Tuesday, January 12, 2016

Najib should give Ministerial Statement on how 1MDB has purportedly been rescued with public funds and allow a debate at the Special Parliamentary sitting on 26 January 2016

Prime Minister Datuk Seri Najib Razak declared yesterday that public funds were not being used to resolve 1Malaysia Development Berhad's (1MDB) financial woes.

"An end to the issues faced by 1MDB is forthcoming, as I had promised six months ago.  What we are glad about is that we are resolving it not by way of a memorandum of understanding (MoU) but through an 'agreement', without touching any of the people's money," he said at the monthly assembly for the Prime Minister's Department today.

This follows 1MDB President Arul Kanda’s interview with the The Edge weekly where he boasted that 1MDB was not bailed out by the government like in the cases of national carrier Malaysian Airline System Bhd (MAS) or national carmaker Proton.

Any Malaysian who is financially literate would know that the Prime Minister is lying through his teeth, in his attempt to sweep the RM50 billion 1MDB scandal under the carpet.

Dato’ Seri Najib Razak is clearly attempting to mislead Malaysians on two counts.

The first is that the 1MDB problems have been resolved.  They are, in reality, far from being resolved.

Despite an “agreement” with Abu Dhabi’s International Petroleum Investment Corporation (IPIC), the proposed RM18 billion debt-asset swap with IPIC has not been completed, and there is no certainty that 1MDB would be able to cough out RM18 billion of assets to swap the equivalent amount of debt with IPIC by June 2016.

In fact, the debt asset swap agreement signed in June 2015 was only possible because the Government has provided an indirect guarantee to IPIC to bail out 1MDB – if 1MDB fails to fulfil its part of the obligations, the Malaysian tax-payers will have to fork out cash to compensate IPIC.

Similarly, the sale of Bandar Malaysia to the Iskandar Waterfront Holdings and China Railway Engineering (IWH-CREC) consortium is far from being completed, as acknowledged by 1MDB themselves.  The completion will only take place in June 2016 on the assumption that all conditions attached to the agreement can be fulfilled by all parties.

On the second count, even if they were resolved (and they are not), they are being resolved with a bailout by the tax-payers.

Bandar Malaysia, for example, was sold at a massive profit only because the Federal Government sold the land to 1MDB at heavily discounted prices. 1MDB bought the land parcels for RM1.6 billion in 2012, and recently sold 60% of the land for a purported RM7.41 billion despite not having laid a single brick on the land.

The money received from the sale should have gone into the national treasury to help the man-on-the-street cope with the rising costs of living.  Instead, it went to 1MDB to help 1MDB pay down its debts.

Dato’ Seri Najib Razak has perhaps also forgotten that he had granted RM950 million of emergency credit to 1MDB in February last year, despite having promised the Parliament that the Government would not bailout 1MDB.

In addition, the Government provided 1MDB with another “letter of support” to borrow another US$150 million (RM650 million) from Bank Exim.

Since Dato’ Seri Najib Razak is so certain of 1MDB’s resolution without using tax-payers’ money, we call upon the Prime Minister to deliver a Ministerial Statement on the 1MDB scandal in Parliament. The very first possible opportunity will be during the Special Parliamentary Sitting on 26 January 2016, and the Members of Parliament should be allowed to debate the statement to ensure that all doubts are forever quelled.

The failure to do so will only prove that the Prime Minister has been less than truthful, has much to hide, and does not even dare to answer to the supreme legislative body of the land.
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