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6 Simple Questions Any Malaysian Can Ask 1MDB’s Board (by CiliSos)

IT IS THE WEEKEND. 

Therefore we shall just talk about something serious in a light-hearted kind of way.

Below is an article by the website CiliSos which delved into the financial fiasco called 1MDB. CiliSos asked 6 simple questions for the government and 1MDB to answer.

Be careful CiliSos, the Prime Minister in his latest blogpost had said that those who question 1MDB (actually he was only addressing Tun Dr Mahathir) are motivated by self-interests, not Malaysia’s interests. Why are you so selfish CIliSos?

But since everyone are asking the same type of questions, it seems all of us the rakyat are selfish people.

Good work on the article. We love it. 

>START<

6 SIMPLE QUESTIONS ANY MALAYSIAN CAN ASK 1MDB’S BOARD🙂

Before we begin, if you’re reading this and you’re still not very sure about what exactly 1MDB is, we highly recommend reading another article that we’ve written here.

If you’ve followed the news on 1MDB, you may have heard that its CEO, Arul Kanda Kandasamy, recently gave a breakdown of the RM42 billion debt of 1MDB.

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In his statement, Arul Kanda shows us how much was invested in what. He shows us that the debt did indeed reach a total of  RM42 billion (RM41.8 to be exact). He shows us that we owe people a lot of money. Then he says this.

“We trust this clarification will help to clear any confusion on this matter.” – 1MDB CEO, Arul Kanda, as quoted by The Malay Mail Online

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So we know we owe a lot of money is involved, we know we have a lot of debt, and we know where all this debt is from. Unfortunately, for most of us, these numbers are just numbers. We don’t know what they mean, we don’t know how they affect us, and we sure don’t know what’s at stake.

So Arul Kanda’s answers mean nothing to most Malaysians. (Full disclosure: Arul Kanda was also the school captain at our editor’s college)

Tony Pua (the guy who first brought all of this to light) stated that the answers from Arul Kanda do nothing to quell our curiosity but raise more questions and suspicions. And we agree, because we at CILISOS want to ask more questions as well.

So here are 6 reaally basic questions that should be answered by 1MDB to the rakyat.

1. Has 1MDB made any real money?

First, let’s define the term “real money”. Well, it’s money that came from actually providing a sale or a service. Meaning that it earned something by providing value to someone else.

A couple of news articles have pointed out that while 1MDB has been posting profits in their annual reports, these have not been due to selling or providing anything but from revaluation. Revaluation is basically the process of increasing or decreasing the value of assets ‘in case of major changes in fair market value of the fixed asset’ (click to read more).

Would you give our Prime Minister RM4000 to invest for you    CILISOS   Current Issues Tambah Pedas

How much of an impact does the revaluation have on the profits? Well, The Star reports that (as of 2014) 1MDB’s profits for the last 2 years have mainly been due to revaluation of their assets.

“For instance in 2013, 1MDB recorded a net profit of RM778.24mil, helped largely by property revaluation gains of RM2.7bil.” – The Star

Okay, but what about other profits? Has 1MDB made profits from anything other than the revaluation of their assets? So we tried looking for documents that talked about 1MDB’s profits.

First we found that Arul Kanda stated that the company’s earlier venture with a Saudi Arabian company called PetroSaudi had earned them RM1.78 billion. But then Tony Pua said that this money never came back to Malaysia. You can read how Tony Pua talks about where this money went here. So no real money there.

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Besides that, news portal Malaysiakini has tried to obtain the financial reports of 1MDB’s profits but all they got were reports saying that there were profits. But honestly, what we want to see is what the profits are! 

And aside from these two, nothing else. So the point is that we still can’t find any profit that was, in a sense, real

2. Why did 1MDB invest so much money when it was already in debt?

Before we go into that, let us just clarify something with ugaiz. Contrary to popular belief, 1MDB is not a Malaysian sovereign wealth fund.

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According to investopedia.com, a sovereign wealth fund is usually formed when a nation has excess money. Instead of keeping this money in the central bank (i.e. Bank Negara), a sovereign wealth fund utilises the surplus via investments.

(Ironically our other sovereign wealth fund, Khazanah Nasional, also doesn’t refer to itself as a sovereign wealth fund so we’re not entirely sure that we actually have one.)

1MDB’s official website states a major difference between them and a sovereign wealth fund is that a sovereign wealth fund is funded by the gomen and invests on its behalf. On the other hand, 1MDB, while fully owned by the gomen, raises and invests its own capital.

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But for a company that has to raise and invest its own capital, to be RM42 billion in debt is a crazeeee situation to be in. How in the world does anyone even end up with a RM42 billion debt when you start off with nothing? As we’ve just talked about, 1MDB is NOT a sovereign wealth fund and has to raise its own capital.

So the thing here is, 1MDB did not have any capital to begin with.

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In regards to whether or not investments companies generally borrow to invest, we spoke to a guy who wants to be known as FreeLunch, (a former auditor whom we last spoke to here and whom now we owe 2 free lunches) and he had this to say.

Most funds don’t take debt to invest. One of the Norwegian funds use profits from oil sales to invest globally on behalf of the government.

Funds like hedge funds accept money from individuals/corporations to invest, generally no debt. Private investment funds like those run by rich families take on surplus funds and use it to invest.” – FreeLunch

Which basically means that investment companies rarely if not never invest using debt. So why did 1MDB invest on debt?

Do visit CiliSos for the rest of the article and questions.

15 thoughts on “6 Simple Questions Any Malaysian Can Ask 1MDB’s Board (by CiliSos)

  1. Holy shit that was a long article. But a good one. But i doubt the morons and retards near the pm and especially the pm who i think is a hillbilly retard, would read it and understand. The article is a major elaboration on much simpler questions that have been making the rounds but till this day, no such answer. There are answers, but only on levels of hillbilly retards. give us a breakdown of the money spent is followed by an answer of the money is in safekeeping with my wife’s fat chinky friend. I really think najib is a retard. Maybe someone can do a check if his lineage is shrouded with first or second cousins. Get a load of his website. I doubt he even proofreads the shit they churn up with. At the end of the day, it makes him look even more like a retard. Pity the fool who has a fat shiny wife

    Like

  2. I did not go past question no 2, as a non finance idiot like me can give an equal analogy.

    No 1.
    When u hutang to buy a house, do you alwwys get incum straight away?

    No 2
    After buying a first house with debt still owed to the bank, cannot loaned for a car? Loan 2nd or 3rd property?

    I did not bother with the rest…

    Penyu

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    • Duh!

      Penyu doesnt just dont know finance…it appears that even common sense is missing with your anology:

      Penyu: When u hutang to buy a house, do you alwwys get incum straight away?

      My answer: No but I will make sure I have enough income from my existing investment or other source to service the hutang! What about 1MDB??!

      Penyu: After buying a first house with debt still owed to the bank, cannot loaned for a car? Loan 2nd or 3rd property?

      My answer: Yes…after buying house with debt….you can loan for other items provided that you have enough sufficient financial capability to service those loan. When you already have multiple existing loan, the bank will be very strict in providing you with another. Most ordinary mid income people will not get pass the second house for another loan!

      Most ordinary people with slightly higher or average IQ will not go for another loan if they deemed that this loan cannot be sustainable.

      Wht about 1MDB? The adviser and board of directors must be retard or something to continue racking up debt up to the tune of 42 billion!

      Like

    • So you agree for 1mdb to accumulate 42 billion ringgit? At least put in more efforts in your disagreement. Not worth to whack here, it’s like beating up a 14 year old girl.

      Like

      • Said Abraham Lincoln:

        “…I do not mean to say that this government is charged with the duty of redressing or preventing all the wrongs in the world; but I do think that it is charged with the duty of preventing and redressing all wrongs which are wrongs concerning itself.”
        – 1859 Speech at Cincinnati, Ohio

        “While we must, by all available means, prevent the overthrow of the government, we should avoid planting and cultivating too many thorns in the bosom of society.”
        – 1864 Letter to Edwin M. Stanton

        It is morally wrong to cover up the misappropriation of the humongous 1MDB funds since its failure and ensuing losses will encumber the citizenry for a long time into the future.

        Like

  3. DSN is on the offensie against TDM now thanks to his revamped psyops/psywar team. It is NOT a personal quarrel between TDM and DSN. It is about fighting for the well being of the rakyat. Nothing to forgive. No sins between them and their respective supporters and allies.

    The ballot box will determine the winner.

    Hang Kasturi

    Like

  4. 1 question for Najib

    – Why is it so difficult for you to resign when precedent has been set in UMNO of which you were also part of?

    Like

  5. Thanks guys, but we also took alot of effort to write this article, so appreciate if you don’t take the whole thing? Please reduce to an excerpt🙂

    We’re usually alot stricter and will take action about this sort of thing, but since you gave us a nice intro, we’ll just wait for you to excerpt (not more than 30% of the article, with a link to full article).

    Like

  6. Pingback: 6 Simple Questions Any Malaysian Can Ask 1MDB’s Board (by CiliSos) | ajai62

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