The scandalous 1MDB-Petrosaudi joint-venture agreement stinks to high heavens, highlighting gross abuse of US$1 billion of funds guaranteed by the Federal Government.
The Sarawak Report exposed the secret 1Malaysia Development Bhd (1MDB) and Petrosaudi International Limited (PSI) joint venture agreement dated 29 September 2009, revealing details which points towards a highly elaborate scam to siphon money from 1MDB. This agreement was signed between Tarek Essam Ahmad Obaid, CEO of PSI and Datuk Shahrol Azral Ibrahim Halmi, the then Managing Director of 1MDB.
The chronology of key events from the Agreement is outlined as follows:
18 Sep 2009 PSI incorporated a wholly-owned subsidiary “1MDB Petrosaudi Limited”
25 Sep 2009 PSI signed an agreement with its subsidiary, where “1MDB Petrosaudi Limited” agreed it owed PSI US$700 million (RM2.5 billion) in “advances”
29 Sep 2009 1MDB buys 40% of new shares in “1MDB Petrosaudi Limited” by injecting US$1 billion into the joint venture.
30 Sep 2009 “1MDB Petrosaudi Limited” repays US$700 million to PSI.
The fact that PSI took the initiative to incorporate a subsidiary with the name “1MDB” on 18 September clearly demonstrates that PSI was well aware it would be forming a joint venture vehicle with 1MDB.
Despite the fact that “1MDB Petrosaudi Limited” is an empty shell at that point of time, and knowing that a joint venture agreement will be signed soon, PSI created a loan document which “1MDB Petrosaudi Limited” owed its parent US$700 million in advances. As a result, “1MDB Petrosaudi Limited” immediately became an empty shell with a US$700 million outstanding debt.
Despite knowing that “1MDB Petrosaudi Limited” had an existing debt of US$700 million, 1MDB agreed to invest US$1 billion (RM3.5 billion) into the newly set up company to subscribe for 40% of new shares. On the other hand, for PSI’s remainder 60%, the parent company injected “assets” valued at US$1.5 billion instead of cash.
Immediately after the signing of the agreement, perhaps before the ink was even dry, “1MDB Petrosaudi Limited” repaid in full, the US$700 million (RM2.5 billion) of advances to PSI using the newly received funds from 1MDB. The arrangement meant that PSI immediately cashed in a cool US$700 million for its own use.
The question that needs to be asked is why on earth did 1MDB invest US$1 billion in a joint venture where the joint venture partner immediately gets to siphon 70% of the funds out of the joint venture for practically nothing in return?
This obscene transaction stinks to high heavens and points toward an obvious collusion between PSI and 1MDB to siphon the US$700 million from 1MDB. This money was raised by 1MDB from debts guaranteed by the Malaysian Federal Government.
The 1MDB and Petrosaudi joint venture was the very first “investment” made by 1MDB. It is clear from the above that it is the first hole dug by the company, which resulted in more and bigger holes dug subsequently to cover up the earlier holes. As a result, 1MDB’s debt escalated rapidly since 2009 to reach RM42 billion in 2014, where it now has widely publicised problems repaying its debts.
Dato’ Seri Najib Razak, who is both the Finance and Prime Minister, as well as the Chairman of the Board of Advisors must bear the biggest responsibility over this multibillion ringgit debacle. He is accountable for the actions of 1MDB and must immediately explain the above transaction and the losses it caused the Malaysian government and tax-payers.
No comments:
Post a Comment