Wednesday, May 27, 2015

There Is No Escape - Clause 117 Reveals PM's Absolute Accountability


The latest exposé by The Malay Mail Online and Malaysiakini confirmed that the entire responsibility of the RM42 billion 1MDB scandal lies with the Prime Minister, Dato’ Seri Najib Razak

In a sighted copy of the Memorandum and Articles of Association (M&A) of 1Malaysia Development Bhd dated 2 September 2009, The Malay Mail Online and Malaysiakini both exposed a special Clause 117 which placed absolute powers over the company’s decisions at the hands of the Prime Minister.

Clause 117 dictates that the Prime Minister must give his “written approval” for any of 1MDB’s deals, including the firm’s investments or any bid for restructuring.

This includes “any financial commitment (including investment), restructuring or any other matter which is likely to affect the guarantee given by the Federal Government of Malaysia for the benefit of the company, national interest, national security or any policy of the Federal Government of Malaysia”.

Other matters which need the Prime Minister’s written approval are amendments to the company’s M&A as well as all appointments and removal of directors and senior management team of 1MDB.

Therefore the above exposé debunked all previous attempts by the Prime Minister to disassociate himself from the management and operations of 1MDB.

When the 1MDB scandal was first exposed by the UK Sunday Times and The Sarawak Report, the former reported on 1 March 2015 that "the Malaysian government said the prime minister was not involved in the day-to-day operations of 1MDB, which is run by a professional and experienced team.”

Previously, even in Dato’ Seri Najib Razak’s letter of demand sent to me on 21 November 2014 over my alleged defamatory statements with regards to 1MDB, his lawyers stated unequivocally that “contrary to your defamatory statements… our client being the chairman of the Board of Advisors of 1MDB only renders advice to the Board of Directors of 1MDB who is tasked for the management and operation of 1MDB.”

In fact, he is even more involved in the matter directly than we, the 1MDB’s harshest critics, have anticipated as his role is specifically cast in stone in the company’s M&A.

With this confirmation, all the responsibility over the colosal RM42 billion of debt and billions of ringgit of losses and missing cash falls directly and entirely on the shoulders of the Prime Minister. Dato’ Seri Najib Razak should drop all pretence of ignorance and give up the farcical charade that 1MDB is a healthy and salvageable company because he is only acting to deny his own culpability and protect his own interest in the matter.

We call upon the Prime Minister to immediately schedule an official Ministerial Statement in Parliament during the current sitting to give a full and complete explanation of the mother of the mother of the mother of all scandals in Malaysia, the 1MDB heist of the century. In particular, the Prime Minister, who also acts as the Finance Minister, must explain in full, his involvement in the initial US$1 billion investment with Petrosaudi International Limited and the additional US$1 billion of loans extended to Petrosaudi. He must also explain his approval for the direct payment of more than US$1 billion to Good Star Limited, a company controlled by the controversial Jho Low as well as the US$260 million of funds siphoned from 1MDB used for the acquisition of UBG Bhd from the latter’s substantial shareholder, Tun Taib Mahmud’s family vehicles.

In addition, Dato’ Seri Najib Razak must now explain why 1MDB proceeded to raise bonds amounting to US$6.5 billion by paying fees in excess of 10% to Goldman Sachs International, as well as why a costly guarantee was sought from Abu Dhabi’s International Petroleum Investment Corporation (IPIC) for US$3.5 billion of these bonds.

Most importantly, he must disclose exactly where all the above 1MDB’s money is today. All of the above have led to 1MDB’s horrendous predicament today where it has no money to repay its mountain of debt nor service its interest amounting to some RM2.5 billion annually.

Tony Pua
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