Friday, October 16, 2015

Did 1MDB's top executives mislead the Board of Directors in its investment with Petrosaudi International Limited?

The latest set of 1MDB minutes exposed by The Sarawak Report dated 18 September 2009 revealed the fact that the top executives of the company clearly misleading the Board of Directors with regards to the US$1 billion investment with Petrosaudi International Limited.

According to the document, Mr Casey Tang, 1MDB’s Executive Director of Business Development briefed the Board that “Petrosaudi is ultimately owned by King Abdullah and the Kingdom of Saudi Arabia”.

Casey, who is currently on Bank Negara’s wanted list to assist with its investigations on 1MDB, said so to convince the Board on the merits of investing nearly all of the RM4.3 billion proceeds from its first fund-raising exercise to acquire 40% of the joint venture company with Petrosaudi.

After the joint venture agreement was signed, 1MDB further deceived the Malaysian public in its press statement on the 30 September 2009 that claimed that
Malaysia and Saudi Arabia today entered a new era of economic cooperation with the setting up of a US$2.5 billion joint venture company, which will spearhead the flow of foreign direct investments from the Middle East as well as make strategic investments in high impact projects here [in Malaysia].

The language of the entire press release was to give the impression that 1MDB was really forming a joint venture with the Saudi Arabian government, when in reality, they were merely entering into a transaction with an insignificant company registered in Saudi.

On hindsight we also know that Petrosaudi did not have to invest a single cent into the joint venture and the purported “flow of foreign direct investments from the Middle East” into Malaysia is nothing but a pipe dream.

This was despite the then Chairman of 1MDB, Tan Sri Mohd Bakke Salleh pointing out that the Board of Directors “would be more comfortable if the Petrosaudi contribution to the joint venture company (JVC) came in the form of 50:50 cash and assets, i.e., at least 50% cash.”

The minutes also noted that “this sentiment was echoed by the other directors who would prefer that PetroSaudi inject at least US$1 billion cash to the JVC to complement 1MDB’s US$1 billion.”

However, not only did PetroSaudi not have to inject any cash into the joint venture, 1MDB siphoned US$700 million from the US$1 billion investment to a unrelated company, Good Star Limited.  The misappropriation of the US$700 million remains unexplained as of today.

Therefore, 1MDB’s top management – Casey Tang, and the then CEO, Datuk Shahrol Halmi, blatantly misled and completely ignored the opinions of the Board.  Such contempt for the Board decisions, must certainly be punished.

Why is it that the Ministry of Finance has never taken any action against these reckless and defiant executives?  In fact, Datuk Shahrol Halmi still remains a Director in 1MDB, as well as a Director of PEMANDU, the Performance Management Delivery Unit in the Prime Minister’s Department?

Once again, I call upon the current 1MDB President, Arul Kanda to confirm if the Board Minutes published by Sarawak Report are genuine.  If they are indeed genuine as we all suspect they are, doesn’t it immediately prove many of the purportedly “wild allegations” against 1MDB?

As the President of 1MDB and its chief executive of the wholly-owned state enterprise, Arul Kanda’s role is not to cover up the shenanigans in the scandal-ridden company.  Instead, it is Arul’s job to play an active part in uncovering the wrong-doings of the past to ensure that those guilty of embezzlement, misappropriation and criminal breach of trust can be brought to justice.  Without resolving the past, 1MDB will never be able to move forward in resolving the crisis it faces today.
Post a Comment