Najib Razak / Socio-economy / Umno & Barisan Nasional

1MDB: Arul Kanda and his clarification on the RM42 billion debt

After more than 12 months since people have seriously asked questions about the financial scandal in the form of 1MDB, its CEO Arul Kanda made a brief press statement to show that all RM42 billion debts are accounted for.

The stupidest thing 1MDB’s spinmasters is banking on is to tell the public that the critics have been saying RM42 billion is missing from the 1MDB accounts or RM27 billion is lost. And then these spinmasters proceeded to show its accounts which stated RM42 billion is there in the books. This is exactly what Arul Kanda is doing.

The debt is there but where did the money go?

The debt is there in the accounts but where did the money go to, it wasn’t clarified.

Arul Kanda stated:

“In recent weeks, there has been much speculation about the use of RM 42 billion of debt raised by 1MDB, and more specifically that RM 27 billion of debt proceeds are alleged to be “lost” or “missing”. We provide a summary of what the RM42 billion debt has been used for, information that is fully disclosed in 1MDB’s audited and publicly available accounts from 31 March 2010 to 31 March 2014. We trust this clarification will help to clear any confusion on this matter.”

Did this answer the questions:

1) Why did 1MDB used a company linked with Jho Low, Brazen Sky to invest in Cayman Islands? What happened to the money? In news report back in May 2014, the amount cannot be verified by 1MDB’s external auditor.

Based on 1MDB’s latest financial documents for the year ended March 31, 2013, its auditors were unable to determine details on the US$2.3billion (RM8.05 billion) investment. – source

Of course, the figure is stated in 1MDB’s financial statement. But what happened to that billions of money?

2) The high financial cost in acquiring those unnecessary loans which according to the books above, costing more than RM5 billion in interests which taxpayers have to bear. On top of that, why pay RM1.54 billion to Goldman Sachs being fees and commission just to raise RM15 billion bonds when only RM400K was paid to banks when Prasarana raised RM2 billion bonds? That’s 10% against 0.02%

Even Penerbangan Malaysia Bhd for example, had raised USD1 billion in bonds paying only 0.5% in fees and expenses.

From the chart above, that RM4.5 billion in cost of finance is a huge red flag. On top of it all, taxpayers are already footing the bill for RM950,000,000 in standby credit given to 1MDB in March 2015.

3) Is all the RM4.2 billion ‘investment’ in Aabar all accounted for? What are the returns for this and to who and into what was the money invested in?

4) How come 1MDB agreed to pay PetroSaudi USD700 million (RM3.2 billion) of interest free loan given just a few days before? This money was banked in into Good Star Ltd’s account. Good Star Ltd  belongs to Jho Low. All this was discovered through chain of email which was never denied by 1MDB nor Jho Low. Even the ‘purported loan’ initially given by PetroSaudi to 1MDB was doubtful in its authenticity and existence.

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From the JV agreement between 1MDB and PetroSaudi back in 2009

5) Who is Jho Low and why is he handling all the business deals involving 1MDB. Is he a staff of 1MDB staff or an authorised civil servant in Ministry of Finance?

These are just some basic, uncomplicated question which Arul Kanda simply could not and did not answer in his brief press statement above.

We all know the figure is there stated in the financial statement. Even when a company which has RM1 million debt will show that RM1 million in its final audited accounts. But what happened to the loan is something which nobody was prepared to answer, if it has been siphoned off for ‘special’ usage.

But we are in luck. Hopefully the Finance Minister II can answer these 5 questions (and more) comprehensively tonight.

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14 thoughts on “1MDB: Arul Kanda and his clarification on the RM42 billion debt

  1. What is that 6 billion inhereted debt? inhereted debt of the power companies that 1MDB bought?

    They bought these IPPs and they settled ALL the debt at once as well? hence the extra 6 billion gone out of the 42 bill debt???

    Still confused….

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      • It is also interesting to compare this now official? 1MDB fact of the 42 billion against the pro Najib bloggers claim that they have made in the past.

        For example here in Tun Faisal: http://tunfaisal.blogspot.com/2015/04/1mdb-antara-fakta-dan-auta-tun-m.html

        he listed the “fact” that 1MDB has “pemilikan 15 loji kuasa dan desalinasi di enam buah negara, Mesir, Bangladesh, UAE, Sri Lanka, Pakistan dan Malaysia dengan kapasiti penjanaan tenaga bersih 5594MW”

        Where is this overseas “loji kuasa dan desalinasi” in the figure above??? Maybe it is lump together under the investment???

        hmmm….interesting…..

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  2. It is also interesting to compare this now official? 1MDB fact of the 42 billion against the pro Najib bloggers claim that they have made in the past.

    For example here in Tun Faisal: http://tunfaisal.blogspot.com/2015/04/1mdb-antara-fakta-dan-auta-tun-m.html

    he listed the “fact” that 1MDB has “pemilikan 15 loji kuasa dan desalinasi di enam buah negara, Mesir, Bangladesh, UAE, Sri Lanka, Pakistan dan Malaysia dengan kapasiti penjanaan tenaga bersih 5594MW”

    Where is this overseas “loji kuasa dan desalinasi” in the figure above??? Maybe it is lump together under the investment???

    hmmm….interesting…..

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  3. IPP COST= overpaid market value
    LAND COST= overpaid market value
    FINANCIAL COST= at 15% of RM42b?
    INVESTMENT FUND= is the fund still there? what is the current value?

    Zoom into each of these and you could find fraud, cheating, kickback, criminal breach of trust at every corner. Keep digging BNM, MACC, POLICE, PLEASE!!!

    Liked by 1 person

  4. There are times when the body language speaks louder than the words uttered. FInance Minister II was definitely uncomfortable being the 1MDB spokesman. His nervous cough punctuated every of his sentence for the whole session.

    He failed to answer both Shuhaimi and Sayed Munawar’s questions in a convincing manner. Cash-assets-units, Jho Low, Good Star, Brazen Sky, MAS, BN Governor – all unanswered.

    FM2 is the fall guy – pity him. Instead of convincing the public, he made it worse by being so unsure. Now the popular perception is that 1MDB is the scandal of the century.

    Liked by 1 person

  5. 1) Check the TRUE market value of rm12 bil IPP purchase. How much of it is inflated? Pls investigate 2) rm 6bil “inherited debt” ? So the IPPs were also debt laden by rm6 bil? Pls investigate. 3)rm 1.7 bil land costs…why 1mdb is able to buy land so cheap from the govt? Smells fishy. Pls investigate. 4) Financial expenditure rm 5.8 bil ? That’s nearly 14% proportion of debt. Crazy. Pls investigate 5)rm 15.4 bil “investment fund”. That’s the LION’s SHARE of total debts? How much ROI so far? NEGATIVE CASH FLOWS? What exactly do these funds invest in? Surely need to investigate.
    Admittedly the ASSET side is not shown here. We all know to balance the books ASSET = LIABILITIES (oops..equity is negligible). Question is, what is the TRUE value of these assets & how much of these “assets” be converted back to CASH? PLS INVESTIGATE.

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  6. Pingback: Penjelasan Arul Tentang RM42 Bil Lebih Banyak Menimbulkan Persoalan Tambahan | Berita Malaysia

  7. If IPIC is genuine in it’s interest to assist 1MDB, all it needs to do is release the RM4 billion deposit that belongs to 1MDB so that 1MDB could meet its June deadline. No need the USD1billion “not bailout, not debt” cash injection. Well, that is If the rest of the assets are present and accounted for lah.

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  8. “1MDB: Arul Kanda and his clarification on the RM42 billion debt”

    “We all know the figure is there stated in the financial statement. Even when a company which has RM1 million debt will show that RM1 million in its final audited accounts. But what happened to the loan is something which nobody was prepared to answer, if it has been siphoned off for ‘special’ usage.”

    Yes indeed.

    This is how PAC & MPs should conduct the investigations on everyone in 1MDB including the Chairman & Fort Knox boss)…

    All of them should be “Grilled” just like this…

    “How much of that shitty deal did you sell to your clients?” Goldman Sachs Hearing – https://www.youtube.com/watch?v=whlzFWwVv98

    Jul 21, 2009 – Alan Grayson: “Which Foreigners Got the Fed’s $500,000,000,000?” Bernanke: “I Don’t Know” – https://www.youtube.com/watch?v=n0NYBTkE1yQ

    Feb 11, 2009 Alan Grayson on the Worst Deal Since Manhattan Was Sold for $24 in Trinkets – https://www.youtube.com/watch?v=A-DOwLnQ4nk

    Feb 10, 2010 Rep. Alan Grayson: $12 Trillion Gone and No One Punished – https://www.youtube.com/watch?v=gXhuaTfjTYM

    The men who crashed the world – https://www.youtube.com/watch?v=JYTyluv4Gws

    To rob a country, own a bank – https://www.youtube.com/watch?v=sA_MkJB84VA

    Banksters – William Black tells the real truth – https://www.youtube.com/watch?t=19&v=J8CqaHTygSc

    12-Year Old Child Reveals One of the Best Kept Secrets in the World – https://www.youtube.com/watch?v=JHQOX8EVNmE

    “…The most elegant solution comes from Joshua Ronen, a professor at New York University. He suggests “financial statements insurance”, in which firms would buy coverage to protect shareholders against losses from accounting errors, and insurers would then hire auditors to assess the odds of a mis-statement.

    The proposal neatly aligns the incentives of auditors and shareholders—an insurer would probably offer generous bonuses for discovering fraud. Unfortunately, no insurer has offered such coverage voluntarily. New regulation may be needed to encourage it.

    Finally, the answer for free-market purists is to scrap the legal requirement for audits. Today accountants enjoy a captive market, and maximise profits by doing the job as cheaply as possible. If clients were no longer forced to buy audits, those rents would disappear. In order to stay in business, the Big Four would then have to devise a new type of audit that investors actually found useful.

    This approach would probably yield detailed reports designed with shareholders’ interests in mind. But it would also allow hucksters to peddle unaudited penny stocks to gullible investors. Whether government should protect people from bad decisions is a question with implications far beyond accounting.”

    The dozy watchdogs – http://www.economist.com/news/briefing/21635978-some-13-years-after-enron-auditors-still-cant-stop-managers-cooking-books-time-some

    Bankers Arrested In Iceland, Ireland, UK, USA, Switzerland, India, France, Russia, Austria…- https://www.youtube.com/watch?v=dmOZ3jtGtCc

    “Well organized criminal group we call Mafia, the best organized Mafia, we call the Government.”

    You be the judge.

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  9. Hi, first time here. Do you mind if I quote your articles for my research paper on 1MDB scandal? It’s for my postgraduate thesis on influence of secondary media during socio-political upheavals. Just would like you to know that. Thank you.

    ps: that’s my real email, please feel free to state any objections to my intentions.

    Like

  10. Tracing back the articles about Arul Kanda all the way to this article. We know he is a dumb guy just from the many out of mind statements he made since his appointment. 1MDB gets a CEO who is dumber than the ones before. Cash is king.

    Like

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