1MDB and the shifting of goalposts

There were many instances when 1MDB and the people involved in it were caught shifting the goalpost. When people argued on a particular issue, their immediate response is to argue on a different issue to defend the original matter which was brought up.

This can be seen when Wall Street Journal showed an alleged evidence that billions of ringgit were credited into the Prime Minister’s private accounts, the immediate response to it is, “the PM have never taken 1MDB fund for personal gain“, instead of issuing a more doubt removal reply of “the PM did not receive such money”.

The early signs of trouble within 1MDB can be traced when it requested a second extension to a loan repayment deadline in early 2014. Imagine a company that could not repay loans in the billions on time. This had caused some noise in the banking system.

The people had been writing about it and raised concerns. But the concerns were not heeded. The more prominent opposition members and a few bloggers had been telling the government for months that there is something seriously wrong with how 1MDB operates. Some even highlighted the problems since 2012.

In late 2014, Tun Dr Mahathir began to write a note of concern on 1MDB in his blog.

Yet for the whole of 2014, the government was saying there is nothing wrong with that company; despite the changing of CEOs, the resignation of directors, the change of auditors, the inability to pay loans on time and the acute cashflow problems.

1MDB even had the audacity to seek another extension back in January 2015, and yet nobody in the government bat an eyelid. In February, the CEO of 1MDB began to reassure the public that there is some cash in their bank statements. But matters went up to a whole new level when it was discovered that the MOF had given 1MDB RM950 million of standby credit to alleviate its financial burden.

The goalpost moved again when in May it was discovered that there weren’t any cash as stated in February, but it was actually paper assets. The poor reporting by 1MDB and MOF about its own cash assets had caused the public to question the government in anger.

In the end, the paper assets were classified as units. What exactly are these units, nobody could answer till now, not even 1MDB.

In May, the whole of Malaysia really began to know the existence of 1MDB when it was exposed that Tabung Haji had bought a land from 1MDB at a price hundreds of times more than 1MDB originally had paid for it.

The furore it caused had received a knee-jerk reaction from the top advisor of 1MDB when he ordered Tabung Haji to resell the land immediately. Tabung Haji’s chairman proudly claimed that they can sell the land within a few week’s time to a ready buyer with an astronomical profit of RM5 million.

But until July, the land has yet to be sold.

1MDB began to be bombarded with all sorts of questions regarding its business model. The apparent lack of governance in its business venture, the sheer inability in servicing their loans, the net loss of approximately RM665 million in their financial year 2014 accounts, and the total absence of common sense in piling up massive debts to buy assets which ultimately had to be paid by selling off those same assets.

In the end, MOF announced debt rationalisation plan for 1MDB which made the public even more confused. 

When investigations kickstarted a few months earlier, 1MDB made a promise that they have been cooperating and had given documents to the authorities but recently when the PAC and the auditor general revealed that 1MDB had not been submitting crucial documents, 1MDB could only defend themselves by saying that they will continue cooperating with the auditors.

Never mind the fact that they had wasted a lot of other people’s time.

The public had a shock of their lives when Wall Street Journal began a series of expose into the Prime Minister’s private accounts. If whistleblowers had not exposed these shenanigans, the public would not have known about it. Transparency was not the order of the day. The government only talked about its virtues when matters were made public.

To digress, in the old days, whistleblowers brought forward confidential information to the media in order to expose any wrongdoing so that when it is made public, the government must order an investigation and there will be no cover ups.

The media will protect the identity of the whistleblowers and stand by the stories they publish by staking their reputation, credibility and liability to prove the authenticity of the information they have obtained.

If at anytime the media feel that the information is suspect, they will not publish them as their credibility will be in ruins. Revealing who the whistleblower is will not make the expose any more credible, otherwise nobody will come out to give any information. And no wrongdoings will ever be made public.

The Watergate scandal was an example where the whistleblowers were not revealed until decades later.

Back to the issue at hand, some of the media in Malaysia seems to be in total opposite of what journalism should be doing when it comes to 1MDB.

For instance, when the wife of the Prime Minister was revealed to allegedly have millions of ringgit in her private accounts, some members of the media began to question the documents exposed. Some even went on a wild goose chase of showing the public that the IC number could be wrong or there is no way the account would have been opened in 1984 as the bank did not exist at that time.

WSJ-NAJIBThe issue was laid to rest when her lawyers themselves admitted that the account belongs to her.

Same goes to the issue of the Prime Minister’s private accounts. Instead of trying to figure out the truth, the media went on a rampage of trying to discredit whether the Prime Minister’s accounts did exist.

In the end, after such useless acts of defending the indefensible, the Attorney General himself confirmed what Wall Street Journal had been stating, that the accounts did exist.

People should not fall prey to the shifting of goalposts. Every statement made must be dissected and read between the lines.

Thank you and Selamat Hari Raya Aidilfitri, maaf zahir dan batin.

You might also want to read:

1) Nazri defends Rosmah over RM2 million cash deposits

2) How can a ‘housewife’ earn RM2m in cash?

3) Bila 1MDB Tuduh TheStar Sloppy, Tapi Jawapan Yang DiBeri Lebih Sloppiest!

4) How it will all end

5) Going on leave best of 3 options for Najib, says Musa Hitam

#1mdb, #malaysian-corporate-matters

TNB rescued 1MDB for an undisclosed price

We are very much alarmed that Tenaga Nasional Berhad will get their hands dirty in order to rescue 1MDB.

After exclaiming that TNB will not bail out the debt-infested company, TNB made a U-turn and will buy 1MDB’s stake in the Project 3B after all.

From the news report:

Tenaga Nasional Berhad (TNB) will buy over 1Malaysia Development Berhad (1MDB)’s stake in the Project 3B coal power plant, the Energy, Green Technology and Water Minister Datuk Seri Maximus Ongkili confirmed today.

Ongkili told reporters at the Parliament lobby today that TNB is buying over 1MDB’s 70% in the project, held through the state investor’s energy arm, Edra Global Energy Bhd, for an undisclosed price.

“It’s on a willing-buyer-willing-seller basis,” he said.

The Cabinet approved the move as the power plant project has been delayed by 1MDB, which faced cash flow problems as it sat on a RM42 billion debt.

When the fee is undisclosed then automatically people will assume that there is something to hide. Especially when a day later, TNB’s CEO, Datuk Seri Azman Mohamad had said:

“Based on financial analysis, the project is expected to have a positive impact on the earnings of TNB. It is not a bailout of 1MDB. We wish to stress that no premium will be paid for the acquisition of the 70% stake in the project.”

Is TNB working for 1MDB or for the people?

Is TNB working for 1MDB or for the people?

In the first place, when 1MDB withdrew from the Project in March, the Energy Commission should penalise 1MDB  and re-tender the 70% stake of the project. Or at least, award it directly to TNB without TNB buying over the 70% from 1MDB. That would be the most cost effective solution for TNB and the rakyat.

But since TNB is owned by Khazanah Nasional and its Chairman is also the Top Advisor of the troubled 1MDB, then bail out money need to be given under the pretext of, “no premium will be paid for the acquisition”.

Obviously the desperate seller will be more than willing to sell to the ‘willing’ buyer since both entities ultimately report to the same person.

And these people would want to think that the public will be stupid enough and won’t see TNB paying an undisclosed fee as a bail out.

1MDB had not even pumped any money into the project as it was delayed since October 2014 because 1MDB could not get any financing. Who wants to further finance a company which is unable to make loan repayments without getting help from others?

Therefore, if TNB had really paid millions of ringgit to 1MDB for a project which they had not pumped any money into, then truly this country is governed by idiotic people. Even RM100 million ‘compensation’ will be considered excessive and a bail out. The people has the right to know how much is being paid to 1MDB.

Energy Commission could have made this project continue without TNB’s reputation being tarnished and its cash depleted for bailing out a failed company yet they managed to do it at a more costlier way; just so that 1MDB could pay off some loan interests or overheads.

Will electric tariff be hiked soon because ‘revision is due’? Only time will tell.

You might also want to read:

1) NGO: Cancel 1MDB’s RM11bil project

2) Tangguh Pemilihan 2016 – Usul Wujudkan Jawatan Presiden SeUmur Hidup!

#1mdb, #malaysian-corporate-matters

PAC scolded Umno’s top lawyer over 1MDB

We are very much amused to read that the chairman of PAC, Datuk Nur Jazlan had criticised Tan Sri Shafee Abdullah over his comments regarding Tony Pua, a committee member of PAC yesterday. Shafee was reported as saying:

“I’ve noticed Pua, as a PAC member, has issued a lot of statements which can affect investigations into the company.

“As such, I propose that he withdraw himself from PAC to return the public’s confidence that the inquiry can be conducted fairly and transparently,” Shafee was reported saying.

“PAC members including Pua should be like judges in this case, and not by making accusations and making public statements. It is better they be witnesses if they want to issue such statements.”

Tony Pua is no stranger in questioning 1MDB for its dubious deals but Nur Jazlan however was quick to defend his colleague:

“He doesn’t have the right to tell off PAC members who are members of the legislature, the third branch of the government and elected by the people.”

“I personally think he has helped to highlight the issue on 1MDB which the majority of Malaysians today believe the PAC will dismiss in favour of the government. We are working well as a team.”

“Pua performs a dual role as a MP for PJU and a PAC member. And as far as I am concerned he has not used any information obtained from PAC hearings on 1MDB in his statements.”

“Whatever information he uses in his statements are obtained from parliamentary answers and other sources”.

Basically Nur Jazlan is telling all the fanatical supporters of 1MDB not to poke their noses into PAC’s business in investigating 1MDB. Not only that, he thinks Tony Pua is a great help in highlighting important matters to the public in regards to 1MDB.

Shafee, who received a lot of flak for his involvement in the disastrous ‘Liwat Roadshow’ last February, seemed to think that only Tony Pua is the biased individual. Which is not true.

Tun Mahathir Mohamad gave another insight when he was asked about Shafee’s nosy outburst. He quipped:

“They said Tony Pua is biased, that he is one-sided. But the others are biased too, they are on Umno’s side. So they are all considered biased. So in the end you, you might as well not have (PAC).”

For the record, the members of PAC are:

1. (Chairman) Datuk Nur Jazlan from UMNO

2. (Vice Chairman) Dr Tan Seng Giaw from DAP

3. Dato’ Seri Reezal Merican bin Naina Merican from UMNO

4. Dato’ Abd Aziz bin Sheikh Fadzir from UMNO

5. Datuk Mas Ermieyati binti Samsudin from UMNO

6. Datuk Liang Teck Meng from GERAKAN

7. Datuk Madius Tangau from UPKO (BN)

8. Tuan Haji Hasbi bin Habibollah from PBB (BN)

9. Datuk Wee Jeck Seng from MCA

10. Dato’ Kamarul Baharin bin Abbas from PKR

11. Tuan William Leong Jee Ken from PKR

12. Dato’ Haji Kamarudin bin Jaffar from PAS

13. Tuan Tony Pua Kiam Wee from DAP

Tun Dr Mahathir is wise enough to lend the bigger perspective on the fairness and transparency of the PAC. How confident are we to have a PAC Chairman or members from UMNO sitting in that body when their political career is dependent and beholden to the President of Umno?

How confident are we to have faith in them when their candidacy as member of parliament (and perks) for the next general election is determined by the President of Umno?

And who is the President of Umno? He is also the top boss and advisor of 1MDB!

The conflict of interest is too obvious.

We must be fools to think that these PAC members will, without fear or favour investigate thoroughly their own President while he is controlling their political careers.

That is why, Tun Mahathir had suggested way back in April that this 1MDB fiasco should be investigated by a totally independent commission.

“Berani kerana benar, takut kerana salah”

Trying to outdo each other on who is the better yes-man.

Trying to outdo each other on who is the better yes-man.

After all, an RCI was created in order to investigate the RM12.5 billion PKFZ fiasco. Another RCI was created just to investigate VK Lingam’s “correct, correct, correct” video clip.

But the scandalous RM42 billion 1MDB which triggered a debt crisis is only being investigated by the Umno President’s own underlings? From the start, PAC was even dictated by 1MDB’s bosses on which date they could be interviewed. This flippancy and the charade of it all is too glaring.

The voters are not stupid.

The powers that be can dumb down the brainless 1MDB fans, but not the people who can think for themselves.

Happy Friday everyone.

You might also want to read:

1) Exposing 1MDB’s propaganda

2) Malaysia’s biggest embarrassment

3) Why auditors can’t guarantee there was no fraud at 1MDB

#1mdb, #malaysian-corporate-matters

What people know about 1MDB – PetroSaudi ‘assets’

From around the blogs, there are people who had dig deeper into the dubious agreement 1MDB had made with PetroSaudi back in September 2009.

petrosaudi2After it was exposed that 1MDB had to fork out huge sums of money to PetroSaudi in return for some highly doubtful assets, Petrosaudi by 1MDB’s own admission, indeed did not pay a single sen for the joint venture.

Some even question the assets which PetroSaudi had put down as equity in the joint venture company with 1MDB.

Information gathered from the public domain had pointed out that the assets – the oil exploration rights claimed to be owned by PetroSaudi are shady in nature i.e., they may not belonged to PetroSaudi at all.

Excerpts from article – Rubbishing 1MDB’s Rebuttal by Wenger J. Khairy:

The second issue relates to the investment rationale behind the PetroSaudi Joint Venture.

1MDB claims 1MDB’s contribution was in cash, whereas PetroSaudi’s contribution was in independently valued assets worth US$2.7 billion.

What rubbish! The exploration rights for the block in question – Offshore Block III in Turkmenistan – was given to a subsidiary of Canadian exploration firm Buried Hill Enterprise and not Petrosaudi.

So 1MDB was investing in a company without any real assets, consistent with what Dr Mahathir was saying that PetroSaudi did not pay a single cent!

Note: the writer listed out four issues to rubbish 1MDB’s press statement it made last week and all four are equally damning towards 1MDB.

Another excerpt from – 1MDB Turkmenistan Fact or Fancy by Freddie Kevin:

What exactly does “rights to oil fields” mean?

It is Production Sharing Agreements (PSA) that has true value.

I have searched and never found any reference to Petrosaudi having any interest in the oil and gas industry of Turkmenistan or vice versa.

The US-Turkmenistan Business Council is a Washington, DC based non-profit organization that promotes commercial relations between the United States and Turkmenistan. A publication dated 3/10/2009here does not mention any Saudi based company, onshore or offshore.

Why would or rather why should 1MDB be a party in a joint-venture with Petrosaudi, whose presence in Turkmenistan is doubtful and which Petronas had already made inroads 13 years before?

U.S. Department of State in its Executive Summary on Turkmenistan in 2014 here (Note: the US-Turkmenistan Business Council publication above must have been the U.S. Dept of State Executive Summary 2009) also does not mention any Petrosaudi presence.

By 2014, the offshore PSA had increased to six with Petronas still in the mix,

In addition, there are six PSAs for offshore operations: Block I operated by Petronas of Malaysia; Block II (Cheleken Contractual Territory) operated by Dragon Oil (UAE); Block III operated by Buried Hill (Canada); Blocks 11 and 12 operated jointly by Maersk Oil of Denmark and Wintershall of Germany; Block 23 operated by RWE of Germany; and Block 21 operated by Itera of Russia.

And still no mention of Petrosaudi or Saudi presence.

So what Petrosaudi “rights to oil fields” in Turkmenistan is 1MDB crowing about that is worth USD2.7 billion (together with Argentina) when it seems to be non-existent?

Clearly, this joint venture started with some imaginary assets in 2009 and ended with some assets nicknamed as ‘units’ in the Cayman Islands.

And how did the external auditors labeled these units in the Caymans? They are labeled to be the lowest form of assets called, the “level 3 assets”. They are defined as:

“Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Level 3 assets trade infrequently, as a result there are not many reliable market prices for them. Valuations of these assets are typically based on management assumptions or expectations.”

The scandal that is surrounding 1MDB can never be covered by the people who are busy defending it. The stink emanating from this gigantic pile of debts can be smelled everywhere. It is heartening to see that the only people who still see nothing wrong with 1MDB are people who are paid to defend it, or people who have self-interests in maintaining their own position.

Hence, their methods of defending 1MDB are mostly in the form of character attacks towards its critics. Salleh Said Keruak and his incessant, nonsensical ululation immediately comes to mind.

The Member of Parliament from Raub succinctly put matters into perspective in his article dated 1st June 2015 – Digging Holes and Moving Earth. Here are the excerpts:

There was fraud from the beginning. The JV with Petro Saudi was an act to swindle money from Malaysia. It would appear that people in 1MDB made that fraud possible. That would suggest complicity.

Money was paid into a shell company. Money was transferred into an account belonging to another person. The amount was slightly more than USD1 billion.

The amount made the earth moved under somebody’s feet. From then on, in an attempt to cover up, more financial holes were created that got 1MDB into deeper shit. The earth was indeed moved when more holes were dug.

I hear some accountants say the value of the assets owned by 1MDB is around RM20 billion only and never got close to RM51 billion as claimed. The figures were massaged to make them appear comforting.

The liabilities- loans, bonds, derivative loans amount to RM49billion. If that is so, then, 1MDB is really RM30 billion in the red. The value of its assets if fully liquidated can never cover the loss. In the end, the government will have to bail it out.

1MDB cannot shake off the perception that it’s now insolvent. It claims it has assets but yet cannot repay its loans. How can it service its interests on loans that many amount to RM2 billion a year? Will it able to honour the value of its bonds when they mature?

Clearly, the PM as the final authority over 1MDB’s transactions is panicking. He will not cause this problem to go away by listing out the wrongs created by Mahathir. He should know two wrongs do not make a right.

He is equally liable over what Mahathir did because he was also on the ship that Mahathir commanded. He too made hay while the Mahathir sun shone.

He is not fooling the people any longer. The wrongs created by 1MDB will never be erased even if Jho Low returned the money or if the PM forces GLCs to buy 1MDB’s assets at overpriced values, or sell down 1MDB’s assets. These after the fact measures will never erase wrongdoings, embezzlement, CBTs and all that.

Let’s take an example. When Felda bought over hotels in London by paying an extra RM100 million, that overpayment is not excused by saying- don’t worry, the cost including that extra RM100 million has been recovered as a result of better business. The hotel business is booming and revenue is increasing.

Even if all the cost is recovered, the fact that RM100 million was artificially created clearly with the intention to defraud Felda, the wrongful act, will not go away. Fraud was committed and it’s not erased by later events. If business if good, then it’s fortuitous.

Same as in the case of 1MDB. Fraud, embezzlement, cheating, dishonest dealings are not erased even when all the total costs are recovered.

I hope these people understand all these. Wrongs are not corrected by after the fact fortuitous events and deceptive measures.

It appears that this is what is happening at the very moment. The Arabs which 1MDB paid off to forfeit their option to buy up to 49% of businesses to be listed by 1MDB now becomes the white knight to help 1MDB? The second finance minister has no shame to announce that help has come from this white knight.

Then we urge him to be brave and tell the public the terms and conditions of the help given by the Arabs. Which arm and leg do we give up? The terms and conditions can be expected to be onerous since having paid off the ah long, it seems they are the only financier willing to touch 1MDB which has since become a leper. Surely they will demand more onerous terms since they know that 1MDB has no one else and 1MDB is in distress!

Arul Kanda may have disappeared for a few days running back to his former employers, asking for help while denigrating Najib and the stupid Malaysians at the same time.

Jho Low was probably in town to meet up PM Najib to tell the latter that he is making steps to reimburse the money he has taken. That will allow PM to later declare that he has fully recovered the money that went to Good Star Limited.

You might also want to read:

1) 1MDB money trail
2) 1MDB – background on the JV Co with PetroSaudi
3) PetroSaudi’s US$1.5 billion assets non-existent

#1mdb, #malaysian-corporate-matters

1MDB confirms our suspicions were right

Kudos to 1MDB for replying the questions posed by Tun Dr Mahathir and by the rakyat. They have finally learned to answer the questions by themselves instead of relying on dodgy characters the likes of Salleh Keruak, Shahrir Samad and a myriad collection of cybertroopers with no locus standi to defend 1MDB.

To date, the official spokesperson is Datuk Sri Husni Hanadzlah, although he has gone quiet. Nevertheless 1MDB should be more proactive in answering the questions from now on.

And today, just a day after Tun Mahathir asked 1MDB some questions, they replied in their website on a few pointers.

For the sake of brevity, we shall  first discuss about the first two points from their press release because from the answers given, arose our curiosity to know more about it. And since it is in the interest of the public to be fully informed, we would like to get further clarification from them. Our questions are in the blue font. We tried to make them easy to understand.

1MDB stated:

1. Tun Mahathir claims that “PetroSaudi did not pay a single cent” in a joint venture with 1MDB.

  • PetroSaudi, via a subsidiary company, owned assets, comprising rights to oil fields in Turkmenistan and Argentina, worth approximately USD2.7 billion. These assets were sold by PetroSaudi to another subsidiary, “JV Co”, which at the time of the asset sale, was a company formed by and initially 100% owned by PetroSaudi for the purposes of a proposed joint venture with 1MDB.

1. The main issue here is related party transactions among PetroSaudi’s two subsidiaries, which begs the question, who transferred the assets to who? Was there any profits booked by PetroSaudi prior to passing it to the JV Co?

  • In return for the USD2.7 billion asset transfer, JV Co had to pay PetroSaudi USD700 million. This indebtedness resulted from the asset transfer. Accordingly, there was no loan made or “to settle”.

2. Indebtedness is a position when someone owes another person something, in this case the JV Co owes PetroSaudi USD700 million to transfer the asset, but why was this not included in the valuation of the assets to be injected into the JV Co?

3. What is this USD700 million for? Because USD700M/USD2.7B is only equivalent to 29% of the value of assets being transferred. At this point, this was still a non-cash transaction.

  • On 29 September 2009, 1MDB executed a joint-venture agreement with PetroSaudi. Upon completion of an independent valuation, 1MDB contributed USD1 billion of cash in return for 40% ownership of JV Co, and PetroSaudi was left with a 60% stake in the JV Co. In effect; 1MDB’s contribution was in cash, whereas PetroSaudi’s contribution was in independently valued assets worth USD2.7 billion.

4. This is where the USD1 billion cash from 1MDB came in to get 40% of equity. PetroSaudi with 60% stake and as confirmed by their statement above, PetroSaudi still did not for out any cash at this point of time.

5. Independent valuation of oil fields can be completed within just a few days? Which party verified the valuation to justify the injection of USD1 billion cash? Did 1MDB used their own independent valuer to value those rights to oil fields, or did they just rely on independent valuer hired by PetroSaudi?

  • It was part of the joint-venture agreement that, of the USD1 billion from 1MDB, USD700 million would be used to pay PetroSaudi for the initial asset transfer to JV Co (see above) whereas USD300 million would remain in JV Co. Upon satisfaction with the independent valuation, as per the joint-venture agreement, 1MDB made a payment of USD700 million to a subsidiary of PetroSaudi, and obtained legal title to 40% share of JV Co, a company with independently valued assets worth USD2.7 billion at the time.

6. Referring to 1MDB’s own statement in bullet point number 2 above – “JV Co had to pay PetroSaudi USD700 million”, it is the JV Co who should be paying PetroSaudi as 1MDB had no legal relationship with another subsidiary of PetroSaudi. If another subsidiary held the 40% share of JV Co, then wouldn’t from outset 1MDB is buying equity from another subsidiary of PetroSaudi, instead of injecting into the JV Co as per the JV agreements? Please clarify.

7. What were the business activities of this JV Co and the other subsidiary which justified 1MDB to pump in USD1 billion in cash and subsequently paid USD700 million?

  • Accordingly, PetroSaudi had full rights to the USD 700 million paid by 1MDB and these funds were for PetroSaudi to use, at its discretion.

8. PetroSaudi should have full rights to the USD700 million paid by JV Co, not by 1MDB!

Conclusion: Petrosaudi indeed did not pay a single cent for the JV Co and Tun Mahathir was right after all.

2. Tun Mahathir claims:  “suddenly, USD 300 million of the payment by 1MDB is converted to a Murabaha loan”. He further claimed “We really don’t know where it is”.

  • The joint venture with PetroSaudi was terminated in March 2010, with PetroSaudi assuming 100% ownership of JV Co. 1MDB converted its USD1 billion of equity in JV Co to murabaha notes issued by JV Co, under the terms of a Murabaha Financing Agreement. PetroSaudi, as 100% owner of JV Co, fully guaranteed JV Co’s obligations under the murabaha notes.

9. After just 6 months, this billion dollar business venture was terminated. Why? What were the business activities of this JV Co during time? 

10. So when 1MDB wanted to take their money out of the JV Co, did they not have to sell the equity to PetroSaudi as per the JV Co agreement 1st right of refusal? Under what conditions or mandate of 1MDB that it can lend money (murabaha financing) to a shell JV Co that it tries to get itself out from in the first place? Is 1MDB mandated to be a moneylender?

10. Basically, Petrosaudi group gets USD1 billion cash from loans 1MDB had to borrow, but 1MDB in return gets murabaha notes from the JV Co? Again, this begs the question, what business activities is this JV Co involved in to justify giving them loans instead of getting back the money?  

  • 1MDB then made further investments of USD500 million and USD330 million in additional murabaha notes issued by JV Co.

11. After termination of the business venture, why did 1MDB give more cash loans to the JV Co in return for the murabaha notes? What kind of investments is this JV Co involved in?

  • In total, 1MDB invested USD1.83 billion cash in murabaha notes issued by JV Co, a company that, by then, was 100% owned by PetroSaudi following the termination of the joint venture in March 2010.

12. USD1.83 billion or approximately RM5.8 billion was invested in that JV Co. From the period of March 2010 to June 2012, what did this JV Co do with the cash they were given/loaned to? Why should 1MDB gets murabaha notes in return?  

  • In June 2012, the entire USD1.83 billion amount invested by 1MDB in murabaha notes was repaid, by way of conversion into shares of Petrosaudi Oil Services Limited, for a value of USD2.22 billion.

13. What does this PetroSaudi Oil Services Limited (PetroSaudi OSL) do? How much % equity 1MDB now holds in PetroSaudi OSL? Is it a shell company too? Now the USD1.83 billion is revalued on paper to be USD2.22 billion, but is it legit?

14. Who was the third party valuer of this shares? Is it really worth USD2.22 billion or was it just an agreed amount decided between 1MDB and PetroSaudi OSL?

Up to this point the USD1.83 billion which 1MDB should get in cash as repayment, have been converted into shares instead. The cash of USD1 billion, USD500 million and USD330 million initially given to Petrosaudi group were now in the form of  share certificates of PetroSaudi OSL. 1MDB confirmed this in their point above.

15. From size perspective, this is a very large investment, what was the investment objective of 1MDB to accept the “conversion” into shares? Did 1MDB appoint any BOD member into PetroSaudi OSL?

16. PetroSaudi OSL was created in 2009. Was it a profitable firm? If it was profitable, why the need to sell it back in September 2012 as stated below?

  • In September 2012, 1MDB sold its shares in PetroSaudi Oil Services Limited for USD2.318 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.

17. After just 4 months holding the shares, they now sold it? What kind of business musical chair of shares were they doing? Suddenly just after 4 months, the shares were revalued upwards to USD2.318 billion and kept by a subsidiary of 1MDB called Brazen Sky. Up to this point, people have got to ask, what kind of real business have 1MDB and PetroSaudi were doing up to that point of time?

18. How long has this Cayman fund been launched? Is this a closed investment scheme, is it a hedge fund, what is the historical returns and the liquidity of these funds?

19. Why did 1MDB accept the settlement in the form of units instead of units presumably originating from PetroSaudi assets? Did 1MDB not get back to square one when they wanted to get out of the JV Co holding some “assets valued up to USD2.7 billion”?

20. Is this the same assets as the first USD2.7 billion that they got themselves into in the first place? Can you, 1MDB share with us the portfolio report from BSI Bank on the marked to market value of the fund, its returns if any and what ever terms and condition attached to 1MDB liquidating them?

Now we hear that the balance of these units are to be sold back to PetroSaudi in return of providing the USD1 billion by June 4th. Does this imply that these units are worthless to the open market and only PetroSaudi will buy them? 

  • Accordingly, 1MDB invested a total of USD1.83 billion with PetroSaudi (initially as equity, then as murabaha notes), and ultimately owned USD2.318 billion of fund units i.e. a gain over time of USD488 million.

21. You put in USD1.83 billion of cash and had to pay interests on loans for it, in return you are proud to get a paper profit of USD488 million?

22. If you managed to get out of the JV Co in the first place you would not need to go out and borrow that much in order to purchase the IPPs or the lands, tell us what is your cost of fund (inclusive of fees paid to all) vs the actual return on these investments?

  • The facts detailed above can be verified by reference to the notes to the audited financial statements of 1MDB dated 31.03.2010, 31.03.2011, 31.03.2012, 31.03.2013 and 31.03.2014.

23. 1MDB’s auditor, Deloitte stated that all these “investment held for sale”, including its shares in the Caymans, as Level 3 – the lowest of three levels of assets in the fair value accounting hierarchy.

24. To add, regarding another investment 1MDB made – the 1MDB GIL, after X number of years of not getting your money back from PetroSaudi, you then agreed to invest further into another JV Co with PetroSaudi, can you also share with us the “Investments” made by 1MDB GIL, and are these investments involves buying PetroSaudi “assets” again? (errata: This question is supposed to be regarding the Aabar/IPIC investments, which we may discuss in the future. 1MDB is indeed a confusing ball of mess. Apologies.)

Conclusion: Tun Mahathir was wrong on the figure, it was not USD3oo million but in actual fact it is USD1.83 billion! And we do not know where the cash has gone to after getting units in return.

1MDB are just using wordplay to counter the questions with answers that didn’t really answer the question. In fact, their replies created even more questions!

The rest of their points stressed on semantics, not substance. Wordplay like – Ananda Krishnan did not give RM2 billion to pay interests as Tun Mahathir had claimed, but to pay loan to lenders. Same difference.

Also, Tun Mahathir said the interests come about to almost RM3 billion and they answered with, “the figures being quoted by Tun Mahathir are incorrect. To be clear; the interest cost on RM42 billion of debt by 1MDB as of 31.03.2014 was RM2.4 billion. The person written this must be a joker.

Then they said, Goldman Sachs was not the one raising the sukuk bonds but it was AmBank when all sundry know Goldman Sach is involved in another fund raising venture for 1MDB. Same difference.

Again, they stressed on form instead of substance when they corrected the figure of RM320 million of land purchase to RM230 million. They just corrected the figure but failed to answer the question.

These are all diversions in order to say that they have answered all questions when in fact, they have not. Hopefully 1MDB can clarify the questions above.

Thank you.

You might also want to read:

1) On IPP – http://dinturtle.blogspot.com/2015/06/hot-1mdb-mengaku-ipp-dibeli-hampir.html

2) On the USD1 billion money trail – http://www.themalaysianinsider.com/malaysia/article/1mdbs-first-us1billion-money-trail

3) On PM Najib’s FAQ – http://ffrreeddiiee.blogspot.com/2015/06/1mdb-dato-seri-najibs-fqa-frequently.html

#1mdb, #malaysian-corporate-matters

Perihal Proton dan kayu hulu kapak

Kita mulakan minggu ini dengan penulisan dari Ku Seman Ku Hussein yang disiarkan oleh Mingguan Malaysia semalam. Catatan yang membawa seribu satu makna. Semoga menjadi pengajaran.

Alkisah kayu hulu kapak, nasihat Cikgu dan Proton


Saya memulakan catatan hari ini dengan ucapan syabas dan tahniah kepada Proton kerana diberi “publisiti” besar-besaran selama tiga hari berturut-turut oleh TV3 baru-baru ini. Bukan mudah untuk mendapat peluang “keemasan” begitu. Sebenarnya dengan rating TV3 tertinggi, “iklan percuma” pada waktu perdana yang diberikan itu terlalu tinggi nilainya. Nasib baik TV3 memberikan secara percuma. Kita wajar menyanjung sikap pemurah yang ditunjukkan itu.

Kita juga wajar berbangga kerana stesen televisyen ini berjiwa rakyat dan mendengar “rintihan” pemilik-pemilik teksi yang mengadu kualiti kereta Proton terlalu rendah. Pemilik teksi dikira bernasib baik kerana mempunyai TV3 yang mengutamakan keluhan mereka walaupun kereta Proton dijadikan teksi sudah hampir tiga dekad lalu.

Janganlah ditanya kenapa dan mengapa rintihan itu dilayan ketika ini. Elok sangatlah media tempatan seperti TV3 memberikan “iklan percuma” kepada khazanah negara seperti Proton ini. Kalau hendak diharapkan media Barat seperti The New York Times atau The Washington Post, tidak adalah nampaknya. Lagi pun jangan percaya sangat dengan media Barat kerana mereka lebih cenderung untuk meruntuhkan daripada melestarikan yang sudah ada.Proton bagi kita adalah sebatang pokok yang bertaraf balak.

Mengambil masa berpuluh tahun untuk matang, tegap dan teguh menahan ribut dan taufan. Kalau dulu orang Melayu dihina oleh penjajah kerana tidak mampu membuat jarum, tetapi sejak tiga dekad lalu, kita sudah boleh membuat kereta. Proton dan beberapa lagi yang menjadi mercu tanda kecemerlangan dan legasi bangsa adalah sebatang balak yang mengambil masa lama untuk berada seperti yang kita lihat sekarang.

Bercakap tentang pokok balak, ingatan saya pantas melayang ke kampung halaman ketika mula-mula menjadi wartawan di Utusan Melayu 30 tahun lalu. Di kampung ada seorang tua, guru pencen yang terus kekal dengan panggilan hormat “Cikgu” dalam kalangan orang kampung. Cikgu pencen ini seorang pembaca setia akhbar Utusan Melayu bertulisan Jawi.

Dia sangat berbangga apabila saya bekerja di Utusan Melayu sebab dia kagum kepada tokoh wartawan, Ishak Haji Muhammad (Pak Sako). Dia terkedu apabila saya memberitahu bekerja satu pejabat dengan Pak Sako. Dia kata, kalau Pak Sako menyertai UMNO, sudah lama Pak Sako menjadi menteri. Entahlah, saya tidak tahu cerita ini tetapi Pak Sako memang hebat, antara anak Melayu awal pernah jadi majistret zaman penjajah Inggeris.

Suatu hari apabila saya bercuti di kampung, Cikgu datang ke rumah dan berbual panjang di tepi sawah tentang hal ehwal di Kuala Lumpur. Dia kelihatan ternganga apabila saya menceritakan tentang operasi di Jabatan Pengarang Utusan Melayu yang bingit dengan bunyi mesin taip. Cikgu banyak memberi nasihat kepada saya, antara yang saya tidak lupa ialah jangan sama sekali menjadi kayu hulu kapak.

Ketika itu saya tidak faham sangat dengan kiasan-kiasan. Pening memikirkan kayu hulu kapak. Puas mencari maksud tersurat dan tersirat. Kata Cikgu, kayu hulu kapak itu dikiaskan kepada orang yang menjadi pengkhianat. Cikgu menghuraikan, hulu kapak itu diperbuat daripada kayu yang asalnya sebatang balak. Kemudian dibuat hulu tempat memegang untuk digunakan bagi menebang pohon yang “sebangsa” dengannya.

Dalam lain perkataan, kiasan kayu hulu kapak ialah orang yang dipergunakan oleh pihak lain untuk menumbangkan legasi atau khazanah milik bangsanya sendiri. Ini adalah gambaran orang yang hilang maruah dan integriti kerana sanggup menjadi alat untuk menghancurkan sesuatu yang menjadi milik bangsa.

Saya agak terkilan kerana ketika itu tidak mengambil endah sangat dengan nasihat orang tua-tua. Pernah sekali itu Cikgu memberi amaran kepada saya, katanya, “Aku tak mau dengar hang jadi wartawan kayu hulu kapak, dipergunakan untuk meruntuhkan bangsa,”.

Saya terkedu. Sampai hati Cikgu kata saya “wartawan kayu hulu kapak”. Tetapi setelah lama bergelumang dalam dunia wartawan, melihat warna peribadi pelbagai manusia termasuk yang menjadi sesumpah dan rama-rama, barulah saya sedar nasihat Cikgu sebenarnya sangat berharga.Saya bertemu dengan banyak manusia seperti hulu kapak, mereka dipergunakan untuk menumbangkan pohon bangsanya sendiri kerana mengejar habuan dan kedudukan. Mereka melakukan tanpa sedikit pun rasa bersalah.

Oleh kerana Proton diumpamakan sebatang balak yang sudah mempunyai teras, janganlah pula ada manusia yang berperangai seperti kayu hulu kapak yang dipergunakan untuk menebang legasi kebanggaan bangsa itu. Saya percaya tidak ada. Kalau ada, itu tandanya nilai integriti dan maruah mereka lebih rendah daripada sekeping roti yang basi.

Baca selanjutnya di sini.


All of us are perplexed by Arul Kanda and 1MDB



From The Star today:

Nazir Razak questions delay of 1MDB annual audit

PETALING JAYA: The delay of an audit for Government investment arm 1Malaysia Development Berhad’s (1MDB) financial year which ended in March this year is “perplexing” to CIMB chairman Nazir Tun Razak (pic).

“I am perplexed why your March 2015 audit has not even started? How is this allowed? Has standards of GLC governance dropped so low?” Nazir said in an Instagram post on Thursday night, accompanied by a graphic with the 1MDB logo.

On June 10, Public Accounts Committee (PAC) chairman Datuk Nur Jazlan Mohamed revealed that 1MDB’s financial year accounts, which ended in March this year, had yet to be audited.

Nazir, who is also the younger brother of Prime Minister Datuk Seri Najib Tun Razak, has been critical of 1MDB in the past, and had criticised 1MDB’s president and group executive director Arul Kanda Kandasamy as well as former CEO Datuk Shahrol Azral Ibrahim Halmi for not attending a PAC inquiry.

In fact, Nazir Razak may not only criticising Arul Kanda, he could also be criticising the Prime Minister cum-Finance Minister slash Advisor of 1MDB for not giving the green light for Deloitte to start auditing 1MDB.  It was reported yesterday:

The PAC found out at yesterday’s meeting that Putrajaya has yet to direct Deloitte to audit 1MDB’s accounts for the current financial year despite growing concerns over the state investor’s financial health.

In reiterating the need for 1MDB’s latest accounts to be audited quickly, Nur Jazlan said until the financials are completed and audited, it would be a hindrance to their ongoing investigation into the firm.

Is somebody still cooking something in the kitchen? Why hasn’t the audit started yet? It is impossible that the management accounts are not yet ready to be audited. It’s mid-June already. Are the employees in the accounts department of 1MDB on sabbatical leave since last Hari Raya?

Why is the Prime Minister actively withholding a proper governance procedure?

Tony Pua was also perplexed by what by the  self-confessed ‘professional’, Arul Kanda had to say about all this. The so called professional have made a reply to Tony on why the external audit has not yet started but that exposes the CEO to further embarrassment because it seems, Arul Kanda had missed the point.

The MP rebuked and chastised the under sieged CEO of 1MDB by giving him a lesson in logical thinking:

Arul Kanda’s denials about audit miss the point

KUALA LUMPUR: Petaling Jaya Utara MP Tony Pua, while commending Arul Kanda Kandasamy for his quick response, pointed out that the 1MDB Chief has completely missed the point that he was making on Deloitte Malaysia not being able to commence audit work on the company for the last financial year.

“His denial does not explain anything,” said Pua who is also DAP National Publicity Secretary. “Arul Kanda’s commendably immediate denial misses the point and was an attempted misdirection.”

“He should stop giving excuses and give his assurance to Malaysians that the statutory financial audit for the scandal-ridden 1MDB for the 31 March 2015 financial year-end will be completed by 30 September 2015 as required by law.

Arul Kanda in his denial, he lamented, said “the board and management of 1MDB met Deloitte as early as February 2015 to discuss commencement of an audit after the financial year-end of 31 March 2015.”

“We want to know about the controversial assets held in various overseas banks. We want to know what was the true debt situation in 1MDB and the extent of the company’s cash flow problems.”

Unfortunately, he said, “what we didn’t get from Arul Kanda was when the audit will actually commence. More worryingly, we would like to ask the President of 1MDB, why is it that since the discussion more than three months ago, the audit for 1MDB has not commenced.”

Arul Kanda claimed that “the audit of a major 1MDB subsidiary, Edra Global Energy Bhd, has already commenced and was well under way”, noted Pua.

“I asked about ‘the holding company, 1MDB, where all the controversy over its funds, cash flow problems and alleged misappropriations lie, but Arul Kanda tells us that the audit has commenced on its subsidiary.”

The commencement of audit work on Edra isn’t at all surprising, he added. “It was expected because the company was preparing for their initial public offering.”

Arul Kanda, Pua further noted, separately highlighted the fact that “1MDB is currently undergoing a thorough review and investigation of its accounts by the National Audit Department.”

“Let me state that the fact that the Auditor-General (A-G) was reviewing the past financial statements of 1MDB does not in any way justify the fact that the statutory audit for 1MDB has not commenced,” said Pua. “These are two different and independent processes which surely a multi-billion ringgit public-interest company cannot afford to neglect.”

In fact, he said, given that there was a parallel on-going A-G review, Deloitte should be invited to commence their audit earlier so as to provide the auditors with a longer lead-time to complete the report.

Arul Kanda have managed to make even Tony Pua sound smarter. And that is the quality we have among the people who are supposed to handle 1MDB.

Intelligent people will instantly know that if an audit has not yet started, then it has not yet started. There is no need to go around in a roundabout just to say something has started when clearly it hasn’t.

In normal audit practice, management accounts of all subsidiaries should have already been consolidated in the management accounts of the holding company by end of financial year. External auditors should have by now, sit in the audit room prepared by 1MDB HQ office and commence the audit (whether executing the ‘stat audit’ – a jargon for checking the legal corporate documents, or other preparatory process).

Again, it is the middle of June now. Their financial year ended 2.5 months ago. If they have to wait for the Edra Global Energy to be audited and the audit report to be signed, then there won’t be enough time for 1MDB’s audit report to be completed and signed to meet its September dateline. Arul Kanda was just saying something that does not make sense.

Only the most ignorant among us would believe his press statement.

From all the news above, it is without any doubt that not only 1MDB have failed in its corporate governance, it also gives so many excuses and idiotic responses, it is not presumptuous to say that there is a deliberate attempt to cover up wrong doings.

And to answer Nazir Razak’s ultimate question, the ultimate answer is, yes it has.

Today, Tun Dr Mahathir wrote his latest blogpost which summarises the history of 1MDB and its stupid business deals. We assume there will be another round of Falsely Answered Questions (FAQ) which will not answer anything. Get ready.

You might also want to read:




#1mdb, #malaysian-corporate-matters

Congratulations Arul Kanda, you are now a politician!

We are so amused with Arul Kanda, the CEO of the troubled 1MDB.

FOUR months after telling his first lie to the public, finally he released a press statement to clear the air about that profound gibberish he uttered in February.

How un-professional indeed. This should have been cleared immediately after he said it. But he did not. Surely the people handling the 1MDB account would have alerted their own CEO that the money in BSI Singapore was not in the form of cash.

Unfortunately, we are dealing with people devoid of honesty. That was why, there was a comical flip flopping and desperate cover-up by the people involved ever since then.

After so much brouhaha by the public over their contradictory parliamentary replies, Arul Kanda still did not squeak a word about the piece of fiction he told in February. This belated press statement only came about after Tun Mahathir called him a liar straight to his un-professional face two days ago.

And judging from the poorly written press statement, Tun Mahathir was right after all.

1MDB CEO assuring (lying to) the public the cash is there

1MDB CEO assuring (lying to) the public the ‘cash’ is there

Normal people would instantly know whether they are telling a lie, or not. It seems Arul Kanda is not even sure whether what he said was either one of them. In his statement, he did not acknowledge, admit or be accountable to the lie he made in February. Instead, he just jumped to the Ministry of Finance’s amended replies in May.

He wanted people to forget that the main argument here is the fact that he LIED way before Ministry of Finance made the amendment. Even the Prime Minister colluded with his lie during the premier’s parliamentary response in March.

This is a devious way of wiggling yourself out from admitting that you are just a two-bit errand boy unfit to call yourself a professional or a banker.

Even a rookie auditor or a junior bank executive will not make such a fundamental mistake in not knowing the kind of assets you have in your accounts. There is a vast difference between cash, paper assets and units.

Is he really a banker? (Actually he is a lawyer by training).

And Tun Mahathir was right. This kind of people, with this kind of stupid press statement cannot be trusted.

Surely, when you said something which is not true, it is a lie.

Well, we the laymen call it a lie.

Again, instead of telling us whether he indeed has lied, he asked the authorities to verify whether or not he has lied!

What kind of nonsense are we getting from these so called professionals?!

Let’s put this in perspective. Arul Kanda told us that an apple he has in his pocket is a green apple. A month later, the Prime Minister confirmed it is green. Two months later, the Prime Minister told us, Arul Kanda lied, it is not green, it’s red. However, another Finance Minister then clarified that it is not actually a red apple, but in fact a citrus fruit. What kind of citrus fruit? He doesn’t know. It’s just a citrus fruit.

#Facepalm gif

#Facepalm gif

Only stupid people will still think that everyone stated in the paragraph above are a bunch professionals.

Isn’t it absurd that Arul Kanda now wants Auditor General, Bank Negara Malaysia and PAC to verify what kind of ‘fruit’ he has in his own pocket?!

Doesn’t he know? No he does not want to answer this because he is not an honest person. A professional would be an honest person. Arul Kanda is neither.

An honest professional will immediately recognise that a mistake was made, quickly issue a statement that he is wrong, made the right rectification and apologise for the lie. All this should be executed within 24 to 48 hours. Only then people can trust him.

What’s worse, Arul Kanda spun it as a ‘miscommunication’ and ‘confusion’. Confused over what you have in your own accounts? It seems now he is also incompetent!

Compounded to the fact that no rectification was made, a Prime Minister who was relying on him to give the right information on 1MDB, was turned into an idiot for giving a false answer in Parliament. This is all due to an incompetent CEO.

But the best part of his press statement is when he launched himself to argue over semantics and the pedantic. Now he is arguing that Tun Mahathir is shifting his allegations from ‘RM42 billion is missing’ to ‘where the RM42 billion went is questionable’.

They are the same argument! RM42 billion is missing, where did they all go? It seems the appropriation of this RM42 billion debts are questionable!

If you can be perplexed just because of this, we doubt you are even fit to be an errand boy. 

Is 1MDB being overrun by brainless people who split hairs over English words?

The only logical thing how this stupid line of defence could come about is because he does not know how to answer all the questions posted in Tun Mahathir’s latest blog post.

Again, he is hiding behind the ‘wait for the AG report’ mantra popularised by the Prime Minister. No answers is forthcoming. It is amazing that after all this, he still have the cheek to say that he will conduct his duties in a professional manner.

These are all diversion and prevarication.

Congratulations Arul Kanda, you can now call yourself a sneaky politician!

Below is Arul Kanda’s press statement taken from 1MDB’s website.

1MDB: Clarification and Accountability

“In reference to a blog posted yesterday by Tun Dr Mahathir Mohamad, I wish to make clear that my role at 1MDB has been and will continue to be as a professional. I was initially appointed to conduct a strategic review of the company, and am now leading the implementation of a rationalisation plan for the business, as presented to Cabinet on 29 May 2015.

As a professional, I am fully accountable for my actions and am answerable to the 1MDB Board, and our shareholder the Ministry of Finance. In the current context, this also includes the Auditor General, Bank Negara Malaysia and the Public Accounts Committee. These are the lawful authorities to verify whether or not I have ever lied, as has been claimed, as they have access to all information. I shall continue to conduct my duties in a professional manner, and furnish all information to assist the lawful authorities to verify the truth about 1MDB.

Tun Mahathir stated in his blog that a Parliamentary response submitted by the Ministry of Finance was subsequently amended. This has been previously acknowledged by the Ministry of Finance, and occurred due to confusion around some information provided by 1MDB. As the President of the company, I take full responsibility for this misunderstanding, and will ensure better communication with all stakeholders. Furthermore, as clarified by the MOF, appropriate steps have already been implemented to prevent this happening again in the future.

Separately, Tun Mahathir has previously claimed that RM42 Billion is missing. Now, after 1MDB provided a summary of how the RM42 billion was spent – based on past audited financial statements, he has stated in his blog post “where a chunk of the 42 billion ringgit went is questionable.” This continuous shift in numbers and allegations is perplexing.

With regard to other questions posed by Tun Mahathir and various commentators, the Prime Minister has said, “a full accounting of the facts by lawful authorities are needed so that there can be no misinterpretation or spin”. In this context, the Prime Minister has affirmed that “if any wrongdoing is proven, the law should be enforced without exception”. This is a position I fully support, both in relation to my own conduct to date, and that of 1MDB more generally.

I reiterate that the 1MDB team is fully committed in its efforts to implement the rationalisation plan presented to Cabinet. This plan will substantially reduce the company’s debt levels, and is well underway, as proven by the repayment of an RM 3.6 billion loan as announced on Monday 8 June.”

– Arul Kanda, President & Group Executive Director

 You might also want to read:



#1mdb, #malaysian-corporate-matters

IPIC – The RM3.6 billion payment for 1MDB dummies

This morning there was a pandemonium on how 1MDB managed to repay its USD975 million (RM3.6 billion) loan to its bankers. Lucky bankers.

And of course, the loudest noise will come from politicians who are overjoyed to see that 1MDB could repay its loans. These people will ignore the obvious fact that 1MDB actually managed to repay those bankers just because it received a ‘not a loan, not a bail out’ payment from International Petroleum Investment Company (IPIC) last week.

1MDB, the financial merry go round

Arul Kanda still have not retracted and apologise for the lie he told in February

For the uninitiated, here is the simplified description on what this USD975 million loan payment is all about.

Sometime in September 2014, 1MDB acquired a USD975 million loan from a consortium of banks which was then guaranteed by Malaysian government and secured using the USD1.103 billion worth of units it has in the BSI Bank in Singapore.

This USD975 million loan was then used to pay Aabar Investments (subsidiary of IPIC) for an early termination of a 10-year old financial options.

It is unclear from where this USD1.103 billion worth of units came from. These units are said to be held custody by a special purpose vehicle called Brazen Sky, registered in the Cayman Islands.

Now, back in February 2015 the CEO of 1MDB mentioned that this USD1.103 billion in BSI Bank is in the form of cash. This is an expected response, generally to appease its lenders.

The Prime Minister confirmed it was indeed cash during his parliamentary reply on March 10th 2015.

But in late April, news report from Singapore’s Business Times stated that there is some discrepancy in 1MDB’s bank account in BSI Bank.

This raised an alarm among the consortium of banks in early May and they planned to ask 1MDB to settle their loan ahead of the repayment deadline in September 2015. The banks have the right to do this if they suspect its client has no capability to repay the loan.

Unfortunately their suspicion and the discrepancy is confirmed to be true when on the 19th May 2015 the Prime Minister announced that the money parked in Singapore is not in cash, but in paper assets; of which a few days later the Ministry of Finance eventually amended it to be in units.

There was no cash after all. The banks will not accept worthless documents called ‘units’ as collateral for their loan.

Panic strikes and on 29th May 2015, the Ministry of Finance announced a ‘rationalisation exercise’ where IPIC/Aabar will give payment of USD1 billion (RM3.6 billion) to 1MDB to help it repay the banks by 4th June 2015.

Basically, money from the banks given to Aabar in September 2014, is returned to the bank in June 2015. This business model is often called – ‘the unnecessary stupidity’.

On top of it all, the ‘units’ are supposed to be ‘profits’ from an investment made by 1MDB which was terminated in 2012. But the profits was redeemed not in the form of cash, but substituted with assets/units mutually agreed to be worth USD1.103 billion.

If indeed there is real value in those units, 1MDB should just cash them out in August to meet its deadline in September, or if 1MDB is really strapped for cash, all it has to do is just wait till after the September deadline and the consortium of banks will just take ownership of those units.

But this is not to be.

What is more absurd, to sweeten the deal of getting their own money back from IPIC/Aabar, the Finance Ministry also announced that the RM3.6 billion payment will be part of a larger strategy to lessen a RM16 billion 1MDB debt; in other words, IPIC/Aabar will get financial assets of 1MDB.

It is uncertain what these assets are although the only known valuable assets 1MDB has are the lands in TRX and Bandar Malaysia which were originally reserved for bumiputra development.

So in the end, the bankers get their money back, with some interests; Aabar gets USD975 million cash last September and from now on, some of 1MDB’s assets, including those redundant units. And 1MDB gets to lose some of our prized assets.

Since 1MDB is getting compliments for this whole financial absurdity, maybe we should congratulate all involved with a pat on the back. 

Well done, 1MDB.

Your zero governance strategy will be made an example among financial journals and research papers in years to come.

So there you go, the simplified summary of what had happened. Should there be any other versions, please do not hesitate to state your own simplified description on what really happened. 

Thank you.

News source:







#1mdb, #malaysian-corporate-matters

An Acting Prime Minister should lead the 1MDB investigation

1MDB has become a thorn in the Malaysian economy. When a company with a paid up capital of RM1 million have unnecessarily accumulated debts up to RM42 billion within the space of 5 years, the pressure it puts on the economy is felt everywhere.

This is confirmed by the Finance Minister II on 25th May when he said 1MDB is in a dire need to be restructured as any failure to pay its massive debt will pose systemic risks to the country.

He confirmed this again in a TV interview on 3rd June by saying that if 1MDB is allowed to continue operations without any rationalisation, they will default their loans and the country’s credit ratings will be downgraded.

Thus far, nobody from 1MDB has admitted that they have made a mistake in wasting billions of taxpayers money to pay needless bank interests on the loans they acquired.

Nor have the Finance Minister resigned from his post in the wake of this huge financial scandal. Everyone with a clear mind is asking, why delve into a dubious business model where investments are financed by debts and profits are used to pay loan interests?

On top of that, the Prime Minister had no gumption to sack the 1MDB board or at least suspend them as soon when the Auditor General and the PAC started their investigations.

Will he do the right thing?

Will he do the right thing?

This is due to the fact that should he ask for their resignation, in principle he must also resign from his other posts since the buck stops with him by virtue of being the Chairman of 1MDB’s Board of Advisors, the Finance Minister in charge of 1MDB as well as the Prime Minister in charge of the investigative agencies.

As soon as he announced that 1MDB will be investigated for any wrongdoings, many of his sycophants heap praises and peddled him as being sincere, transparent and a Prime Minister with nothing to hide.

But such gesture is meaningless if he still hold all the vested powers and sits supreme above these investigative agencies. It was him who ordered the AG to inspect the accounts. It was also him who ordered the PAC to investigate 1MDB.

And they will submit their reports to him. The perception is, there is no independence.

For instance, in many other companies, should any top personnel is suspected to be involved in a major corporate scandal, he or she will automatically be handed a suspension letter pending a domestic inquiry.

This is compulsory in order to avoid any misuse of power to cover up any evidence or an opportunity for the accused to rectify or erase any damning documents while investigation is in progress.

In the case of our Prime Minister, the sycophants see no need for him to step aside all his positions and are more than willing to wait for the reports.

Worse, the cabinet members see nothing wrong with him giving orders and supervising the restructuring of 1MDB while he himself is the subject of the 1MDB scandal.

This is not surprising since most members of the cabinet are career politicians with little knowledge and experience from the real working world. Of course, corporate governance and accountability is perhaps an alien concept which they are unable to grasp.

On 25th May, there was a standoff between Umno leaders and the Prime Minister, where the former were asking the Prime Minister to sack the entire board of 1MDB. But the Prime Minister did not comply as he has neither the gumption to do it, nor the honour to do the right thing.

What the cabinet ministers should have proposed is to tell the Prime Minister to temporarily resign from all positions (except the Umno presidency) and vote for the appointment of an acting Prime Minister to oversee the investigation of 1MDB.

This is the most appropriate thing to do.

A RM42 billion scandal is not something trivial, especially when due to this misadventure, the bumiputras could lose their crown jewels (the TRX and Bandar Malaysia lands) to private sectors or foreigners.

If indeed the Prime Minister is sincere and transparent, he should step aside and let the investigations of 1MDB run without any fear or favour. However, he had missed the opportunity to do so and everything that he, the Finance Ministry and 1MDB have done since the start of the investigation will be seen as a cover up.

An investigation of any kind will not fare well on a Prime Minister that controls all the authority and financial powers. Even the PAC Chairman agrees to this where he opined that the Auditor General should be independent from the Ministry of Finance.

The existence of an Acting Prime Minister is not something new as there were many precedents that have been set thoughout history. Datuk Seri Anwar Ibrahim was appointed the Acting Prime Minister in 1997 when the Prime Minister took a two-month holiday.

Tun Abdul Razak was practically the Prime Minister in the aftermath of the May 13th, 1969 racial riots, executing tasks Tunku Abdul Rahman could not do.

In this case, if the Prime Minister is cleared from any wrongdoings in his capacity as the Finance Minister or the Advisor of 1MDB, he can then resume his job.

Afterall, it is just a job. All we want is real transparency, not just the false impression of transparency and a cover-up masquerading as good governance.

#1mdb, #malaysian-corporate-matters

#Nothing2Hide, the #SabahEarthQuake and the #SabahHeroes

7 June 2015.

Amidst the furore of his non-attendance to his own event last Friday, and also shadowed by the earthquake tragedy that have befallen Sabah yesterday, the Prime Minister and his cabinet ministers sped off to meet each other in Saudi Arabia.

The earthquake which had caused several people to lose their lives in Sabah did not cause the Defence Minister and the Home Minister to return home immediately, not at least until Sunday evening the soonest.

According to news reports, both Datuk Seri Hishamuddin Hussein and Datuk Seri Zahid Hamidi have been in Saudi Arabia for the past couple of days and could also perform a short umrah with the Prime Minister.

When in Saudi Arabia, the Prime Minister will be visiting the Saudi King, Salman Abdul Aziz Al Saud for an audience.

Also mentioned in the itinerary is the visit to the Makkah Metro depot Al Mashaaer Al Mugaddasah on Sunday. A Malaysian company, Prasarana Malaysia Berhad has been appointed to become its shadow operator after having first won the contract in November 2014.

The Finance Minister II Dato Seri Husni Hanadzlah had stated in an interview last Wednesday that the contract was won due to the strategic partnership between 1MDB and PetroSaudi International. The joint venture incidentally, ended in 2012.

However, the former CEO of Prasarana whom had led the venture to obtain the Makkah Metro contract, denied that the PetroSaudi – 1MDB partnership had helped Prasarana into getting the contract.

This is not surprising, since Malaysian companies have won projects in Saudi Arabia for decades, before the existence of 1MDB and PetroSaudi.

With his political career at stake, boosting an already discredited 1MDB’s image is a priority for the much maligned Prime Minister.

Meanwhile, the latest death toll in the Sabah earthquake reached 19 people as the search and rescue continues on Mount Kinabalu. The latest body to be recovered is of a 12 year old pupil from Singapore.

Many citizens and politicians expressed concerns and sympathies to the tragedy as the state government is working overtime to find the remaining missing persons. Several mountain guides are also touted as heroes in their efforts to rescue stranded mountain climbers.

Deputy Prime Minister has ordered the National Security Council to introduce an early warning system on earthquakes.

Tun Dr Mahathir - file pic

Picture taken from twitter user @TawauTown

As confirmed by his special officer, former Prime Minister Tun Dr Mahathir Mohamad has also arrived in Sabah on Saturday, albeit to attend a meeting with Perkim. Although his itinerary is uncertain, he can be expected to be briefed by local authorities on the rescue efforts.

It is not known when the exact date for the Prime Minister to visit Sabah. Last month in a gathering in Tawau to rally support for his much condemned leadership, the Prime Minister had said he will visit Sabah more often and give priority to the state.













#1mdb, #malaysian-corporate-matters, #twitter

1MDB: Arul Kanda in the spotlight

It seems many are still not impressed with Arul Kanda’s effort to explain where the RM42 billion money had gone to.

We can still remember his embarrassing screw-up when in February this year where he had lied to public (and caught by the mainstream media) that the money ‘redeemed’ from the dubious investment vehicles in the Cayman Islands had indeed been remitted into their bank in Singapore.

1MDB CEO assuring (lying to) the public the cash is there

1MDB CEO assuring (lying to) the public the cash is there

As history have it, it turned out the money was not in cash but in units. How did a banker, with a supposedly good reputation had made this huge mistake is still a mystery to all of us Malaysians.

It made the CEO of 1MDB, who is in charge of billions of rakyat’s money looked incompetent and careless.

As we have told people so many times, those who are defending 1MDB will lose their credibility.

We could see what happened to Dato Seri Husni Hanadzlah and the people in Ministry of Finance. Whenever 1MDB made a mistake, it’s the people who are not directly involved that suffer the brunt.

Meanwhile people are getting annoyed and restless with Arul Kanda and his flimsy explanation. Even the mainstream media are picking up on it.

This is from The Malaysian Reserve today:

1MDB’s Bid To Explain RM42b Debt Backfires

The Finance Ministry-owned 1Malaysia Development Bhd’s (1MDB) attempt to explain its RM42 billion debt to silence detractors may have backfired.

Instead of putting to rest all the allegations about the “missing” money, the summary of 1MDB’s expenditure and debt released on Wednesday only raised more questions about the government development fund’s dealings.

“Companies don’t usually borrow funds for operating expenditure. It appears 1MDB may not have followed good business practices,” said Tan Sri Ramon Navaratnam, a former World Bank alternate ED and deputy treasury secretary general, referring to 1MDB’s RM5.8 billion borrowings for financial expenditure.

“The revelation by (1MDB president and CEO) Arul Kanda Kandasamy essentially revealed nothing that we don’t already know. The questions which we asked, however, remained completely unanswered,” said Public Accounts Committee (PAC) member and MP Tony Pua, who has emerged as an outspoken 1MDB critic over the last few years.

Most of the questions were aimed at 1MDB’s placement of a large percentage of its investment funds into overseas tax havens, said to be an unusual move.

1MDB had placed as much as RM15.4 billion of its borrowings into the largely enigmatic investment funds in the Cayman Islands (Brazen Sky, RM6.1 billion) and British Virgin Islands (1MDB Global Investments Ltd (1MDB GIL), RM5.1 billion), as well as RM4.2 billion into Abu Dhabi-based Aabar Investment PJS.

Aabar, a subsidiary of the International Petroleum Investment Co with links to the Abu Dhabi royal family, last reported total assets of US$10.15 billion (RM37.54 billion) after it had been delisted from the Abu Dhabi Securities Exchange and taken private in 2010.

According to its website, Aabar holds a 21.6% stake in RHB Capital Bhd, the owner of RHB Bank Bhd and RHB Investment Bank Bhd. Brazen Sky’s funds are reportedly managed by Hong Kong-based Bridge Partners.

Bridge Partners’ website does not contain information about its management team or track record, but it does list about 70 business deals (mostly with Chinese firms) it has conducted as a financial advisor.

“We don’t have much (of an) idea about these overseas fund managers,” said Phua Lee Kerk, chief strategist at fund manager Phillip Mutual Bhd.

Phua said it “was a little abnormal” that 1MDB would choose to put such significant portions of its investment funds into foreign funds in tax havens, based on his understanding of the company.

“Generally, funds in tax havens are perceived to have higher returns but also carry higher risks. What we see in these funds is usually low transparency in nature,” said Phua.

He said companies with similar structures to 1MDB, which he likens to a sovereign fund, would normally only invest 10%-20% of their excess profits into high risk funds, usually associated with overseas hedge accounts.

The bulk of funds under a sovereign fund manager would usually be invested directly into businesses, instead of into little-known funds such as Brazen Sky and 1MDB GIL.

“In my opinion, it would have been better to give such large amounts to local fund managers to nurture the industry,” said Phua.

“I would very much prefer to have taken a conservative approach and after all, it’s the rakyat’s hard-earned money,” he said. “What exactly was the RM6.1 billion of investment in Brazen Sky which was parked in Cayman Islands?

“Why is it that despite Arul Kanda announcing that all of Brazen Sky’s investments have been “redeemed”, there’s still no cash at all in the BSI Bank Singapore?” asked Phua, a former head of a firm listed in Singapore’s second bourse.

Despite earlier saying it would wait for the AuditorGeneral’s report on 1MDB, the PAC commenced an investigation in late May.

“The prime minister’s statements and public response made it necessary for the PAC to carry out (its own) inquiry as soon as possible,” Dr Tan Seng Giaw, deputy chairman of the committee, told The Malaysian Reserve yesterday.

Tan said the PAC’s investigation would concentrate on 1MDB’s financial governance, including “how, why, when and where 1MDB had acquired its funds, the ways these have been spent, the total amount of debts incurred and the interests”.

Meanwhile, the announcement of a formal inquiry by Malaysia’s central bank on Wednesday was welcomed but seen as overdue.

Bank Negara Malaysia (BNM) could have completed its enquiries easier if the authority had began its investigation earlier, said the head of leading anti-corruption watchdog Transparency International’s Malaysian (TI-Malaysia) affiliate.

TI-Malaysia president Datuk Akhbar Satar said action in the “earlier stages” of concern wou ld h ave facilitate d smoother evidence gathering by the authorities.

BNM now needs to perform the investigation without fear or favour, said Akhbar, who formerly led the Malaysian Anti-Corruption Agency’s training division as its director.

Try to have a good weekend Malaysians!

For further reading:

1) Arul Kanda and his explanation

2) Husni Hanadzlah and his explanation

3) People who are annoyed with 1MDB’s explanation 

#1mdb, #malaysian-corporate-matters

1MDB: Even its experts do not know how to answer

As we sympathise with Dato Seri Husni Hanadzlah and the interview he gave last Wednesday night, we just could not believe how huge the amount of money which has been mismanaged and lost due to incompetencies and sheer arrogance.

To better understand what happened to the RM42 billion debt, the diagram below, taken from Din Turtle’s blog, have rearranged Arul Kanda’s infographic into a more logical sequence.


This is how we could clearly see the liabilities in question

One of the many confusion which pro-1MDB people do not seem to understand is to think that the money is all there just because they all appear in the financial accounts. All RM42 billion of them. Especially the much talked about RM27 billion.

Let’s have the simplest example:

Ali’s company borrowed RM100 from Ahmad. Ali then give that RM100 money to Ah Chong. Ah Chong then split the money he has with Abdul. So now, Ah Chong has RM50 and Abdul has RM50 to enjoy.

At the end of the financial year, if Ali’s company has not paid back the money to Ahmad, the company will have as liability, an amount of RM100 stated in its financial statement.

In Ali’s financial statements, there will be RM100. This is undeniable.  But the money has gone and Ali has to find other means to pay off the loan to Ahmad.

Now that RM100 was what Arul Kanda had shown the public. It is an amount from the financial statements. Of course, he will say the money is all accounted for and has not disappeared. Undeniably, it has not disappeared from the financial statements. But where has the money gone too?

This is the question.

Some pro-1MDB buffoons we encountered even went the extra mile by claiming that all 1MDB’s ‘money’ from Cayman has been repatriated into BSI and it is there but in the form of ‘units’. Therefore, the money has not disappeared!

Question is, why in units? Why not cash? Where has the cash gone to? Did Riza Aziz buy his multi million apartment in New York using units? Can Jho Low pay his extravagant parties with units? Can Malaysians go to Haj and pay Tabung Haji using those units?

If Husni ‘units, just units’ Hanadzlah could not even answer this, definitely these random people who self appointed themselves to be the defenders of 1MDB, would not know any better.

Please do not think Malaysians are gullible enough to believe everything by just showing the financial statements. Husni’s interview could not even ascertain for sure about the amount invested in Aabar, GIL Fund and Brazen Sky. Even KPMG, the previous auditor before Deloitte had stated in the audit report:

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

Hope this will clear all the befuddled minds as to why people are questioning 1MDB’s stupid business sense.

One look at the diagram above and you can see the ridiculous business model that 1MDB has been caught with.

More people are asking newer questions like:

a) Why is there a surplus cash of RM900,000,000 in liabilities? Shouldn’t cash be in assets?

b) Why should 1MDB asked for cash injection of USD1 billion from IPIC/Aabar last week when they could just withdraw the RM4.2 billion deposit with Aabar to pay off the bank?

c) Why is there still RM6 billion inherited debts? Why are they still not being paid off by 2014? Is this legacy debt from TIA back in 2009?

We are sure there are plenty more questions. And all those desperately needed to be answered by the official spokesperson of 1MDB (because its BOD, CEO and Chairman are rendered useless and brainless).

Since today is Friday, we shall venture into some light reading to jumpstart the mind. First from the Facebook of KijangMas Perkasa. This was taken without consent, lifted up from the same Din Turtle’s article stated above. Thank you KijangMas.

This is his take on the fiasco:

Since today is Yaakob Osman Day, I share his excellent down-to-earth summary of Arul Kanda’s revelations of 1MDB’s RM41.8 billion debt. 

I hope we don’t have to wait another eight months for the release of the Asset side of the equation. 

I’m keen to see how the DeeBee Charlatans brew reasonably believable Asset numbers as only RM13.7 bilion of the RM41.8 billion were used to acquire hard, tangible assets that could be sighted, touched, smelled and hugged by us all.

That’s RM12 billion (excluding RM6 billion legacy debts that is another can of worms) for the overpriced IPPs with mostly outdated fully depreciated assets near the end of their lopsided (and will-not-be-renewed-on-those-terms) concessions and RM1.7 billion for the three infamous land parcels in KL and Penang. The balance of RM28.1 billion of debt was used for things which at this juncture are as clear and tangible and comprehensible as flying pigs and the tooth fairy. 

And I would definitely fire my CEO and especially my CFO if my Group incurs RM4.5 billion in “Cost of Finance and Working Capital”, not to mention the forex losses of RM900 million, against the real, tangible asset acquisitions of RM13.7 billion. And again, I will skin the CFO alive if he pays the Group’s “Cost of Finance”, currency losses (“Foreign Exchange Cost”) and Taxes with DEBT. Yes, with DEBT. Gali lubang kambus lubang, gali lubang kambus lubang. Guna hutang bayar bunga, bayar kerugian forex, bayar cukai. What accounting principle is this? All these should have been covered by Operating Income lah, unless the IPP revenues have also dissipated into thin air.

And c’mon lah, “Investment Cost” is an oxymoronic term. By definition, you only invest what you have. You don’t invest debt and other borrowings and then incur “cost” of your investment. Investments MUST generate returns. Investments are not cost centers; they CANNOT incur “cost” more than returns. If they do, then these are not investments but borrowed money lost and pilfered via paper shuffling. And when a company needs to borrow more to service interest and for working capital — including almost one billion fresh ringgits from the Malaysian Treasury — it is in no position to “invest” anything. Whatever funds in hand — including funds raised through debt — must be available for operations. And really lah, if a company has “Investments” of RM15.4 billion, why need the almost one billion ringgit government lifeline? And why need IPIC’s RM3.7 billion injection that I’m sure was secured at a very high price to ultimately the nation?

Now, simple question. The RM15.4 billion “Investments” in Brazen Sky, Aabar Investment Deposits and Global Investment Limited Funds generate what kind of returns? 5%? 7%? 10%? What? Enough to cover fees and interest costs of borrowing those funds? Again, what convoluted financial logic entails borrowing money at a purported 10-20% p.a. all-in costs for the purpose of “Investments” in fuzzy undefined paper assets and units of dog’s balls or something with undetermined and questionable returns? And where are these returns thus far? Not enough to service the debts?

Hence needing almost a fresh one billion ringgit of tax payers’ money? What’s the redemption/liquidation value of these “Investments” today? Again, how can a company “invest” debt? Mana ada logic? Is this the modus operandi of 1MDB? Borrow at Ah Long terms and try to make money in a crapshoot? Oh, and the Malaysian government inexplicably guarantees this Ah Long debts? What really is the Strategic Value of the RM15.4 billion “investments” in the three entities that justifies a sovereign guarantee for the borrowed money? Otherwise we all will starve or get conquered by some enemy state? What Strategic Value? 

Semua ini ada masuk akal ka? 

As I commented in YO’s post:-

” Good of Arul to lay the big numbers on the table and now he should be well-equipped to clarify and quantify the multiple embedded line items not yet disclosed or detected as we collectively dissect the details and financial logic of the various transactions.”

And since we are all constrained by a lack of detailed data beyond the top line numbers, I added:-

“The same info/data/context limitation applies to all.

That’s why I’m amused by those who are cocksure of the positive rationale and practicality of these multifarious financial engineering tapdance based just on fuzzy bits of incoherent numbers . . . although these Jacks cannot reconcile their “everything’s fine & dandy” stance with the multiple audits and investigations of this enterprise by many entities across all genres, not to mention my old buddy Husni’s admission of inherent grave debt-servicing problems.

Where we stand now, based on the chunks of data without the granularity of line item Sources and Application of funds, we can only ask more questions, seek more details of the blobs of debts and “investments” quantified in billions upon billions of fuzziness.

Your (YO’s) summary is as far as we can go based on current publicly disclosed info. And the revelations have raised more questions than answers. What we all DON’T NEED is the hysterics of the Jib Gor Jacks who tumble head over heels to rationalize complex derivative-flavored transactions wayyy over their heads and handicapped by their utter ignorance of the intricacies of cross-border financial dynamics and equipped only by these chunks and blobs of top level numbers.

To these Jacks, like almost everyone else, you know Jack Schitt about these numbers. So just STFU and go pursue some other pastime.”

And this applies to Rafizi and Tony Pua as well. Shut up. Just shut up. Don’t turn this into a partisan political circus. This is a matter of national interest perhaps unprecedented in our corporate history. Your partisan barkings will just give Jib Gor the lifeline among the gullible fools within UMNO to not cleansed themselves from within. In effect, you buffoons are now Jib Gor’s Talian Hayat. So just STFU and stand aside as the ominous fallout from this scandalous outrage descends on the culprits.

We think this is a clear enough point of view for people to understand.

Next is from Syed Outside The Box’s article:


  • Husni warns if 1MDB debt not resolved, negative events impact economy 
  • 1MDB downgrade credit outlook, plunge in value of ringgit
  • if Putrajaya forced to shoulder RM42b on top of dev. expenditure RM52b 
  • govt fail to meet targeted deficit of 3.2% and revert to over 4% 
  • ratings will drop, currency will drop like in 1998,.. how to pay debts?
  • must solve issue of debt so people do not have to worry,” he said 
  • Putrajaya accountable for RM11.1b loan secured using letter of support 
  • Moody’s said govt support of 1MDB jeopardise sovereign credit rating
  • chain of negative effects if 1MDB’s debt passed to govt
  • Husni stressed in same interview no money yet been lost by 1MDB 
  • banking sector first to chase firm ..to avoid non-performing loans
  • “financial sector is quiet, means issue of money lost not there”
My comments : Who asked you to incur so much debt idiot? 
And if 1MDB is such a great investment, if it is so profitable, then why worry about 1MDB not being able to pay its debts? Just use the billions of profits that 1MDB is making and settle all the debts. Why complain that if 1MDB debts are not paid then Malaysians will all suffer? Why put the burden on the people?  Husni Hanadzlah should just resign. Najib should resign as well. 
In 1998 the entire Asian region was hit by the money speculators particularly George Soros. Thailand was hit before us, also  South Korea and Indonesia. They  all suffered from the Asian Contagion.   
This time the other Asian economies are much stronger and robust. The Phillipine economy is racing ahead, the strongest economy in ASEAN. 
Only Malaysia is facing bankruptcy because the Advisor to 1MDB has been conned by a 29 year old Chinese boy. 
RM42 Billion of taxpayers money has disappeared. RM27 Billion has literally gone out the window. 
RM2.6 Billion was paid to Jho Low for nothing. That was stolen money. 
The remaining RM15 Billion has been used to buy end of shelf life and “license almost expired” power plants at exhorbitant prices – way above market value. That money is also almost as good as gone. 
In 1998 the country’s economy was strong.  Despite the Asian Financial Crisis the government had enough money to pay all its debts. Our credit ratings were never downgraded by Moody’s or by anyone else. 
We recovered well and went on to record 7%, 8% and even 9% growth. Now we can barely get past 5% growth.
This is not the fault of the Malaysian people. This is the fault of the clueless morons who are our prime minister and the members of the Cabinet.  Including Husni Hanadzlah.  
These people must be held accountable for this gross incompetence, dishonesty and stupidity.


Lastly, this is a comment from Syed’s reader:

AnonymousAnonymous said…

This power point is no financial statement I have ever seen where debt = “asset” + “liabilities” (eg. Inherited debt?) + “expenses” (+ eg. Brazen sky? Tax paid?) + “losses” (eg. forex). I have no idea what the f*ck financials is this.

1. It shows DEBT = All 1mdb finances. So does 1mdb operate only on debt money ie. Cash hutang from bank. 1mdb tak dak income ka?

2. When you purchase companies you assume their hutang. That is fair n normal. But you do not pay-off those companies debt; the companies pay them from their operating cashflow. Unless you are stupid. Question: did 1mdb pay off the companies 6 billion hutang using 1mdb loan?

3. Cost of finances is 4.5 B. Over 5 years of 1mdb. That’s almost 1B per year. That is usually finance expenses + interests. You pay that using positive operating cashflow not from another source of debt (1mdb loan). If loan is being used to pay loan then the assets bought are non viable. So scratch all assets on line 1 and 2. Useless. Business live and die on cashflow. After 5 years if still living on debt then the entity is not a going concern. Conclusion: 1mdb is bankrupt

4. Tax Paid = 400 million. Simple question. Has 1mdb remitted that payment to Tax Department. �� I doubt it. Kalau cash remitted to bank in spore pun all of sudden turn into “units” whatever fuck that means I doubt it lah. But anyway – confirm la tax dept please

5. All those 15.4 billion investment/deposits. That means those are still liquid cash held by these entities for whatever reason but are all due to 1mdb, or are they just like those “units” in spore or some other form of burnt cash. Please detail what, where, and verified documentation where the moneys are. We want those money back NOW. If not, why not.

Thursday, June 04, 2015 2:21:00 PM

Thank you and try to have a fine and dandy Friday!

More readings:

1) There’s no need to wait for an audit for the company to answer questions everyone is asking.

2) Thanks 1MDB, now tell us if the RM15.4 billion is in cash or ‘units’

#1mdb, #malaysian-corporate-matters

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