systematically under an established framework.

Shamheed said such an approach could have been accepted, but claimed that no staff reduction policy had been formulated to date.

“If it were being done that way, we might be able to accept it to some extent. However, to this day, there is absolutely no policy formulated on how companies should reduce their staff. Instead, if someone attends one of our [MDP] events, they get dismissed,” he said.

He also criticised what he described as companies attributing dismissals to directives from the Ministry of Finance and the Privatisation and Corporatisation Board (PCB), saying employees should not be removed without a clear basis.

President Says Dismissals Linked to Conduct Rules and Economic Pressures

President Dr Mohamed Muizzu last month said recent redundancies in state institutions were related to behavioural standards established under PCB guidelines and wider economic challenges, including the impact of the ongoing Middle East conflict.

Speaking during a press conference at the President’s Office, Muizzu was questioned about reports of employees being dismissed from state institutions, including allegations that some affected individuals were targeted due to political affiliations.

The President said employees of state institutions are required to comply with ethical and behavioural standards set by the PCB, and that action is taken when those standards are breached.

When asked specifically about claims that employees in some islands had been dismissed due to alleged political affiliations, Muizzu did not directly address the allegations but reiterated that dismissals are carried out only when PCB guidelines are violated.

The President further said the ongoing Middle East conflict involving the United States, Israel and Iran had placed additional pressure on the Maldives’ economy, requiring measures to manage financial challenges.

He said reductions in state employment may form part of broader fiscal adjustments, while maintaining that such decisions are not based on political grounds.