Thursday, March 17, 2016

Why has the Royal Malaysian Police not investigated 1MDB's missing Cayman Islands investment funds?

I  had  asked  the  Minister  of  Finance  who  is  the  investment  bank  which  is  managing  the balance  of  the  proceeds  in  the  form  of “units”  which  was  redeemed  from  1MDB’s  Cayman Islands investment amounting to the reported RM940 million.

I  received  the  reply  yesterday stating  that “no  investment  bank  was  appointed  to  manage state investment firm 1MDB's funds in the Cayman Islands.”

The lies by 1MDB and the Minister of Finance have now come a full circle, which strengthens the suspicions that there was never any substantial money invested in the Cayman Islands. The investment was purportedly made with the US$2.318 billion proceeds from the disposal of 1MDB’s investment with PetroSaudi International Limited.

Instead, the supposed opaque investment now looks like a cover story for 1MDB to hide the fact   that   the   billions   of   dollars   invested   with   PetroSaudi   have   been   lost   through embezzlement  and  pilferage. In  fact  the  entire  scam  was  so  well-thought  through  that  it fooled international auditors KPMG and Deloitte for years.

However,  the  chickens  finally  returned  to  roost  when  1MDB  was  forced  to “redeem”  the funds from Cayman Islands.

Under pressure from debtors, 1MDB CEO Arul Kanda hurriedly announced on 13 January 2015 that "following a commitment made by the Chairman of the Board of Directors in a statement dated 23 December 2014, 1MDB can confirm that it has now redeemed in full the US$2.318 billion invested by the company in a Cayman Islands registered fund”.

Again, under pressure to explain what exactly has been “redeemed”, Arul Kanda told the Singapore Business Times on 9 February 2015 that “The cash is in our accounts and in US dollars. I can assure you (about that) . . . I have seen the statements.”

The Minister of Finance further confirmed on 11 March 2015 in Parliament that the “cash”was held in BSI Bank in Singapore.  He further explained that the money wasn’t repatriated to Malaysia to avoid the hassle of Bank Negara approvals.

However, following a damning exposé by the Sarawak Report that BSI Bank denied the existence of cash held in the 1MDB account, the Minister of Finance retracted his earlier reply in Parliament.  On 19 May 2015, and informed the House that the redeemed proceeds were “assets” and not cash.

But a few days later, the mystery had deepened when Second Finance Minister Husni Hanadzlah claimed that what was held in BSI Bank were “units”, when he was asked to clarify on the exact nature of these “assets” in Singapore.

On 10 June 2015, without explaining what these “units” really were, Arul Kanda blamed the entire fiasco of cash to assets to units on “miscommunications on the matter”.

Now, the latest reply from the Finance Minister has proven that Arul Kanda and 1MDB has “miscommunicated” not only on the form of proceeds which were redeemed from the
Caymans investment. The reply showed without a doubt that Arul Kanda and 1MDB lied about the fact that the balance of the US$940 million investment in Caymans were redeemed in the first place.

The purported “investment” is still stuck in Cayman Islands and could not be liquidated.

Even more shocking was the claim by Dato’ Seri Najib Razak that there was no investment bank fund manager for the “units”! How can there be “units” if there is no fund manager?

1MDB must be the first investor in the world who can hold fund manager-less units creating a brand new class of investment assets!

If not,  all of the above points to the fact that lies after lies after lies were told by 1MDB and the Government to carry out a massive cover up of the loss of billions of ringgit by 1MDB over its investment in and with PetroSaudi International.  For the billions we have invested in PetroSaudi, we are now in possession of worthless or even fake and fraudulent “units”.

Why hasn’t the Royal Malaysian Police conducted a thorough investigation over the missing funds and these dodgy “units” even after I have made my police report exactly in March a year ago?
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