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1MDB’s response to former Deputy Prime Minister is misleading

We just couldn’t believe the level of absurdity 1MDB had subjected the people with its response to Tan Sri Muhyiddin Yassin just now.

The fact that they had the audacity in hoping that the people are dumb enough to believe them shows how desperate they have become.

Below is their response to Tan Sri Muhyiddin Yassin’s press release. Our comments in blue:

1MDB notes the press release issued yesterday by Tan Sri Muhyiddin Yassin. The characterisation of 1MDB as a “debt-laden company” is misleading, as Tan Sri Muhyiddin, a former Cabinet member, knows full well that the value of 1MDB’s assets exceeds its debt.

If people googled “1MDB debt-laden”, they will find numerous business articles about how 1MDB is swamped with debt which they are unable to settle on time. If you can’t even pay your finance costs totalling about RM2.4 billion per year, surely your ‘assets’ means nothing regardless if it exceeds your debt. The important thing is, the government had to fork out RM950 million in standby credit for you and you had to beg a foreign company to give another USD1 billion just to service your debts. Back in 2014, you even begged the banks to extend the payment deadlines a couple of times.

All this makes you debt-laden. It is you who tried to mislead the public by saying you are not debt-laden eventhough all evidence pointed out that you are. Your gearing is so high, your cashflow failed you. Please get a dictionary to know the meaning of ‘laden’.

This fact is reinforced by the significant value indicated by local and international investors for the ongoing sale of equity in Edra Energy and Bandar Malaysia.

The fact that you have to be broken up into separate entities and have to sell the assets you had heftily required just to alleviate your worsening financial situation reinforces the reality that you are indeed a debt-laden and problematic investment company.

As a Cabinet member when 1MDB was formed, Tan Sri Muhyiddin is fully aware of 1MDB’s capital structure. With RM1 million in equity from its shareholder, the Ministry of Finance, 1MDB raised capital on the markets – which is the debt on the company’s accounts.‎ Many businesses, both in Malaysia and abroad, have used debt to successfully build their asset base. In 1MDB’s case, from RM 1 million equity, total group shareholder equity of RM1.7 billion was generated as of 31 March 2014.

Many businesses around the world are perplexed as to how a RM1 million company could haphazardly tried to amass RM42 billion worth of debts. That is like a person with just RM1 went on to borrow RM42,000. Indeed, being idealistic is an understatement. It is bordering lunacy. On top of that, you then could not service the interests. What you fail to tell the public is that by 31 March 2014 you incurred a loss of more than RM600 million. Can we know what is the loss for 31st March 2015? We can’t because you are repeatedly late in submitting your yearly audited accounts.

Notwithstanding the subsequent and ongoing challenges, which are well documented and acknowledged, 1MDB remains confident of generating surplus value as we progress with the rationalisation plan.

What good is an equity surplus when you can’t even service your debt? Experiencing repeated losses will eat up your equity eventually. Hence, you will not have enough cash to pay your debts and fund your operations. You were behaving irrationally in your business which in the end, as disaster looms, you need a debt rationalisation plan to undo your nonsensical business model. If the people did not make enough noise in 2015, you might trudge on and drag Malaysia into a financial abyss.

1MDB regrets that, despite repeated clarifications, certain current and former politicians continue to issue half-truths about the company. It is now clear that this is part of a deliberate and politically motivated attack, to ‎sabotage not only our previously planned energy IPO but the ongoing implementation of our rationalisation plan.

The one that being political is 1MDB. Constantly behaving like a politician in trying to give misleading explanation, half-truths and covering up your mistakes. For instance, your IPO was planned to take off in 2014 but was delayed several times long before ‘certain current and former politicians’ had begun to criticise you. The failure to list Edra Energy was entirely your fault. You yourself sabotaged your business model with your own absurdity.

Despite this, 1MDB and our 100% ultimate shareholder, the Government of Malaysia, are fully committed to executing the plan, as presented to Cabinet on 29 May 2015.

Out of several points the former deputy prime minister had said about 1MDB in his press release, you are only harping about the word ‘debt-laden’. Even then you failed in trying to disprove it. But it is good you have recognised that your 100% owner is the Government of Malaysia thus, you are ultimately answerable to the people. The people can ask you questions or call your bluff. And what is more important is to know who was responsible for the financial fiasco that had costs taxpayers billions in standby credit and losses. In the end it is the people who had to bear the cost of this rationalisation plan. Therefore coming back to the accusation that the former deputy prime minister had been misleading; who is it now that was trying to mislead who? If only 1MDB had been honest in conveying the truth, accepting criticisms and their failures, and at least have an ounce of accountability towards the public, then we wouldn’t have this huge ‘trust deficit’.

Thank you.

You might also want to read:

1) AGC confirms binned two Bank Negara requests for action in 1MDB case

2) Akaun 1MDB Tangguh 6 Bulan – Apasaja Berkaitan 1MDB Mesti Ada Tangguh-Tangguh!

3) Sue them all for 1MDB defamation, Tee Keat tells Najib after court threat against Liong Sik

4) Top debater slams PM as a ‘national disgrace’

5) MEMAHAMI KERTAS SIASATAN BANK NEGARA YANG DIHANTAR KEPADA PEGUAM NEGARA UNTUK TINDAKAN UNDANG-UNDANG KE ATAS 1MDB

8 thoughts on “1MDB’s response to former Deputy Prime Minister is misleading

  1. Not just misleading; they are getting disgustingly arrogant.

    1MDB came within 2 weeks of triggering an EOD after failing to meet its 2 billion loan repayment to RHB and Maybank, remember? By missing 2 consecutive repayments? Then this triggered a whole sequence of lies, followed by an admittance that yes, it was Ananda Krishnan who bailed out the mess. That raises a huge conflict of interest given Ananda Krishnan’s interests in 1MDB power assets.

    Ohhhh, and the RM975 million bailout? Forgotten?

    Delayed audit? Again?

    Deloitte were barred BY 1MDB ITSELF from commencing the audit, EVEN BEFORE ANY DOCUMENTS WERE SEIZED.

    https://api.attictv.com/news/5578d9c3e6d7752271c8aace?render=true

    And there has been no answer to the question why 1MDB’s auditors were replaced twice within several years.

    And lest we forget:

    KUALA LUMPUR, July 11 — The hurried signing in 2009 of 1Malaysia Development Berhad’s (1MDB) now-aborted deal with PetroSaudi International (PSI) had led to two board members resigning from the Finance Ministry-owned company, investigators have revealed.

    According to The Star today, former 1MDB chairman Datuk Mohd Bakke Salleh and board member Tan Sri Azlan Mohd Zainol quit in protest after US$700 million (RM2.6 billion) that was meant for the 1MDB-PSI joint venture were diverted to another company without the board’s approval.

    Quoting an investigator, the report said the board had directed that the money be returned to the JV company “but no action was taken”.

    Bakke resigned on October 19, 2009, while Azlan left the board earlier this year on January 11, it said.”

    1MDB has been a model of bad governance since the day it started.

    And while the AGC can cover-up locally, the international investigations won’t be deterred.

    Let’s see if they can stay disgustingly arrogant.

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  2. A very simple analogy. You borrow money to buy a house for investment. At the end of the day, you expect it to generate rental income. You may need or need not top up your own money for the loan instalment. But it will still generate rental income and appreciation in asset value in the future. That is called investment. If you do not plan to rent it out, then you must have the means to pay the monthly instalment. This is the duty of the bank to ensure that.

    Now coming to this 1mdb monkey business. Banks have given you loans based on your assets. That’s how for a 1 million business, you could amass 42 billion or even more. Some of the loans had high collateral and government guarantee. It is like your father giving a guarantee to the bank that the taker of the loan will pay or else the guarantor will step in.

    But then, instalments are not paid. Worse you had to borrow more money to pay instalments. And then you decide to sell the house but you still have the bank borrowings plus the money borrowed to pay instalments. So the educated public can call the bluff of 1mdb each time they make an incompetent statement. Are you boys really educated ? I am not sure !

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  3. this is crazy. what is bordering retard is some of the stance of the pro najib. wanting clear cut proof, but at the same time admitting that their is suspicion in the delaying and halting and breaking up of the bodies that are investigating? 1mdb is playing the same old song. their mantra is “repeat a lie again and again until it becomes the truth”. the problem is, certain quarters are repeating the “truth” again and again as a counter measure. kudos to Dr M. he is making sure that we never forget. these half baked answers by half baked morons are disgusting. you claim you are in good shape but to get a floor up, you have to use the elevator. the truth is out.

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  4. Pingback: Mengulas Kenyataan2 Ekoran Titah Majlis Raja2 – ( TPM, 1MDB, AG, BNM ….. eh, di mana PM Najib ? ) | Berita Malaysia

  5. Najib’s campaign slogan of “the era of government knows best is over” has metamorphosed to “the era of government knows nought has begun”.

    He really is Mr CLUELESS. Which is why he needs so MANY highly paid under performing spokesmen.

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  6. They say they have answered Tun Mahathir’s questions 42 times. That simply means their answers are not good enough; otherwise people wouldn’t have to ask repeatedly and 1MDB wouldn’t be giving the same tired recycled non-answers like in this latest “rebuttal”.

    They keep harping about how their assets exceed their debts, yet they have shown us their debts (albeit clouded in vagueness and not at all as clear as they say in this response) but not their vaunted assets. I bet it’s all about the Edra power plants (which they are in the process of selling) and almost-free land given to them by the stupid Ministry of Finance (which they are also in the process of selling or leasing).

    Once these assets have been sold off, what would 1MDB be left with (apart from the substantial interest they still have to service)? Once Edra is sold off, what exactly will be 1MDB’s business and source of income? What was 1MDB’s business model in the first place, anyway?

    Since 1MDB is 100% Government owned, and Government money comes from the People, we the People demand to know!

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  7. An interesting puzzle for you.

    This is 1MDB squirming today:

    1MDB unable to repatriate US$1.83b ordered by Bank Negara
    http://www.malaysiakini.com/news/315238

    “The overseas investments of US$1.83 billion relates to historic equity and murabaha loan investments in a joint venture with PetroSaudi in 2009 – 2011, that was eventually converted in September 2012 into fund units valued at US$2.318 billion.”

    Why does US$1.83b seem such a familiar number?

    BNM was talking about Petrosaudi.

    OK.

    This is 1MDB’s alibi, that it keeps on repeating, from a few months ago:

    “1Malaysia Development Bhd in replying to allegations from former Prime Minister Tun Dr Mahathir Mohamad on its investments in a joint venture with PetroSaudi International (PSI) stated that it had made a gain of US$488mil from the venture.

    The Ministry of Finance (MoF) owned entity said that total investments with PSI between September 2009 and June 2012 amounted to US$1.83bil and it started off as an equity investment and later converted into an Islamic loan that came up to US$2.22bil.

    “In June 2012, the entire USD1.83 billion amount invested by 1MDB in murabaha notes (in the JV with PSI) was repaid, by way of conversion into shares of Petrosaudi Oil Services Limited, for a value of USD2.22 bil,” it said.

    In September 2012, 1MDB sold its shares in PetroSaudi Oil Services Limited for US$2.318 billion and received fund units in a Cayman registered fund.

    The Cayman registered fund is managed by Bridge Partners, a Hong Kong-based fund manager. These fund units were owned by 1MDB via its 100% subsidiary, Brazen Sky, and held through BSI Bank Singapore as custodian.

    On Dr Mahathir’s statement yesterday that 1MDB has not shown any documentary proof of the existence of the money from Cayman Island in BSI, the fund said that “documentary proof” for all the assets of 1MDB, including the fund units and other financial assets of 1MDB, has been presented to the auditors of 1MDB.

    “In addition, “documentary proof” has now been presented to the Auditor-General and Bank Negara Malaysia, the lawful authorities, who we would expect to carefully scrutinise these documents,” it said.

    1MDB also said Bank Negara Malaysia was presently conducting an investigation on it and it was only appropriate to await the outcome of this investigations.”

    See the last para?

    “1MDB also said Bank Negara Malaysia was presently conducting an investigation on it and it was only appropriate to await the outcome of this investigations.”

    Well, we did await, and BNM is saying you are guilty as hell.

    Other have guessed as much already.

    Here is the redoubtable SATD:

    http://satdthinks.blogspot.my/2015/07/just-units-pre-pac-questions-for-arul.html

    But SATD is not the only guy who has shredded 1MDB’s alibi.

    The next few days should be interesting.

    And this is only the tip of the iceberg.

    There is this:
    http://www.stockhut.com.my/news/21310

    And there is the whole issue of the BSI “cash, no – assets, no – units”, in Singapore.

    http://www.themalaymailonline.com/malaysia/article/bank-negara-confirms-told-about-1mdb-bsi-cash-issue-by-singapore

    This came FROM Singapore, not as a reaction to anything done here.

    In Feb, Arul explained BSI like this:

    ““There’s a very sensible and simple reason for that. We are keeping the money in US dollars as we have US$6.5 billion (RM23.06 billion) in bonds out there, in which interest payments come up to nearly US$400 million (RM1.4 billion) a year,” he was quoted saying in the report.”

    Whoops.

    And here’s the PM in “action” in March:

    http://www.thestar.com.my/News/Nation/2015/03/12/PM-1MDB-moved-RM4bil-from-Cayman-Islands-to-Singapore/

    http://www.freemalaysiatoday.com/category/nation/2015/03/19/bank-negara-urged-to-probe-najib-for-money-laundering/

    http://www.theantdaily.com/Main/What-other-regulations-are-1MDB-avoiding-dear-PM

    Very big whoops.

    The only thing that makes sense is that BNM is now saying there was criminality, and they have said it not once but twice to the seemingly deaf A-G.

    I think the pieces will fall together soon enough.

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  8. Pingback: 1MDB’s response to former Deputy Prime Minister is misleading | ajai62

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