1MDB is being defended arduously by the pro 1MDB factions under the Prime Minister’s watch. It is an uphill task indeed. What more, even the younger brother of Prime Minister is gunning 1MDB down by urging its Board of Director to resign because of a complete mistrust in its financial situation.
Indeed, the financial problems associated with 1MDB is at a catastrophic stage; involving astronomical amount of taxpayers’ money.
1MDB started and funded with only RM1 million as its capital. But it was able to buy several IPPs, huge area of government lands etc totalling billions of ringgit. Among others:
a. Purchase of Tanjong Energy (now known as Powertek Energy Sdn Bhd) from Ananda Krishnan for RM 8.5 billion. This is higher than market price. The licence was about to expire.
b. Purchase of Genting Sanyen Power (now known as Kuala Langat Power Plant) for RM 2.3 billion. Again high above market price. The licence was about to expire.
c. Purchase of Jimah Energy for RM 1.2 billion.
d. Purchase of 70 acres of land in Jalan Tun Razak for RM320 million i.e: RM64.00 psf.
e. Purchase of 495 acres of land in the former Sungai Besi TUDM airport (now known as Bandar Malaysia) about RM 363.5 million i.e: at RM 91.00 psf. Estimated value RM1,000 psf.
f. Purchase of 234 acres land in Air Itam in Penang RM 1.38 billion i.e: at RM135.00 psf.
Total amount = more than RM14 billion. This does not include billions of ringgit in Cayman Islands and Singapore. The total number of borrowings as appeared in 1MDB’s books now stood at RM42 billion!
Where did 1MDB get all the money to buy all these assets? That’s right, through loans. Billions of it. And guaranteed by the government.
Is it prudent to borrow an unbelievable amount of money when you have only RM1 million as capital? Obviously if it’s any other kind of business, it would be a severe case of mismanagement. If some other board of directors are doing it, the shareholders will immediately convey an EGM to remove all of the directors for dereliction of duty.
Tell us, if you have only RM1, is it prudent to borrow RM42,000?
Nazir Razak was partly right when he said the directors should resign for failing in its responsibility in appointing an independent auditor instead of waiting for the Auditor General’s audit report.
“The immediate check for a responsible board is to appoint an independent (auditor) now … otherwise the board and management, in my view, should resign.
”It is your basic responsibility. There’s a complete mistrust in your financial situation. You have to responsibly deal with that. But instead you sit there and wait for AG.
“To me that’s irresponsible. If you do that then it’s better for you to step down and let someone else come in and take over,” Nazir told the media over a luncheon at the Asean Business Club (ABC) forum.
What he should have also said was, the board of directors should have resigned much earlier for failing to adhere the simple rule in business — never bite off more than you can chew.
Accumulating gigantic amount of debt even before seeing any returns? What a preposterous business model. The risk management department in 1MDB must have been run by monkeys.
Buying dodgy, nearly expired IPPs at grossly overpaid prices, accumulating debts along the way, while buying federal lands at grossly below market prices then selling these prized possessions to foreigners just to pay the interests of those debts!
At this juncture, we really do not understand why those pro 1MDB people have not asked the Prime Minister to resign from his Finance Ministerial post yet. We could understand that the pro Najib people have become blind sided by their inability to discern what is wrong and what is right.
But to at least see that a serious abuse of power that came from a centralised figure that holds so many portfolios simultaneously have caused 1MDB to bulldoze all levels of checks and balance. Is this acceptable?
The cabinet was in the dark, otherwise Deputy Prime Minister wouldn’t have said that even he could not explain the 1MDB scandal.
Furthermore, the Chairman of 1MDB’s Board of Advisors, wearing his Prime Ministerial hat, has ordered the AG and the PAC to investigate 1MDB; and to make matters even more ridiculous, 1MDB have not even froze its accounts or transactions pending these investigations. They are happily going about their business, albeit frantically selling everything they have just to pay off their debts.
The taxpayers will get hurt. The scandal will put a big dent on the economy. All because the government wanted to do business blindfolded… trusting dodgy businessmen and half cooked professionals. This is under this government’s watch. And they failed the people.
And yet, Najib Razak and his fans are blaming Tun Mahathir for what he did 2o years ago?
And grow a pair.
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