1. The Rationalisation Plan of 1MDB announced in May last year was always like a house built on sand.
1MDB noted in its press statement this morning that “1MDB now retains a cash surplus of approximately RM2.3 billion for infrastructure and other debt service requirements. Future debt obligations are fully matched by the sale of Bandar Malaysia land, the development and sale of TRX lands as well as the eventual monetisation of the Pulau Indah and Air Itam lands.”
We have always maintained that the 1MDB Rationalisation plan was built on sand as we were never convinced that the US$4.7 billion debt-asset swap plan will be successful. This was because it was clear from 1MDB’s financial statements and the events which took place over the past year showed that 1MDB does not have equivalent amount of assets to “swap” with IPIC’s assumption of 1MDB debt.
The lack of conviction was made more obvious by 1MDB’s refusal to provide the Auditor-General with the necessary documents to verify the value or even the existence of 1MDB’s overseas cash and assets.
Hence the continued insistence by 1MDB that “further debt obligations are fully matched by the sale of Bandar Malaysia land...” etc., especially after the collapse of the IPIC-1MDB agreement is an irresponsible attempt to continue play a game of smoke and mirrors.
In addition, we also have doubts on the ability of the Iskandar Waterfront led consortium’s ability to complete the purported RM7.42 billion for the 60% stake in Bandar Malaysia. Based on Iskandar Waterfront’s financial statements for December 2013, it only has net assets of RM3.46 billion.
2. 1MDB’s failure to repay US$50 million of interest will cause cross default.
1MDB in its latest statement is also attempting to play down the impact of its default on the US$1.75 billion bond issue where it has failed to pay for the US$50 million of bond interest due.
1MDB has confirmed cross defaults have been triggered on the 1MDB RM5 billion Sukuk due 2039 (“1MDB Sukuk”) and the RM2.4 billion Bandar Malaysia Sdn Bhd Sukuk due between 2021 and 2024 (“BMSB Sukuk”).
1MDB said there is no cross default on an RM800 million loan from the Social Security Organisation (“SOCSO Loan”) although there is a possibility that the “material adverse effect” clause may be triggered due to the developments highlighted above.
1MDB further added that “the 1MDB Sukuk and the SOCSO Loan both benefit from guarantees issued by the Government of Malaysia.”
This is another obvious admission that 1MDB will be relying entirely on the Malaysian Government to bail out 1MDB in its burgeoning debt crisis. The event of default has been triggered which means that all bond holders will now have the absolute option to call upon the Malaysian Government to pay up for its debts.
The Minister of Finance cannot continue to remain silent on this matter as this is the single largest default by any Government subsidiary ever in the history of Malaysia. Dato’ Seri Najib Razak must provide a full and satisfactory explanation on the financial disaster taking place before our eyes and outline the steps which will be taken to remedy the situation.
This is especially since 1MDB and Dato’ Seri Najib Razak has repeatedly denied any need for Government bailouts despite repeated warnings by opposition critics.
3. Malaysian Government will ultimately bear the burden of all advances, interests and bonds guaranteed by IPIC.
Under the debt-asset swap arrangement with IPIC, the agreement clearly states that the Ministry of Finance will indemnify IPIC of all its obligations including its advances and payments of interest on behalf of 1MDB.
What is further highlighted in the Public Accounts Committee report (page 62), as pointed out by the Auditor-General was that 1MDB had provided a back-to-back guarantee on IPIC’s guarantee.
“Dalam Interguarantor Agreement yang ditandatangani antara 1MDB dan IPIC bertarikh 21 Mei 2012, 1MDB dikehendaki mendapatkan Ministry of Finance Inc., untuk melunaskan semua principal dan kos berkaitan yang telah didahulukan oleh IPIC sekiranya 1MDB gagal melaksanakan obligasinya sebagai penjamin... Di samping itu, syarat dalam Interguarantor Agreement tersebut adalah bertentangan dengan surat kelulusan daripada Menteri Kewangan bertarikh 26 Mac 2012 dan 3 Ogos 2012 yang menyatakan bahawa terbitan kedua-dua Nota USD itu diluluskan tanpa jaminan kerajaaan.”
Hence ultimately, it is clear that 1MDB is continuing to play a poker game even after its cards have been fully revealed to be duds. The refusal to pay the US$50 million interest may force IPIC to repay the US$1.75 billion of bonds it guaranteed on behalf of 1MDB.
However, ultimately, IPIC will make the claim on the Malaysian Ministry of Finance based on the inter-guarantor agreement. Will Dato’ Seri Najib Razak refuse to honour 1MDB’s agreement with IPIC, the sovereign wealth fund of the Abu Dhabi Government?
4. Arul Kanda has finally admitted not only possible fraud, but also possible collaborators from 1MDB.
"What we cannot discount is there could actually be fraud... a massive fraud... and maybe there was collaboration from our side," Arul Kanda told The Edge Financial Weekly in a cover story interview.
Arul Kanda has finally admitted to a point we have been alleging for nearly 2 years, that there may be systematic fraud, deception and misappropriation in 1MDB resulting in billions of dollar of losses.
His admission now requires him to make a police report to disclose what he knows and demand the authorities to investigate the possible fraud claims. He must do so now in order to ensure that he will not be found to be complicit in the covering up the entire fraud in any subsequent investigations.
Tuesday, April 26, 2016
Wednesday, April 20, 2016
"Nothing to hide", but PAC Chairman deletes BNM findings on Good Star Limited's ultimate beneficiary being an individual unrelated to Petrosaudi
The opposition members of the Public Accounts Committee (PAC) disclosed yesterday that PAC Chairman Datuk Hasan Arifin had deleted a key sentence/paragraph from the PAC Report on 1MDB after the report has been concluded by the committee.
This key section states that Bank Negara Malaysia has been informed by the relevant overseas authorities on a voluntary basis that the ultimate beneficiary of Good Star Limited is an individual unrelated to the Petrosaudi group. 1MDB has made payments of US$700 million and US$330 million in 2009 and 2011 respectively even though the funds were meant for its investments with Petrosaudi.
Datuk Hasan Arifin responded yesterday evening that “the deletion of two sentences in no way affects the final report by the Public Account Committee's (PAC) on 1MDB”. He said the sentences were deleted because of their unclear status or being investigated and were not for public consumption.
Firstly, if the “two sentences” were indeed inconsequential to the PAC Report, why did the Chairman find it necessary to delete them in the first place?
Secondly, the PAC did not at any point empower the Chairman to delete these sentences. The fact of the matter is that the final meeting of the PAC which included members of the backbenchers and the opposition, approved the final draft which included the above information.
Datuk Hasan Arifin tried to defend his unilateral decision by claiming that the statement “is unclear or being investigated”, hence “is something prejudicial”.
The PAC Chairman should inform the Parliament and all concerned, what exactly is so unclear about Bank Negara’s findings that “the ultimate beneficiary of Good Star Limited is an individual unrelated to the Petrosaudi International Ltd”?
This finding is crucial to the entire investigations of 1MDB because the company and its executives have testified to the PAC that Good Star Limited is a subsidiary of Petrosaudi. However, the company was unable to provide any concrete evidence, such as a company search or certificate of incorporation from the relevant authorities, despite repeated requests, to back up its claims to both the Auditor-General and the PAC.
All 1MDB could provide was a letter dated 2015 from Petrosaudi to 1MDB making a claim that Good Star Limited was part of the Petrosaudi group. This letter would certainly hold no water in any court of law and the PAC would make itself a laughing stock of the world if we were to accept the letter at face value.
Hence, is the PAC Chairman questioning and challenging the authority and investigative findings of Bank Negara Malaysia?
If he is questioning the findings of Bank Negara, then why did he persistently, as recorded in the Hansard on at least 5 occasions, refused our request to call Bank Negara to testify to the PAC? Is there something that Datuk Hasan Ali is aware of, which he doesn’t want PAC members to find out?
In the light of the above, as well as the latest developments involving the complete collapse of 1MDB’s debt-asset swap agreement with IPIC, we once again call upon the PAC Chairman to call for an immediate PAC meeting and officially re-open our investigations on the troubled 1MDB. The failure to do so under the current circumstances would mean the failure of the PAC to fulfill our duties and obligations to the Parliament and the rakyat.
This key section states that Bank Negara Malaysia has been informed by the relevant overseas authorities on a voluntary basis that the ultimate beneficiary of Good Star Limited is an individual unrelated to the Petrosaudi group. 1MDB has made payments of US$700 million and US$330 million in 2009 and 2011 respectively even though the funds were meant for its investments with Petrosaudi.
Datuk Hasan Arifin responded yesterday evening that “the deletion of two sentences in no way affects the final report by the Public Account Committee's (PAC) on 1MDB”. He said the sentences were deleted because of their unclear status or being investigated and were not for public consumption.
Firstly, if the “two sentences” were indeed inconsequential to the PAC Report, why did the Chairman find it necessary to delete them in the first place?
Secondly, the PAC did not at any point empower the Chairman to delete these sentences. The fact of the matter is that the final meeting of the PAC which included members of the backbenchers and the opposition, approved the final draft which included the above information.
Datuk Hasan Arifin tried to defend his unilateral decision by claiming that the statement “is unclear or being investigated”, hence “is something prejudicial”.
The PAC Chairman should inform the Parliament and all concerned, what exactly is so unclear about Bank Negara’s findings that “the ultimate beneficiary of Good Star Limited is an individual unrelated to the Petrosaudi International Ltd”?
This finding is crucial to the entire investigations of 1MDB because the company and its executives have testified to the PAC that Good Star Limited is a subsidiary of Petrosaudi. However, the company was unable to provide any concrete evidence, such as a company search or certificate of incorporation from the relevant authorities, despite repeated requests, to back up its claims to both the Auditor-General and the PAC.
All 1MDB could provide was a letter dated 2015 from Petrosaudi to 1MDB making a claim that Good Star Limited was part of the Petrosaudi group. This letter would certainly hold no water in any court of law and the PAC would make itself a laughing stock of the world if we were to accept the letter at face value.
Hence, is the PAC Chairman questioning and challenging the authority and investigative findings of Bank Negara Malaysia?
If he is questioning the findings of Bank Negara, then why did he persistently, as recorded in the Hansard on at least 5 occasions, refused our request to call Bank Negara to testify to the PAC? Is there something that Datuk Hasan Ali is aware of, which he doesn’t want PAC members to find out?
In the light of the above, as well as the latest developments involving the complete collapse of 1MDB’s debt-asset swap agreement with IPIC, we once again call upon the PAC Chairman to call for an immediate PAC meeting and officially re-open our investigations on the troubled 1MDB. The failure to do so under the current circumstances would mean the failure of the PAC to fulfill our duties and obligations to the Parliament and the rakyat.
Tuesday, April 19, 2016
Kenyataan Media Ahli-Ahli Jawatankuasa Kira-Kira Wang Negara yang Mewakili Pihak Pembangkang Parlimen Mengenai Laporan PAC Terhadap 1MDB
1. Laporan Ketua Audit Negara Mengenai 1MDB
Kami ingin menegaskan sekali lagi supaya Pengerusi PAC memberikan jaminan bahawa Laporan Ketua Audit Negara mengenai 1MDB akan dibentangkan kepada Parlimen.
Keengganan Pengerusi PAC, Datuk Hasan Arifin untuk mengulas sebab Laporan tersebut tidak dibentangkan bersama Laporan PAC terhadap 1MDB telah menjejaskan integriti Jawatankuasa Kira-Kira Wang Negara sebagai sebuah institusi yang dipertanggungjawabkan oleh Parlimen untuk menjaga penggunaan hasil kerajaan.
Apatah lagi, Pengerusi PAC telah memberikan gambaran kepada media bahawa Laporan PAC tidak mempersalahkan Perdana Menteri, maka tiadalah keperluan lagi untuk merahsiakan Laporan Ketua Audit Negara.
2. Hansard Prosiding PAC Laporan
PAC telah mengandungi Hansard prosiding PAC yang merakamkan segala soalan, jawapan dan pembentangan oleh saksi-saksi yang dipanggil oleh jawatankuasa.
Akan tetapi, Hansard yang merekodkan
Hansard-Hansard ini merupakan rekod yang penting untuk mendapatkan gambaran yang lebih menyeluruh mengenai siasatan PAC ke atas 1MDB.
Tambahan pula, segala mesyuarat PAC merupakan mesyuarat rasmi di bawah Peraturan Mesyuarat Dewan Rakyat di mana Hansard atau buku penyata rasmi mesyuarat perlu diterbitkan.
Peraturan Mesyarat 10(1) menyebut bahawa sebuah buku penyata rasmi mesyuarat mengandungi semua ucapan-ucapan yang dikeluarkan dalam Majlis Mesyuarat dan dalam Jawatankuasa sebuah-buah Majlis Mesyuarat, hendaklah disediakan...͟
Oleh itu, kami menggesa supaya Pengerusi PAC akan menerbitkan kesemua Hansard yang tertunggak sekurang-kurangnya di dalam laman web Parlimen.
3. Perbezaan antara Laporan PAC yang diluluskan dengan Laporan PAC yang diterbitkan
Kami telah mendapati bahawa Pengerusi PAC telah membuat penyuntingan yang sirius ke atas Laporan yang telah diluluskan oleh mesyuarat PAC pada 4hb April 2016.
Laporan PAC pada mukasurat 25, menyebut bahawa berdasarkan dokumen yang dikemukakan oleh Datuk Shahrol Azral pada 5 Jun 2015 dan kenyataan beliau semasa mesyuarat Jawatankuasa Kira-Kira Wang Negara (PAC) pada 25 November 2015, akaun tersebut adalah milik Good Star Limited yang merupakan subsidiari Kumpulan PetroSaudi sejak 1 September 2009.
Akan tetapi, Pengerusi PAC telah memotong sepatah ayat lagi yang telah disetujui dalam mesyuarat. Ayat tersebut berbunyi Bank Negara Malaysia (BNM) telah dimaklum secara sukarela oleh pihak berkuasa negara berkenan bahawa Good Star Limited merupakan sebuah syarikat yang dimiliki oleh seorang individu yang tiada berkaitan dengan Kumpulan PetroSaudi.
Tindakan Pengerusi PAC untuk memotong ayat yang telah dipersetujui oleh mesyuarat PAC merupakan satu tindakan yang jelas melanggar peraturan mesyuarat dan menimbulkan kecurigaan terhadap niat Pengerusi untuk menutup kes.Datuk Hasan Arifin tidak pernah membincang perkara tersebut dengan kami, sama ada secara rasmi atau tidak rasmi.
Pada masa yang sama, atas permintaan PAC, Datuk Hasan Arifin juga memaklum bahawa beliau telah menulis surat kepada Bank Negara untuk mendapat maklumat tambahan mengenai pemilik individu tersebut. Kami belum tahu sama ada balasan daripada BNM telah diterima oleh Pengerusi.
Kami menyeru supaya Datuk Hasan Arifin memperbetulkan Laporan PAC dengan serta-merta melalui satu kertas pembetulan kepada Parlimen.
4. Pembatalan Perjanjian Debt-Asset Swap dengan IPIC
Dengan berita terbaru semalam bahawa pihak International Petroleum Investment Corporation (IPIC) telah membatalkan perjanjian debt-asset swap dengan 1MDB, kami meminta supaya Datuk Hasan Arifin akan memanggil mesyuarat PAC secepat mungkin untuk membincang perkara ini.
Ia adalah kerana 1MDB telah memberikan gambaran palsu bahawa pelan rasionalisasi syarikat telah berjalan dengan lancar dan 1MDB tidak akan memerlukan sebarang bantuan daripada kerajaan untuk menyelesaikan pinjaman-pinjamannya yang melebihi RM50 bilion.
Akan tetapi semalam, Kementerian Kewangan telah mengeluarkan kenyataan bahawa kerajaan Malaysia akan menanggung kesemua obligasi 1MDB yang tidak dapat diselesaikan oleh syarikat.
Ahli-ahli PAC Pembangkang bersedia untuk bekerjasama dengan ahli-ahli PAC penyokong kerajaan untuk mendapatkan maklumat sebenar daripada siasatan tambah terhadap 1MDB.
Dikeluarkan oleh:
Tan Seng Giaw, Timbalan Pengerusi PAC
Datuk Kamarul Baharin
William Leong
Datuk Takiyuddin Hassan
Tony Pua
Kami ingin menegaskan sekali lagi supaya Pengerusi PAC memberikan jaminan bahawa Laporan Ketua Audit Negara mengenai 1MDB akan dibentangkan kepada Parlimen.
Keengganan Pengerusi PAC, Datuk Hasan Arifin untuk mengulas sebab Laporan tersebut tidak dibentangkan bersama Laporan PAC terhadap 1MDB telah menjejaskan integriti Jawatankuasa Kira-Kira Wang Negara sebagai sebuah institusi yang dipertanggungjawabkan oleh Parlimen untuk menjaga penggunaan hasil kerajaan.
Apatah lagi, Pengerusi PAC telah memberikan gambaran kepada media bahawa Laporan PAC tidak mempersalahkan Perdana Menteri, maka tiadalah keperluan lagi untuk merahsiakan Laporan Ketua Audit Negara.
2. Hansard Prosiding PAC Laporan
PAC telah mengandungi Hansard prosiding PAC yang merakamkan segala soalan, jawapan dan pembentangan oleh saksi-saksi yang dipanggil oleh jawatankuasa.
Akan tetapi, Hansard yang merekodkan
- pembentangan dan perbincangan Laporan Ketua Audit Negara antara Jabatan Audit Negara dengan PAC
- perbincangan antara ahli-ahli PAC dan juga pegawai-pegawai kerajaan bertugas semasa menyediakan Laporan PAC
Hansard-Hansard ini merupakan rekod yang penting untuk mendapatkan gambaran yang lebih menyeluruh mengenai siasatan PAC ke atas 1MDB.
Tambahan pula, segala mesyuarat PAC merupakan mesyuarat rasmi di bawah Peraturan Mesyuarat Dewan Rakyat di mana Hansard atau buku penyata rasmi mesyuarat perlu diterbitkan.
Peraturan Mesyarat 10(1) menyebut bahawa sebuah buku penyata rasmi mesyuarat mengandungi semua ucapan-ucapan yang dikeluarkan dalam Majlis Mesyuarat dan dalam Jawatankuasa sebuah-buah Majlis Mesyuarat, hendaklah disediakan...͟
Oleh itu, kami menggesa supaya Pengerusi PAC akan menerbitkan kesemua Hansard yang tertunggak sekurang-kurangnya di dalam laman web Parlimen.
3. Perbezaan antara Laporan PAC yang diluluskan dengan Laporan PAC yang diterbitkan
Kami telah mendapati bahawa Pengerusi PAC telah membuat penyuntingan yang sirius ke atas Laporan yang telah diluluskan oleh mesyuarat PAC pada 4hb April 2016.
Laporan PAC pada mukasurat 25, menyebut bahawa berdasarkan dokumen yang dikemukakan oleh Datuk Shahrol Azral pada 5 Jun 2015 dan kenyataan beliau semasa mesyuarat Jawatankuasa Kira-Kira Wang Negara (PAC) pada 25 November 2015, akaun tersebut adalah milik Good Star Limited yang merupakan subsidiari Kumpulan PetroSaudi sejak 1 September 2009.
Akan tetapi, Pengerusi PAC telah memotong sepatah ayat lagi yang telah disetujui dalam mesyuarat. Ayat tersebut berbunyi Bank Negara Malaysia (BNM) telah dimaklum secara sukarela oleh pihak berkuasa negara berkenan bahawa Good Star Limited merupakan sebuah syarikat yang dimiliki oleh seorang individu yang tiada berkaitan dengan Kumpulan PetroSaudi.
Tindakan Pengerusi PAC untuk memotong ayat yang telah dipersetujui oleh mesyuarat PAC merupakan satu tindakan yang jelas melanggar peraturan mesyuarat dan menimbulkan kecurigaan terhadap niat Pengerusi untuk menutup kes.Datuk Hasan Arifin tidak pernah membincang perkara tersebut dengan kami, sama ada secara rasmi atau tidak rasmi.
Pada masa yang sama, atas permintaan PAC, Datuk Hasan Arifin juga memaklum bahawa beliau telah menulis surat kepada Bank Negara untuk mendapat maklumat tambahan mengenai pemilik individu tersebut. Kami belum tahu sama ada balasan daripada BNM telah diterima oleh Pengerusi.
Kami menyeru supaya Datuk Hasan Arifin memperbetulkan Laporan PAC dengan serta-merta melalui satu kertas pembetulan kepada Parlimen.
4. Pembatalan Perjanjian Debt-Asset Swap dengan IPIC
Dengan berita terbaru semalam bahawa pihak International Petroleum Investment Corporation (IPIC) telah membatalkan perjanjian debt-asset swap dengan 1MDB, kami meminta supaya Datuk Hasan Arifin akan memanggil mesyuarat PAC secepat mungkin untuk membincang perkara ini.
Ia adalah kerana 1MDB telah memberikan gambaran palsu bahawa pelan rasionalisasi syarikat telah berjalan dengan lancar dan 1MDB tidak akan memerlukan sebarang bantuan daripada kerajaan untuk menyelesaikan pinjaman-pinjamannya yang melebihi RM50 bilion.
Akan tetapi semalam, Kementerian Kewangan telah mengeluarkan kenyataan bahawa kerajaan Malaysia akan menanggung kesemua obligasi 1MDB yang tidak dapat diselesaikan oleh syarikat.
Ahli-ahli PAC Pembangkang bersedia untuk bekerjasama dengan ahli-ahli PAC penyokong kerajaan untuk mendapatkan maklumat sebenar daripada siasatan tambah terhadap 1MDB.
Dikeluarkan oleh:
Tan Seng Giaw, Timbalan Pengerusi PAC
Datuk Kamarul Baharin
William Leong
Datuk Takiyuddin Hassan
Tony Pua
Epic collapse of 1MDB-IPIC debt-asset swap deal means the entire rationalisation exercise has failed and a multi-billion dollar bailout by the Ministry of Finance is in the works
Over the past few months, the Prime Minister and his cheerleading cabinet as well as 1MDB President Arul Kanda were bragging about how successful the 1MDB rationalisation exercise was.
Arul Kanda when responding to media enquiry if he was leaving 1MDB, said “What I said was that my work was done with the successful rationalisation” on 31 March 2016.
Yesterday’s announcement by International Petroleum Investment Corporation (IPIC) which accused 1MDB of failing to honour the terms of the US$4.7 billion debt-asset swap deal proved their boasts to be ludicrously premature.This follows confirmation that US$3.51 billion of 1MDB’s funds have be siphoned to a fraudulent “Aabar Investment PJS Limited”which was established in the British Virgin Islands (BVI).
All Arul Kanda has achieved to date is to sell Edra Global at RM9.93 billion which represents a loss of RM2.27 billion as the assets were acquired for RM12.1 billion. The loss widens further if one were to take into account the dividends received versus the interest paid on loans taken for the purposes of the acquisition.
Even for the sale of 60% of Bandar Malaysia, only a refundable deposit of RM741 million is paid. The deal is only expected to be completed by June 2016. However, there is no assurance that all the terms of the deal can be met, including the purchasers ability to raise the necessary funding to pay RM7.41 billion for the 60% stake.
However, the most critical anchor to the entire rationalisation exercise – the debt-asset swap agreement with IPIC involving up to US$4.7 billion is by far the biggest component in the rationalisation plan.The US$4.7 billion included US$3.5 billion of 2012 bonds, US$1 billion of IPIC advance provided in June 2015 and up to approximately US$200 million of interest payments during the course of the year.
Its failure not only now places 1MDB itself at risk, but now involves a bailout by the Ministry of Finance (MOF).
As IPIC has clearly announced to the London Stock Exchange, “1MDB and MOF continue to be bound by their respective obligations under the terms of the Binding Term Sheet, including their continued indemnification of IPIC and Aabar for any non-performance under the Binding Term Sheet and in relation to any claims which may be made against IPIC pursuant to the guarantees entered into by IPIC in respect of certain 1MDB group bond issuances.”
This clearly means that should 1MDB fail to repay up to US$4.7 billion to IPIC and/or the bondholders, then the MOF has to fork out the difference based on the indemnity provided by the MOF in the debt asset swap agreement.
When I had pointed out this sleight of hand by 1MDB and MOF in June last year, 1MDB had angrily refuted my warnings and concerns.
“...it is irresponsible of Tony Pua to suggest that the recent binding term sheet between 1MDB and IPIC, a commercial transaction, has resulted in further guarantee obligations by the government of Malaysia,” 1MDB protested.
It appears that 1MDB could only lie about the hidden guarantee by MOF for 10 months. We now know clearly that with the spectacular failure of the debt-asset swap deal, the Malaysian tax-payers will be called upon to foot 1MDB’s bills.
The Parliamentary Public Accounts Committee has already established the fact that the Government is obligated via explicit and implicit guarantees provided for US$3.15bn and RM5.8 billion of 1MDB borrowings or approximately RM18 billion in total.
Now with the unravelling of the IPIC deal, the MOF is now exposed to another US$4.7 billion of 1MDB liabilities or approximately RM18.5 billion. Hence the rakyat’s exposure to the shenanigans in 1MDB amounts to an epic RM36.6 billion.
Dato’ Seri Najib Razak can no longer escape the need to explain the spectacular disaster that is 1MDB which has happened under his watch. He must explain how is 1MDB going to fund the immediate repayment of US$1.1 billion demanded by IPIC.
He must also explain why the Auditor-General has been unable to confirm US$7 billion of 1MDB’s transactions, cash and assets overseas due to the complete lack of cooperation from 1MDB. Or else, what is the Prime Minister really hiding?
Arul Kanda when responding to media enquiry if he was leaving 1MDB, said “What I said was that my work was done with the successful rationalisation” on 31 March 2016.
Yesterday’s announcement by International Petroleum Investment Corporation (IPIC) which accused 1MDB of failing to honour the terms of the US$4.7 billion debt-asset swap deal proved their boasts to be ludicrously premature.This follows confirmation that US$3.51 billion of 1MDB’s funds have be siphoned to a fraudulent “Aabar Investment PJS Limited”which was established in the British Virgin Islands (BVI).
All Arul Kanda has achieved to date is to sell Edra Global at RM9.93 billion which represents a loss of RM2.27 billion as the assets were acquired for RM12.1 billion. The loss widens further if one were to take into account the dividends received versus the interest paid on loans taken for the purposes of the acquisition.
Even for the sale of 60% of Bandar Malaysia, only a refundable deposit of RM741 million is paid. The deal is only expected to be completed by June 2016. However, there is no assurance that all the terms of the deal can be met, including the purchasers ability to raise the necessary funding to pay RM7.41 billion for the 60% stake.
However, the most critical anchor to the entire rationalisation exercise – the debt-asset swap agreement with IPIC involving up to US$4.7 billion is by far the biggest component in the rationalisation plan.The US$4.7 billion included US$3.5 billion of 2012 bonds, US$1 billion of IPIC advance provided in June 2015 and up to approximately US$200 million of interest payments during the course of the year.
Its failure not only now places 1MDB itself at risk, but now involves a bailout by the Ministry of Finance (MOF).
As IPIC has clearly announced to the London Stock Exchange, “1MDB and MOF continue to be bound by their respective obligations under the terms of the Binding Term Sheet, including their continued indemnification of IPIC and Aabar for any non-performance under the Binding Term Sheet and in relation to any claims which may be made against IPIC pursuant to the guarantees entered into by IPIC in respect of certain 1MDB group bond issuances.”
This clearly means that should 1MDB fail to repay up to US$4.7 billion to IPIC and/or the bondholders, then the MOF has to fork out the difference based on the indemnity provided by the MOF in the debt asset swap agreement.
When I had pointed out this sleight of hand by 1MDB and MOF in June last year, 1MDB had angrily refuted my warnings and concerns.
“...it is irresponsible of Tony Pua to suggest that the recent binding term sheet between 1MDB and IPIC, a commercial transaction, has resulted in further guarantee obligations by the government of Malaysia,” 1MDB protested.
It appears that 1MDB could only lie about the hidden guarantee by MOF for 10 months. We now know clearly that with the spectacular failure of the debt-asset swap deal, the Malaysian tax-payers will be called upon to foot 1MDB’s bills.
The Parliamentary Public Accounts Committee has already established the fact that the Government is obligated via explicit and implicit guarantees provided for US$3.15bn and RM5.8 billion of 1MDB borrowings or approximately RM18 billion in total.
Now with the unravelling of the IPIC deal, the MOF is now exposed to another US$4.7 billion of 1MDB liabilities or approximately RM18.5 billion. Hence the rakyat’s exposure to the shenanigans in 1MDB amounts to an epic RM36.6 billion.
Dato’ Seri Najib Razak can no longer escape the need to explain the spectacular disaster that is 1MDB which has happened under his watch. He must explain how is 1MDB going to fund the immediate repayment of US$1.1 billion demanded by IPIC.
He must also explain why the Auditor-General has been unable to confirm US$7 billion of 1MDB’s transactions, cash and assets overseas due to the complete lack of cooperation from 1MDB. Or else, what is the Prime Minister really hiding?
Thursday, April 14, 2016
Arul Kanda is the boy who cried wolf way too many times. Who would believe him now?
Yesterday, I asked for 1MDB President Arul Kanda to be investigated for his attempts to cover up the entire 1MDB scandal, particular over the payment of US$3.51 billion to the British Virgin Islands incorporated “Aabar Investment PJS Limited” (Aabar (BVI)).
I had cited the Public Accounts Committee proceedings as evidence that Arul Kanda was extremely coy and economical with his answers, when answering the straightforward questions of whether 1MDB paid billions to Aabar (BVI) and whether Aabar (BVI) was related to the Aabar Investment PJS of Abu Dhabi. His shocking reply then was, “as far as he was aware, it is”.
Suddenly, Arul Kanda is now trying to play the victim, protesting his innocence, “categorically and unequivocally deny any prior knowledge that Aabar BVI has been liquidated, apart from what I have read in recent press reports. I challenge YB Tony to provide proof of this malicious accusation.”
Well, Mr 1MDB President, you were publicly notified way back in September 2015 by The Wall Street Journal and other critics like myself, that International Petroleum Investment Corporation (IPIC) did not have record of any of the US$3.51 billion purportedly paid by 1MDB in its financial statements for 2014 and 2015 which were audited by Ernst & Young and published on the London Stock Exchange.
As a result, I had warned Arul Kanda and 1MDB in my many statements since September 2015 about the need for 1MDB to confirm the whereabouts of these payments to Aabar (Abu Dhabi) or its parent, IPIC. I had repeatedly asked 1MDB to issue a joint statement with IPIC to provide a consistent and clear clarification on where the US$1.4 billion “refundable deposit” collateral parked with IPIC as well as the US$993 million payment to buy back the above options from IPIC have gone to.
Instead, Arul Kanda chose to repeatedly insist that “1MDB cannot speak on behalf of Aabar or IPIC nor can we comment on the accounting arrangements of third parties”.And of course, he waxed lyrical about how there was a malicious globally coordinated campaign against 1MDB and Malaysia. Arul Kanda repeated challenged The Wall Street Journal and myself to “provide proof of this malicious accusation”.
He obviously didn’t care at all if the US$1.4 billion or the US$993 million is possibly missing then.
Worse, Arul Kanda was in constant and direct communications with IPIC since his appointment as the President of the company, including the on-going debt-asset swap arrangement which was signed with IPIC in May 2015 which is due to be completed in June 2016.
Now that it has indeed been proven that the money has gone missing, Arul Kanda turns around and says “Ooops! Honest to God, I wasn’t aware that Aabar Investment PJS Limited wasn’t related to IPIC and didn’t know that it has already been dissolved nearly a year ago
in June 2015.” (my paraphrase). True to form, he challenged me “to provide proof of this malicious accusation”.
Further to that, he is now hinting that 1MDB might be a victim of a scam.
Sorry Arul, your cry wolf days are over. Nobody believes you any more. Not even BN MP Bung Mokhtar who has called for the police to conduct a criminal investigation against 1MDB to trace the missing funds.
And if indeed, you are really innocent, that you didn’t know that 1MDB parked billions of dollars to a company which has ceased to exist, that Aabar (BVI) was not related to IPIC, that a massive fraud might have taken place throughout your entire 14 months in 1MDB, then you should be sacked anyway for being utterly stupid, negligent and incompetent.
Perhaps 1MDB should even consider charging you for misrepresentation on your resume as a “top investment banker” and “debt-restructuring expert”.
I had cited the Public Accounts Committee proceedings as evidence that Arul Kanda was extremely coy and economical with his answers, when answering the straightforward questions of whether 1MDB paid billions to Aabar (BVI) and whether Aabar (BVI) was related to the Aabar Investment PJS of Abu Dhabi. His shocking reply then was, “as far as he was aware, it is”.
Suddenly, Arul Kanda is now trying to play the victim, protesting his innocence, “categorically and unequivocally deny any prior knowledge that Aabar BVI has been liquidated, apart from what I have read in recent press reports. I challenge YB Tony to provide proof of this malicious accusation.”
Well, Mr 1MDB President, you were publicly notified way back in September 2015 by The Wall Street Journal and other critics like myself, that International Petroleum Investment Corporation (IPIC) did not have record of any of the US$3.51 billion purportedly paid by 1MDB in its financial statements for 2014 and 2015 which were audited by Ernst & Young and published on the London Stock Exchange.
As a result, I had warned Arul Kanda and 1MDB in my many statements since September 2015 about the need for 1MDB to confirm the whereabouts of these payments to Aabar (Abu Dhabi) or its parent, IPIC. I had repeatedly asked 1MDB to issue a joint statement with IPIC to provide a consistent and clear clarification on where the US$1.4 billion “refundable deposit” collateral parked with IPIC as well as the US$993 million payment to buy back the above options from IPIC have gone to.
Instead, Arul Kanda chose to repeatedly insist that “1MDB cannot speak on behalf of Aabar or IPIC nor can we comment on the accounting arrangements of third parties”.And of course, he waxed lyrical about how there was a malicious globally coordinated campaign against 1MDB and Malaysia. Arul Kanda repeated challenged The Wall Street Journal and myself to “provide proof of this malicious accusation”.
He obviously didn’t care at all if the US$1.4 billion or the US$993 million is possibly missing then.
Worse, Arul Kanda was in constant and direct communications with IPIC since his appointment as the President of the company, including the on-going debt-asset swap arrangement which was signed with IPIC in May 2015 which is due to be completed in June 2016.
Now that it has indeed been proven that the money has gone missing, Arul Kanda turns around and says “Ooops! Honest to God, I wasn’t aware that Aabar Investment PJS Limited wasn’t related to IPIC and didn’t know that it has already been dissolved nearly a year ago
in June 2015.” (my paraphrase). True to form, he challenged me “to provide proof of this malicious accusation”.
Further to that, he is now hinting that 1MDB might be a victim of a scam.
Sorry Arul, your cry wolf days are over. Nobody believes you any more. Not even BN MP Bung Mokhtar who has called for the police to conduct a criminal investigation against 1MDB to trace the missing funds.
And if indeed, you are really innocent, that you didn’t know that 1MDB parked billions of dollars to a company which has ceased to exist, that Aabar (BVI) was not related to IPIC, that a massive fraud might have taken place throughout your entire 14 months in 1MDB, then you should be sacked anyway for being utterly stupid, negligent and incompetent.
Perhaps 1MDB should even consider charging you for misrepresentation on your resume as a “top investment banker” and “debt-restructuring expert”.
Let PAC Hansard be the judge of whether 1MDB broke-even or suffered a massive loss from the US$9.83 billion sale of Edra Global
Two days ago, 1MDB said its President, “Mr Arul Kanda has delivered major asset sales and repaid all short term debt/bank debt, with 1MDB now having RM2.3 billion cash in the bank. The company has also recently repaid the RM950 million standby credit facility from the Government of Malaysia. Even YB Tony has no choice but to admit this success, against all odds.”
I responded that perhaps, Mr Arul Kanda has forgotten that he has been forced to admit that the power plant assets which were acquired for RM12.1 billion was sold for a loss at RM9.83 billion. The proceeds was used to pay off RM950 million of the Federal Government’s emergency loan granted last year. However, US$3.5 billion (RM13.6 billion) worth of bonds which were raised to purchase these power plants remains outstanding!
I added that I am flabbergasted by Arul Kanda’s definition of “success, against all odds”.
Mr Arul Kanda is upset at being told the truth. He now says I have “conveniently forget(ten) to mention that whilst 1MDB purchased the power assets at approximately RM12 billion and sold it at RM9.83 billion, the company also received approximately RM2 billion in cash dividends during the period of ownership, which totals RM11.83 billion i.e. a cash-on-cash, near "break-even" position. YB Tony knew this fact, as recorded in the Hansard of my explanation during the PAC proceedings, yet he chose to hide it and mislead the Malaysian public.”
Hence I have attached 2 pages of the relevant proceeding from the Hansard with regards to the above.
As can be read, I had reminded Arul Kanda, and the BN MPs present, that if you chose to take into consideration the purported RM2 billion dividends, then you must similarly take into consideration the cost of the loans taken to acquire these power plants.
In turn, Arul Kanda responded that
Any businessman or accountant, upon hearing the above arguments from Arul Kanda will be laughing their pants off. He conceded that I was correct in my “proper accounting”
calculations because interest costs amounting to a whopping RM3.5 billion or more must be taken into account if 1MDB were to take into account the dividends.
However, no one would understand what the heck is Arul Kanda’s “cash on cash breakeven”argument. Did he mean that cash used to service interest cost isn't "cash"?
Worse, I decided to re-check the audited accounts of 1MDB and it’s Edra subsidiaries for 2013 and 2014 - the Edra power plants never paid a single sen of dividend to 1MDB, the parent holding company!
I almost feel really bad heaping so much embarrassment upon the besieged 1MDB President who is spinning out of control.Let me repeat myself, I am truly flabbergasted by Arul Kanda’s definition of “success, against all odds”.
I responded that perhaps, Mr Arul Kanda has forgotten that he has been forced to admit that the power plant assets which were acquired for RM12.1 billion was sold for a loss at RM9.83 billion. The proceeds was used to pay off RM950 million of the Federal Government’s emergency loan granted last year. However, US$3.5 billion (RM13.6 billion) worth of bonds which were raised to purchase these power plants remains outstanding!
I added that I am flabbergasted by Arul Kanda’s definition of “success, against all odds”.
Mr Arul Kanda is upset at being told the truth. He now says I have “conveniently forget(ten) to mention that whilst 1MDB purchased the power assets at approximately RM12 billion and sold it at RM9.83 billion, the company also received approximately RM2 billion in cash dividends during the period of ownership, which totals RM11.83 billion i.e. a cash-on-cash, near "break-even" position. YB Tony knew this fact, as recorded in the Hansard of my explanation during the PAC proceedings, yet he chose to hide it and mislead the Malaysian public.”
Hence I have attached 2 pages of the relevant proceeding from the Hansard with regards to the above.
As can be read, I had reminded Arul Kanda, and the BN MPs present, that if you chose to take into consideration the purported RM2 billion dividends, then you must similarly take into consideration the cost of the loans taken to acquire these power plants.
In turn, Arul Kanda responded that
“I think apa yang Yang Berhormat Petaling Jaya Utara katakan adalah betul daripada segi accounting disebabkan the rules of accounting, you have to treat certain expenses in a certain way and dividend in certain way.
Akan tetapi kalau kita lihat dari segi cash on cash, maknanya kita masukkan RM12 bilion cash equity. Kita dapat balik RM9.83 bilion cash equity dan juga kami telah terima lebih kurang RM2 bilion cash dividend. Maknanya cash on cash breakeven.
Akan tetapi accounting treatment Yang Berhormat Petaling Jaya Utara betul. The accounting treatment is your dividend goes out because you are paying interest. So, the cost of interest is a loss to the company.”
Any businessman or accountant, upon hearing the above arguments from Arul Kanda will be laughing their pants off. He conceded that I was correct in my “proper accounting”
calculations because interest costs amounting to a whopping RM3.5 billion or more must be taken into account if 1MDB were to take into account the dividends.
However, no one would understand what the heck is Arul Kanda’s “cash on cash breakeven”argument. Did he mean that cash used to service interest cost isn't "cash"?
Worse, I decided to re-check the audited accounts of 1MDB and it’s Edra subsidiaries for 2013 and 2014 - the Edra power plants never paid a single sen of dividend to 1MDB, the parent holding company!
I almost feel really bad heaping so much embarrassment upon the besieged 1MDB President who is spinning out of control.Let me repeat myself, I am truly flabbergasted by Arul Kanda’s definition of “success, against all odds”.
Tuesday, April 12, 2016
Although not involved in 1MDB-IPIC-Aabar multi-billion dollar scam, Arul Kanda can't deny role in cover-up of this heinous scandal
It appears now that Arul Kanda is already taking steps to clear himself of any wrongdoing in the light of the disclosure by Abu Dhabi’s International Petroleum Investment Corporation (IPIC) that it does not own “Aabar Investment PJS Limited”, which was set up in the British Virgin Islands ‘Aabar (BVI)’ .
1MDB in the same statement yesterday, said it is “wrong and unprofessional of YB Tony to personalise this issue by linking it to Mr. Arul Kanda. It is clear that each of these transfers happened before Mr. Arul Kanda assumed his role at 1MDB, therefore he can only rely on what the company records show, in formulating his answers.”
Indeed, no one is claiming that Arul Kanda signed the agreements and paid US$3.51 billion to the ficticious Aabar (BVI). But Arul Kanda was fully aware of the fake BVI, and hence had refused since the allegation arose last year to answer any questions on the status of Aabar (BVI).
Now that the Hansard of the Public Accounts Committee’s 1MDB proceedings has been made public, Malaysians can read for themselves how Arul Kanda twisted and turned to avoid directly answering the question as to who are the owners of Aabar (BVI).
On 18th of December 2015, I had asked Arul Kanda the pointed question – “Is it true the allegations that the payment was made to an Aabar Investments PJS Limited which was set up in perhaps BVI or Seychelles, which is unrelated to Aabar itself?” (see the relevant page of the Hansard attached)
Arul Kanda, in a magnificent series of somersaults in his attempt to squirm his way out of giving a straightforward answer to the question. First he went around the world blaming the Wall Street Journal, the Financial Times, the Sarawak Report and even leaks from the Auditor-General Report for a “clear campaign against 1MDB and the government, started on the 2nd of July... with the revelation of confidential banking transactions of the Prime Minister”.
When he was finally forced to concede that 1MDB had indeed made agreements and payments to Aabar (BVI), I asked whether “Aabar Investments PJS Limited was related to Aabar Investments PJS of Abu Dhabi?”
The best answer he could give was “As far as we are aware, yes”. I then pointed out to him that “we made an agreement with them we should know whether they are or they are not, cannot be ‘as far as we are aware’.”
Again, he twisted and turned without addressing the underlying major concern that 1MDB has paid billions of dollars to a company, which 1MDB's President and CEO was unable to confirm with any certainty that the companies are related.
This only goes to prove that Arul Kanda knew at all times of the entire scam and hid those information from the Auditor-General and the PAC, hoping that we will turn a blind eye on the matter.
1MDB has lost at least US$3.5 billion (RM14 billion) since Aabar Investment PJS Limited was wound up in June 2015
The most damning evidence however of Arul Kanda knowing that 1MDB has paid billions of dollars to a fictitious Aabar (BVI) is the fact that Aabar (BVI) as disclosed by IPIC, based on public information, has already been wound up 10 months ago in June 2015!
How can Arul Kanda not know that the US$1.367 billion of “refundable security deposit”, US$993 million of “refundable options termination payment” and an additional US$1.15 billion of “top-up security deposit” have been paid to a company which have already ceased to exist!
In fact, all the 1MDB agreements signed with Aabar (BVI) as disclosed by the Auditor-General and the PAC, are now completely void.
The announcement made by IPIC on the London Stock Exchange has confirmed without a doubt that not only is the US$3.51 billion above unaccounted for, the money is definitely “missing”, as we have suspected all these while.
The question now is why did Arul Kanda hide these information from Malaysians and failed to institute actions against the relevant parties in the obscene scam, including 1MDB officials, the fake Aabar (BVI) and its officers, since Arul’s appointment was in January 2015, 6 months before Aabar (BVI) was liquidated. If he hid these crucial information, then he must be investigated for being an accessory to the entire scam.
1MDB in the same statement yesterday, said it is “wrong and unprofessional of YB Tony to personalise this issue by linking it to Mr. Arul Kanda. It is clear that each of these transfers happened before Mr. Arul Kanda assumed his role at 1MDB, therefore he can only rely on what the company records show, in formulating his answers.”
Indeed, no one is claiming that Arul Kanda signed the agreements and paid US$3.51 billion to the ficticious Aabar (BVI). But Arul Kanda was fully aware of the fake BVI, and hence had refused since the allegation arose last year to answer any questions on the status of Aabar (BVI).
Now that the Hansard of the Public Accounts Committee’s 1MDB proceedings has been made public, Malaysians can read for themselves how Arul Kanda twisted and turned to avoid directly answering the question as to who are the owners of Aabar (BVI).
On 18th of December 2015, I had asked Arul Kanda the pointed question – “Is it true the allegations that the payment was made to an Aabar Investments PJS Limited which was set up in perhaps BVI or Seychelles, which is unrelated to Aabar itself?” (see the relevant page of the Hansard attached)
Arul Kanda, in a magnificent series of somersaults in his attempt to squirm his way out of giving a straightforward answer to the question. First he went around the world blaming the Wall Street Journal, the Financial Times, the Sarawak Report and even leaks from the Auditor-General Report for a “clear campaign against 1MDB and the government, started on the 2nd of July... with the revelation of confidential banking transactions of the Prime Minister”.
When he was finally forced to concede that 1MDB had indeed made agreements and payments to Aabar (BVI), I asked whether “Aabar Investments PJS Limited was related to Aabar Investments PJS of Abu Dhabi?”
The best answer he could give was “As far as we are aware, yes”. I then pointed out to him that “we made an agreement with them we should know whether they are or they are not, cannot be ‘as far as we are aware’.”
Again, he twisted and turned without addressing the underlying major concern that 1MDB has paid billions of dollars to a company, which 1MDB's President and CEO was unable to confirm with any certainty that the companies are related.
This only goes to prove that Arul Kanda knew at all times of the entire scam and hid those information from the Auditor-General and the PAC, hoping that we will turn a blind eye on the matter.
1MDB has lost at least US$3.5 billion (RM14 billion) since Aabar Investment PJS Limited was wound up in June 2015
The most damning evidence however of Arul Kanda knowing that 1MDB has paid billions of dollars to a fictitious Aabar (BVI) is the fact that Aabar (BVI) as disclosed by IPIC, based on public information, has already been wound up 10 months ago in June 2015!
How can Arul Kanda not know that the US$1.367 billion of “refundable security deposit”, US$993 million of “refundable options termination payment” and an additional US$1.15 billion of “top-up security deposit” have been paid to a company which have already ceased to exist!
In fact, all the 1MDB agreements signed with Aabar (BVI) as disclosed by the Auditor-General and the PAC, are now completely void.
The announcement made by IPIC on the London Stock Exchange has confirmed without a doubt that not only is the US$3.51 billion above unaccounted for, the money is definitely “missing”, as we have suspected all these while.
The question now is why did Arul Kanda hide these information from Malaysians and failed to institute actions against the relevant parties in the obscene scam, including 1MDB officials, the fake Aabar (BVI) and its officers, since Arul’s appointment was in January 2015, 6 months before Aabar (BVI) was liquidated. If he hid these crucial information, then he must be investigated for being an accessory to the entire scam.
How is the disposal of overpriced assets at a loss a "success, against all odds"?
I had to shake my head in sheer disbelief with 1MDB boasted of its recent achievement in repaying RM950 million of its debt to the Government with proceeds from assets which were sold at a substantial loss.
Yesterday, 1MDB said its President, “Mr Arul Kanda has delivered major asset sales and repaid all short term debt/bank debt, with 1MDB now having RM2.3 billion cash in the bank. The company has also recently repaid the RM950 million standby credit facility from the Government of Malaysia. Even YB Tony has no choice but to admit this success, against all odds.”
I am left speechless that Mr Arul Kanda, a so-called top investment banker and debt-restructuring expert can shower himself with such hugely undeserved praise.
Perhaps, Mr Arul Kanda has forgotten that he has been forced to admit that the power plant assets which were acquired for RM12.1 billion were sold for a loss at RM9.83 billion. The proceeds was used to pay off RM950 million of the Federal Government’s emergency loan granted last year. However, US$3.5 billion (RM13.6 billion) worth of bonds which were raised to purchase these power plants remains outstanding!
So Mr Arul Kanda’s achievement was to dispose of overpriced power plants at a loss, and leave 1MDB with a gaping hole of US$3.5 billion of related-debts in 1MDB’s books, with no assets left to pay back.
I have “no choice” but to admit that I am flabbergasted by Arul Kanda’s definition of “success, against all odds”.
Yesterday, 1MDB said its President, “Mr Arul Kanda has delivered major asset sales and repaid all short term debt/bank debt, with 1MDB now having RM2.3 billion cash in the bank. The company has also recently repaid the RM950 million standby credit facility from the Government of Malaysia. Even YB Tony has no choice but to admit this success, against all odds.”
I am left speechless that Mr Arul Kanda, a so-called top investment banker and debt-restructuring expert can shower himself with such hugely undeserved praise.
Perhaps, Mr Arul Kanda has forgotten that he has been forced to admit that the power plant assets which were acquired for RM12.1 billion were sold for a loss at RM9.83 billion. The proceeds was used to pay off RM950 million of the Federal Government’s emergency loan granted last year. However, US$3.5 billion (RM13.6 billion) worth of bonds which were raised to purchase these power plants remains outstanding!
So Mr Arul Kanda’s achievement was to dispose of overpriced power plants at a loss, and leave 1MDB with a gaping hole of US$3.5 billion of related-debts in 1MDB’s books, with no assets left to pay back.
I have “no choice” but to admit that I am flabbergasted by Arul Kanda’s definition of “success, against all odds”.
The House of Cards have started to collapse - 1MDB paid at least US$3.51 billion to Aabar BVI which is unrelated to IPIC
Abu Dhabi’s state-owned International Petroleum Investment Company (IPIC) today said neither itself nor its unit Aabar Investments PJS have any links to a British Virgin Islands-incorporated firm named “Aabar Investment PJS Limited” (Aabar BVI).
“Both IPIC and Aabar confirm that Aabar BVI was not an entity within either corporate group... Further, both IPIC and Aabar confirm that neither has received any payments from Aabar BVI nor has IPIC or Aabar assumed any liabilities on behalf of Aabar BVI.” IPIC said in a statement on the London Stock Exchange.
This is a shocking announcement because it has finally confirmed what critics of 1MDB has suspected all along, that 1MDB has been making billions of dollar of payments to a fictitious Aabar BVI, pretending that it was payments to the real Aabar of Abu Dhabi.
The recently tabled PAC Report also confirmed that the Auditor-General was unable to verify these payments to Aabar BVI, which included US$1.367 billion in “refundable security deposits” paid in 2012 which was to act as a collateral for the US$3.5 billion bond guarantee provided by IPIC. Subsequently, 1MDB paid US$993 million to terminate the options granted to Aabar BVI, as well as a further US$855 million and US$295 million as unexplained “top up security deposits”.
The Auditor-General also lamented that 1MDB not only did not provide any bank statements of its foreign bank accounts, it failed to provide any documentary evidence of who are the owners of Aabar BVI.
It is clear now that 1MDB was never able to provide the proof of ownership of Aabar BVI, because Aabar BVI is clearly a fake entity created to siphon the US$3.51 billion or more from 1MDB.
The Wall Street Journal had earlier also alleged that the Dato’ Seri Najib Razak has received US$681 million from Aabar BVI via intermediaries, which the Prime Minister claims was a donation.
In addition, the Wall Street Journal also alleged that Red Granite Pictures which produced “The Wolf of Wall Street” received US$155 million of funding, directly and indirectly from Aabar BVI.
1MDB had issued an immediate response to IPIC’s announcement claiming that it “finds it curious that IPIC and Aabar have waited until April 2016 to issue such a statement”. However, the timing of IPIC’s announcement isn’t surprising because Reuters have recently reported that 2 key former IPIC and Aabar officials, Khadem Al Qubaisi and Mohamed Badawy Al Husseiny have been arrested by the Abu Dhabi authorities.
Malaysians are actually more “curious” why 1MDB paying billions of dollars to the fake Aabar. We are also curious why it has taken so long for 1MDB to finally admit to the
misappropriation since the matter was exposed by the Wall Street Journal in November last year.
Despite repeated questions by the global media and critics like myself, the President of 1MDB, Arul Kanda had stubbornly refused to address the question of who really owns Aabar BVI. Instead, he chose to repeatedly recycle the allegations that we are part of a global malicious conspiracy aiming to discredit 1MDB and the Malaysian Government.
Arul Kanda’s refusal to provide a straight answer to earlier questions only goes to prove that he was fully aware that 1MDB had signed agreements and paid billions of dollars to a fake Aabar BVI which was completely unrelated to IPIC. It also means that Arul Kanda and 1MDB have deceived the Auditor-General and the PAC by their failure to disclose and explain the truth during the investigations.
Hence it is crystal clear that there are parties in 1MDB who have acted in cahoots with IPIC’s former top officials to scam Malaysians of billions of dollar. 1MDB had borrowed US$3.5 billion with the guarantee provided by IPIC for the purpose of acquiring power companies in Malaysia. However, the entire sum and more have been clearly embezzled to an entity, Aabar Investment PJS Ltd, whose real beneficial ownership remains a mystery till today.
Malaysians have had enough of lies from Arul Kanda and 1MDB. We demand that the Royal Malaysian Police act immediately to investigate and arrest all parties involved in this massive scam, aptly termed “the Heist of the Century” by the Sarawak Report.
“Both IPIC and Aabar confirm that Aabar BVI was not an entity within either corporate group... Further, both IPIC and Aabar confirm that neither has received any payments from Aabar BVI nor has IPIC or Aabar assumed any liabilities on behalf of Aabar BVI.” IPIC said in a statement on the London Stock Exchange.
This is a shocking announcement because it has finally confirmed what critics of 1MDB has suspected all along, that 1MDB has been making billions of dollar of payments to a fictitious Aabar BVI, pretending that it was payments to the real Aabar of Abu Dhabi.
The recently tabled PAC Report also confirmed that the Auditor-General was unable to verify these payments to Aabar BVI, which included US$1.367 billion in “refundable security deposits” paid in 2012 which was to act as a collateral for the US$3.5 billion bond guarantee provided by IPIC. Subsequently, 1MDB paid US$993 million to terminate the options granted to Aabar BVI, as well as a further US$855 million and US$295 million as unexplained “top up security deposits”.
The Auditor-General also lamented that 1MDB not only did not provide any bank statements of its foreign bank accounts, it failed to provide any documentary evidence of who are the owners of Aabar BVI.
It is clear now that 1MDB was never able to provide the proof of ownership of Aabar BVI, because Aabar BVI is clearly a fake entity created to siphon the US$3.51 billion or more from 1MDB.
The Wall Street Journal had earlier also alleged that the Dato’ Seri Najib Razak has received US$681 million from Aabar BVI via intermediaries, which the Prime Minister claims was a donation.
In addition, the Wall Street Journal also alleged that Red Granite Pictures which produced “The Wolf of Wall Street” received US$155 million of funding, directly and indirectly from Aabar BVI.
1MDB had issued an immediate response to IPIC’s announcement claiming that it “finds it curious that IPIC and Aabar have waited until April 2016 to issue such a statement”. However, the timing of IPIC’s announcement isn’t surprising because Reuters have recently reported that 2 key former IPIC and Aabar officials, Khadem Al Qubaisi and Mohamed Badawy Al Husseiny have been arrested by the Abu Dhabi authorities.
Malaysians are actually more “curious” why 1MDB paying billions of dollars to the fake Aabar. We are also curious why it has taken so long for 1MDB to finally admit to the
misappropriation since the matter was exposed by the Wall Street Journal in November last year.
Despite repeated questions by the global media and critics like myself, the President of 1MDB, Arul Kanda had stubbornly refused to address the question of who really owns Aabar BVI. Instead, he chose to repeatedly recycle the allegations that we are part of a global malicious conspiracy aiming to discredit 1MDB and the Malaysian Government.
Arul Kanda’s refusal to provide a straight answer to earlier questions only goes to prove that he was fully aware that 1MDB had signed agreements and paid billions of dollars to a fake Aabar BVI which was completely unrelated to IPIC. It also means that Arul Kanda and 1MDB have deceived the Auditor-General and the PAC by their failure to disclose and explain the truth during the investigations.
Hence it is crystal clear that there are parties in 1MDB who have acted in cahoots with IPIC’s former top officials to scam Malaysians of billions of dollar. 1MDB had borrowed US$3.5 billion with the guarantee provided by IPIC for the purpose of acquiring power companies in Malaysia. However, the entire sum and more have been clearly embezzled to an entity, Aabar Investment PJS Ltd, whose real beneficial ownership remains a mystery till today.
Malaysians have had enough of lies from Arul Kanda and 1MDB. We demand that the Royal Malaysian Police act immediately to investigate and arrest all parties involved in this massive scam, aptly termed “the Heist of the Century” by the Sarawak Report.
Monday, April 11, 2016
Kenyataan Majlis Pimpinan Tertinggi Pakatan Harapan mengenai Laporan PAC Terhadap 1MDB
- PH menyeru supaya Jawatankuasa Kira-Kira Wang Negara (PAC) membentangkan Laporan Ketua Audit Negara secara serta-merta kepada Parlimen. PH percaya bahawa kalau pihak Menteri-Menteri Barisan Nasional tidak percaya 1MDB dan Dato’ Seri Najib Razak tidak bersalah, memang tiada keperluan supaya Laporan Ketua Audit Negara dirahsiakan dan disembunyikan daripada ahli-ahli Parlimen.
- PH mengetuk 1MDB kerana tidak memberikan kerjasama kepada Jabatan Audit Negara (JAN) dan gagal menyerahkan dokumen-dokumen penting seperti penyata bank, salinan perjanjian dan bukti pemilikan syarikat-syarikat berkenan kepadanya.
- PH memahami bahawa tanpa dokumen-dokumen tersebut, pihak Ketua Audit Negara tidak dapat mengesahkan transaksi, wang tunai dan asset 1MDB sejumlah US$7 bilion yang disimpan di luar negeri. Jumlah ini adalah termasuk US$1.03 bilion yang dibayar kepada Good Star Limited dan US$3.51 bilion yang dibayar kepada Aabar Investment PJS Limited. Ketua Audit Negara memaklumkan bahawa beliau tidak dapat mengesahkan pemilik saham sebenar syarikat-syarikat ini.
- PH kecewa pihak Menteri Kewangan gagal mengarahkan 1MDB untuk bekerjasama penuh dengan JAN dan PAC. Kegagalan tersebut telah menjadi kekangan kepada JAN dan PAC untuk menyiapkan siasatan secara menyeluruh, termasuk siasat sama ada US$681 juta yang dideposit kedalam akaun peripadi Perdana Menteri berpunca daripada 1MDB.
- PH juga mendapat bahawa Ketua Setiausaha Perbendaharaan, Tan Sri Irwan Serigar telah memberi keterangan bahawa Kementerian Kewangan langsung tidak terlibat dalam segala keputusan dalam 1MDB dan segalanya diluluskan secara langsung oleh pihak Perdana Menteri. Perkara ini juga telah disahkan oleh Jabatan Audit Negara bahawa Artikel 117 Lembaga Penubuhan Syarikat memberikan kuasa mutlak kepada Perdana Menteri. Oleh sebab itu, adalah jelas bahawa Dato’ Seri Najib Razak perlu bertanggungjawab kepada segala masalah, penyalahguna kuasa dan penyelewenganyang telah berlaku dalam 1MDB.
- Setelah mengaji Laporan PAC dan Hansard yang dikemukakan, PH berkepastian bahawa PAC tidak pernah membincang dan membuat sebarang keputusan yangmendapati bahawa Dato’ Seri Najib Razak tidak bersalah.
- PH menyeru supaya pihak berkuasa, termasuk Polis Diraja Negara (PDRM) dan Suruhanjaya Pencegah Rasuah Malaysia (SPRM) mengambil tindakan terhadap Datuk Shahrol Halmi dan lain-lain yang berkaitan atas penemuan-penemuan PAC dan Ketua Audit Negara, termasuk jumlah US$7 bilion yang tidak dapat disahkan.
Damning PAC Report on 1MDB arrived at via consensus and represents unanimous decision by all members based on AG's findings
In an original news report by Bernama yesterday, the PAC Chairman Datuk Hasan Arifin was reported to have called me “annoying” and labelled me a “political opportunist”. However, the news story has since been edited upon the instruction from Datuk Hasan Arifin because he claimed he had never used such terms before to describe anyone.
In this particular instance, I verily believe him as he made the extra effort to inform all PAC Members of this misreporting by Bernama. The article has since been corrected late yesterday evening.
However, the above incident has only made it clear that there are powerful forces behind the scenes attempting to take control of the narrative via official news government and UMNO-controlled news sources like Bernama, the News Straits Times (NST) and Utusan Malaysia. It appears that someone has put words into the mouth of the PAC Chairman specifically to conduct a character assassination exercise.
In fact, the newspaper headlines of the NST and Utusan Malaysia makes for surreal reading for those who have actually read the PAC Report. Instead of reporting that the critics of 1MDB were vindicated by the PAC Report, the NST screamed on its front page that the Prime Minister, Dato’ Seri Najib Razak was “vindicated”. Utusan Malaysia followed up with the call for all critics to apologise to the Prime Minister.
Then you have 1MDB claiming that I’m now “backtracking” from the findings of the PAC Report which was arrived at with the full consensus of all members of the committee. Are these people living in an alternate reality or are they mere doing their utmost to paint what is incontrovertibly “black” as “white”?
Let me put it on record that the PAC Report was arrived on consensus and I have stated that on day one. However, it appears that the 1MDB, NST, Utusan Malaysia, the Prime Minister and his band of BN leaders have a different copy of the PAC Report from the one which was tabled in Parliament.
The consensus version of the PAC Report which was published in Parliament last Thursday
Dato’ Seri Najib’s involvement was also the reason why the PAC has agreed by consensus, that Article 117 of 1MDB’s M&A which grants the Prime Minister such powers, be abolished, together with the Board of Adviors, which he chairs.
Anyone who had read the 106-page PAC Report as well as the accompanying transcripts of PAC proceedings would not be able to find any other deliberation on the role and culpability of the Prime Minister. Without the necessary bank statements and authentication documents from 1MDB, the PAC could not possibly “clear” the Prime Minister, even if we had wanted to.
Therefore, at no point in time have I “backtracked” from the PAC Report as 1MDB desperately accused. I have stated that I’m 80% satisfied with the report because the PAC could have done more to uncover the discrepancies cited in the Report which remains a mystery, including the summoning of additional key witnesses.
However, despite the lack of completeness in the report, based on information made available, the PAC Report was already able to arrive at the sufficiently damning findings and conclusions. That is the bipartisan consensus in the PAC.
In this particular instance, I verily believe him as he made the extra effort to inform all PAC Members of this misreporting by Bernama. The article has since been corrected late yesterday evening.
However, the above incident has only made it clear that there are powerful forces behind the scenes attempting to take control of the narrative via official news government and UMNO-controlled news sources like Bernama, the News Straits Times (NST) and Utusan Malaysia. It appears that someone has put words into the mouth of the PAC Chairman specifically to conduct a character assassination exercise.
In fact, the newspaper headlines of the NST and Utusan Malaysia makes for surreal reading for those who have actually read the PAC Report. Instead of reporting that the critics of 1MDB were vindicated by the PAC Report, the NST screamed on its front page that the Prime Minister, Dato’ Seri Najib Razak was “vindicated”. Utusan Malaysia followed up with the call for all critics to apologise to the Prime Minister.
Then you have 1MDB claiming that I’m now “backtracking” from the findings of the PAC Report which was arrived at with the full consensus of all members of the committee. Are these people living in an alternate reality or are they mere doing their utmost to paint what is incontrovertibly “black” as “white”?
Let me put it on record that the PAC Report was arrived on consensus and I have stated that on day one. However, it appears that the 1MDB, NST, Utusan Malaysia, the Prime Minister and his band of BN leaders have a different copy of the PAC Report from the one which was tabled in Parliament.
The consensus version of the PAC Report which was published in Parliament last Thursday
- Confirmed that the Auditor-General (AG) could not verify at least US$7 billion of 1MDB’s cash and assets overseas comprising of:
- US$1.03 billion meant for 1MDB Petrosaudi Limited but was instead transferred to Good Star Limited
- US$3.51 billion transferred to Aabar Investment PJS Limited for “refundable deposit”, “option termination” and “top-up security”.
- US$940 million in purported “units” held in BSI Bank, Singapore
- US$1.56 billion of 1MDB Global Investment Limited investments in various funds overseas
- Confirmed that the Auditor-General could not verify the ownership of Good Star Limited and Aabar Investment PJS Limited
- Confirmed that 1MDB has obstructed investigations by refusing to cooperate by handing over its overseas bank statements and that of its overseas subsidiaries, as well as other relevant documents, despite multiple deadlines by the AG and the PAC.
- Confirmed that Dato’ Seri Najib Razak’s written approval was necessary for all key appointments in and major transactions by 1MDB, including the US$1.83 billion Petrosaudi investments and its disposal, the US$6.5 billion bond issuances, the RM12.1 billion power plant acquisitions as well as the sacking of 1MDB’s external auditors, KPMG and Ernst & Young.
Dato’ Seri Najib’s involvement was also the reason why the PAC has agreed by consensus, that Article 117 of 1MDB’s M&A which grants the Prime Minister such powers, be abolished, together with the Board of Adviors, which he chairs.
Anyone who had read the 106-page PAC Report as well as the accompanying transcripts of PAC proceedings would not be able to find any other deliberation on the role and culpability of the Prime Minister. Without the necessary bank statements and authentication documents from 1MDB, the PAC could not possibly “clear” the Prime Minister, even if we had wanted to.
Therefore, at no point in time have I “backtracked” from the PAC Report as 1MDB desperately accused. I have stated that I’m 80% satisfied with the report because the PAC could have done more to uncover the discrepancies cited in the Report which remains a mystery, including the summoning of additional key witnesses.
However, despite the lack of completeness in the report, based on information made available, the PAC Report was already able to arrive at the sufficiently damning findings and conclusions. That is the bipartisan consensus in the PAC.
Kenyataan Media Ahli-Ahli Jawatankuasa Kira-Kira Wang Negara yang Mewakili Pihak Pembangkang Parlimen Mengenai Laporan PAC Terhadap 1MDB
1. Laporan Ketua Audit Negara Mengenai 1MDB
Kami terkejut dan merasa kecewa apabila Laporan Ketua Audit Negara tidak dibentangkan kepada Parlimen bersama dengan Laporan Jawatankuasa Kira-Kira Wang Negara (PAC) berkenan syarikat 1Malaysia Development Bhd. Kesimpulan PAC adalah berdasarkan Laporan Ketua Audit Negara, maka untuk memahami dan mendapat gambaran yang lebih teliti, rujukan perlu dibuat kepada Laporan tersebut.
Pengerusi PAC Datuk Hasan Arifin tidak pernah membangkitkan isu ini dalam mesyuarat PAC walaupun secara konvensyen, Laporan Ketua Audit Negara dibentangkan bersama Laporan PAC.
Lagipun, Pengerusi PAC telah memberi pengumuman awam di mana beliau menegaskan bahawa Laporan Ketua Audit Negara dirahsiakan sehingga Laporan PAC dibentangkan kepada Parlimen.
Ketua Audit Negara, Tan Sri Ambrin Buang juga telah menerangkan kepada ahli-ahli PAC bahawa tindakan merahsiakan Laporan beliau adalah hanya untuk mengelakkan pendedahan maklumat kepada umum sebelum Laporan PAC disiapkan. Beliau juga menyebut bahawa sama ada Laporannya dibentangkan adalah terserah kepada keputusan PAC.
Kami langsung tidak melihat sebarang keperluan untuk menyembunyikan sebarang maklumat yang terkandung dalam Laporan Ketua Audit Negara. Apatah lagi, kredibiliti PAC sebagai sebuah badan yang bebas akan terjejas akibat tindakan tidak menerbitkan Laporan Ketua Audit Negara.
Oleh sebab itu, kami menyeru supaya Laporan Ketua Audit Negara dibentangkan dalam Parlimen untuk menunjukkan bahawa pihak PAC telah menjalankan tugas kita secara telus dan berintegriti.
2. PAC tidak pernah membuat keputusan bahawa Dato’ Seri Najib Razak tidak bersalah
Datuk Hasan Arifin, dalam sesi temu ramah dengan Bernama, telah menyebut perkara-perkara berikut:
- Tiada bukti untuk mencadangkan berlaku salah laku jenayah berkaitan penyalahgunaan dana atau berlaku transaksi pelaburan mahupun pelaburan atau mana-mana aktiviti 1MDB yang menjurus kepada aktiviti menyalahi undang-undang.
- PAC juga mendapati bahawa RM42 bilion hutang 1MDB tidak hilang sebagaimana tuduhan pelbagai pihak, kerana ia sudah dihitung dan tiada pembayaran dilakukan daripada 1MDB ke akaun peribadi Perdana Menteri.
- PAC tidak menemui sebarang bukti untuk menunjukkan salah laku atau salah guna kuasa Perdana Menteri, dan keputusan ini dibuat sebulat suara dan konsensus oleh kesemua anggota PAC.
Kenyataan Datuk Hasan Arifin tidak tepat dan tidak benar. Kami ingin memperbetulkan kenyataan beliau yang jelas tidak mencerminkan persidangan dan pendirian PAC dalam siasatan terhadap 1MDB.
Penjelasan kami:
- Laporan PAC langsung tidak menyebut bahawa tiada bukti untuk mencadangkan berlaku salahlaku jenayah berkaitan penyalahgunaan dana. Sebaliknya, Ketua Audit Negara dan PAC telah mendapati bahawa banyak perkara yang amat diragui dan mencurigakan telah berlaku termasuk bayaran berbilion-bilion ringgit kepada syarikat-syarikat asing yang tidak dapat dipastikan pemilikannya seperti Good Star Limited dan Aabar Investment PJS Limited. Oleh sebab pegawai 1MDB dan Kementerian Kewangan tidak memberikan kerjasama untuk menyampaikan maklumat-maklumat penting ini, termasuk penyata bank (bank statements) 1MDB luar negeri dan dokumen pemilik saham syarikat-syarikat di atas, PAC telah menyeru supaya pihak berkuasa, yang termasuklah pihak polis untuk menyiasat.
- PAC juga tidak pernah membincang sama ada RM42 bilion hilang kerana perkara tersebut tidak terbangkit. Sebaliknya, Ketua Audit Negara telah melaporkan bahawa beliau tidak dapat mengesahkan kesahihan nilai wang tunai dan aset yang dikemukakan oleh pihak 1MDB, termasuk:
- US$1.03 bilion yang dibayar kepada Good Star Limited yang telah ditegur oleh Bank Negara Malaysia.
- US$3.51 bilion yang dibayar kepada Aabar Investment PJS Limited atas alasan pembayaran deposit sekuriti, penamatan opsyen dan top-up sekuriti.
- US$940 juta yang berbentuk unit di BSI Bank, Singapura.
- US$1.56 bilion pelaburan oleh 1MDB Global Investment Limited
Ini adalah kerana 1MDB langsung tidak menyampaikan kesemua dokumen yang diperlukan, termasuk penyata bank luar negara. Oleh sebab itu, ia telah membangkitkan kerisauan antara kami bahawa wang dan pelaburan 1MDB sebanyak US$7 bilion (RM28 bilion) telah hilang kerana tidak dapat dikesan.
Pada masa yang sama, pihak PAC malangnya tidak dapat mengesahkan sama ada pembayaran dilakukan daripada 1MDB ke akaun peribadi Perdana Menteri kerana dokumen-dokumen yang diperlukan seperti penyata bank tidak diserahkan kepada Ketua Audit Negara.
Pada masa yang sama, pihak PAC malangnya tidak dapat mengesahkan sama ada pembayaran dilakukan daripada 1MDB ke akaun peribadi Perdana Menteri kerana dokumen-dokumen yang diperlukan seperti penyata bank tidak diserahkan kepada Ketua Audit Negara.
- PAC tidak pernah membuat sebarang keputusan bahawa Perdana Menteri tidak bersalah. Kami mencabar Datuk Hasan Arifin untuk mengemukakan bukti melalui Hansard yang dibentangkan bahawa keputusan ini dibuat dan dibuat sebulat suara dan konsensus oleh kesemua anggota PAC. Seperti yang dihuraikan diatas, tanpa kerjasama penuh daripada 1MDB dan Kementerian Kewangan, ahli-ahli PAC langsung tidak boleh membuat sebarang penetapan mengenai perkara ini.
Oleh sebab itu, kami meminta supaya Pengerusi PAC menarik balik kenyataan ini kerana ia merupakan kenyataan yang langsung tidak berasas, yang menyelewengkan pendapat PAC dan bersifat bohong. Kami berharap supaya Pengerusi PAC tidak menyalahgunakan jawatannya sebagai Pengerusi PAC, sebuah jawatankuasa Parlimen untuk kepentingan politik BN dan Dato Seri Najib Razak.
Dikeluarkan oleh:
Tan Seng Giaw, Timbalan Pengerusi PAC
Datuk Kamarul Baharin
William Leong
Datuk Takiyuddin Hassan
Tony Pua
Sunday, April 10, 2016
"Look ahead" (and away from 1MDB)? You must be joking, Mr. Prime Minister!
In a demonstration of utter contempt for the Public Accounts Committee (PAC), the Prime Minister had the cheek to ask Malaysians to “look ahead” after a damning report was tabled in Parliament.
Despite a relatively short list of recommendations which included the call for the 1MDB Board of Advisors to be disbanded and the Article 117 of the Memorandum and Articles of Association (M&A) which grants the Prime Minister autocratic control over the company be abolished, there were dozens of critical findings outlined throughout the 106-page report.
On Friday, I have already stated that the PAC has established that at least US$5.5 billion of 1MDB’s cash and assets could not be verified by the Attorney-General after a year of investigations. This included:
That brings a total of US$7.0 billion (RM28 billion) of unverified cash or assets which have been parked overseas by 1MDB. 1MDB have refused to cooperate with the AG or the PAC by handing over the bank statements of their foreign accounts and subsidiaries. 1MDB was also unable to provide documentary proof of who the owners of Good Star Limited and Aabar Investment PJS Limited are.
So how is the Prime Minister expecting Malaysians who have been stunned by the staggering amount of abuse and gross mismanagement by 1MDB of tax-payers’ funds to “look forward”?
For a start, Dato’ Seri Najib Razak has not even agreed to the minimal recommendations by the PAC to disband the Board of Advisors and abolish Article 117 in the M&A.
Worst, Dato’ Seri Najib Razak has refused to instruct 1MDB to handover all the crucial missing bank statements and documents to the AG and the PAC. This will only suggest that the Prime Minister, who is also the Finance Minister is complicit in the entire scandal.
This is especially since Dato’ Seri Najib Razak’s signatures are littered all over 1MDB as he was the ultimate decision maker who signed off resolutions to sack 1MDB’s auditors, Ernst & Young and KPMG, to invest US$1.83 billion in the failed Petrosaudi joint venture, to borrow US$6.5 billion of bonds via Goldman Sachs and to overpay for the RM12.1 billion of power assets.
Hence, the Prime Minister’s direct complicity in all of the above, and the fact that 1MDB refused to give us their foreign bank statements and documents makes it impossible for the PAC to “clear” the Prime Minister of wrongdoings.
Dato’ Seri Najib Razak must stop attempting to sweep the entire 1MDB scandal under the carpet by asking Malaysians to “look forward” or “move on”, when he has refused to even act decisively on the findings of the PAC Report.
Despite a relatively short list of recommendations which included the call for the 1MDB Board of Advisors to be disbanded and the Article 117 of the Memorandum and Articles of Association (M&A) which grants the Prime Minister autocratic control over the company be abolished, there were dozens of critical findings outlined throughout the 106-page report.
On Friday, I have already stated that the PAC has established that at least US$5.5 billion of 1MDB’s cash and assets could not be verified by the Attorney-General after a year of investigations. This included:
- The sums of US$700 million and US$330 million which was misappropriated to Good Star Limited, a company unrelated to the purported 1MDB-Petrosaudi joint venture in 2009 and 2011.
- US$3.51 billion which was paid to a British Virgin Islands (BVI) incorporated Aabar Investment PJS Limited “Aabar (BVI)” in the form of collaterals, options termination compensation and further unexplained “top-up security” payments despite obvious doubts over who owns Aabar (BVI).
- US$940 million worth of “units” which was parked at the Swiss Bank branch of BSI Bank in Singapore.
That brings a total of US$7.0 billion (RM28 billion) of unverified cash or assets which have been parked overseas by 1MDB. 1MDB have refused to cooperate with the AG or the PAC by handing over the bank statements of their foreign accounts and subsidiaries. 1MDB was also unable to provide documentary proof of who the owners of Good Star Limited and Aabar Investment PJS Limited are.
So how is the Prime Minister expecting Malaysians who have been stunned by the staggering amount of abuse and gross mismanagement by 1MDB of tax-payers’ funds to “look forward”?
For a start, Dato’ Seri Najib Razak has not even agreed to the minimal recommendations by the PAC to disband the Board of Advisors and abolish Article 117 in the M&A.
Worst, Dato’ Seri Najib Razak has refused to instruct 1MDB to handover all the crucial missing bank statements and documents to the AG and the PAC. This will only suggest that the Prime Minister, who is also the Finance Minister is complicit in the entire scandal.
This is especially since Dato’ Seri Najib Razak’s signatures are littered all over 1MDB as he was the ultimate decision maker who signed off resolutions to sack 1MDB’s auditors, Ernst & Young and KPMG, to invest US$1.83 billion in the failed Petrosaudi joint venture, to borrow US$6.5 billion of bonds via Goldman Sachs and to overpay for the RM12.1 billion of power assets.
Hence, the Prime Minister’s direct complicity in all of the above, and the fact that 1MDB refused to give us their foreign bank statements and documents makes it impossible for the PAC to “clear” the Prime Minister of wrongdoings.
Dato’ Seri Najib Razak must stop attempting to sweep the entire 1MDB scandal under the carpet by asking Malaysians to “look forward” or “move on”, when he has refused to even act decisively on the findings of the PAC Report.
Saturday, April 09, 2016
1MDB must have lost 80% of its marbles after the damning PAC report was published
In response to a remark I had made during a press conference yesterday where I said I was 80% satisfied with the Public Accounts Committee report, just as I had previously said I was reasonably happy with the Auditor-General’s Report, 1MDB retorted that I can’t be 80% pregnant.
I had to laugh out loud out of sheer incredulity at 1MDB’s preposterous response. It appears that the tabling of the PAC Report has touched a raw nerve, not only causing the entire Board of Directors to offer their resignation, but for 1MDB to lose 80% of its marbles as well.
I can see no problems with being 80% satisfied with the PAC Report which has been tabled. It merely means that it is not a bad report, with sufficient damning details of 1MDB. However, the Report could have been even better if 1MDB had cooperated by providing all the necessary documents the Auditor-General and PAC had asked for.
More importantly for Malaysians however, isn’t whether I can be 80% satisfied or pregnant. It is whether 1MDB, after lying to Malaysians over the past 2 years, is continuing to do so with deceitful insinuations against its critics.
Let me refer to the key assertion 1MDB made in their press statement yesterday –“1MDB has provided to the National Audit Department (JAN) all documents in its possession. It has also explained to JAN why other documents could not be procured. YB Tony knows this yet persists with his recycled rantings.”
Because of the tabling of the PAC Report and the accompanying transcripts, Malaysians can judge for yourselves if 1MDB and its President, Arul Kanda have been telling the truth.
I have attached are 3 pages of transcripts of Arul Kanda’s testimony with the PAC on 1st December 2015.
I had asked JAN during the meeting if they have received all the required bank statements from 1MDB. “Adakah pihak audit telah menerima semua penyata kewangan atau bank statements of 1MDB?”
Puan Farizah Harman confirmed that they have only received the local bank statements and not the foreign bank account statements of 1MDB and its subsidiaries. “Tidak terima... local bank sahaja kita terima.”
Arul Kanda has earlier in public and in the PAC given the excuse that they couldn’t provide the crucial outstanding documents to the PAC because they have been confiscated by the authorities including the police and the Malaysian Anti-Corruption Commission (MACC).
However, I asked “Bank statements, usually if it is taken by the police... you can get copies from the bank, right?”
However, Arul Kanda kept his straight face to respond that “Jadi Yang Berhormat, di mana kita dapat, where we have been able to, we have are(sic) source and we have pass over to JAN”.
The following was the short exchange when Arul Kanda tried to pretend he doesn’t understand what “bank statements” were:
Tony Pua: Bank statements?
Arul Kanda: I am speaking in general terms Yang Berhormat because...
Tony Pua: Bank statements surely it can be... they [JAN] have been asking for it since May.
Arul Kanda: As I said earlier...
Tony Pua: Cannot be taking six months to get from the bank, right?
Arul Kanda: Again, Yang Berhormat, I am not sure which statement or which document in particular.
Tony Pua: Every month. I think they have asked for every month’s [statements], right?
Arul Kanda: Again, Yang Berhormat, I think we have to be detailed in our questions.
At this point, the Auditor-General himself, Tan Sri Ambrin bin Buang, who rarely speaks during witness testimonies, found it necessary to defend his Office for the insinuation that they were not “detailed” in their questions.
“I think whatever kita minta ini, we put it in writing to them. So, they know exactly what we want. Cuma ada yang kita dapat separuh, kita tidak dapat separuh. So that affect our works. And then now, people (Arul Kanda) come and say it (the audit findings) is totally wrong. We want to correct it if it is totally wrong.”
When Arul Kanda then insisted that he didn’t have the “detail” wanted, Tan Sri Ambrin responded that their office have provided several deadlines, the last being 31 October 2015 for 1MDB to submit their documents.
“Tuan Pengerusi, I must put on record. Kita sudah beberapa kali beri deadline. We have to finish our report to the PAC. We put the date even 31st October. We are now in December. We are still waiting.”
As the new Member of the PAC, Dato’ Takiyuddin Hassan rightly pointed out then, “Tuan Pengerusi, saya nampak macam ada element of suppression of evidence di sini. You are trying to hide something. We can assume that.”
When I repeated my question, “What is the difficulty of getting bank statements to the Auditor-General?”
Arul Kanda’s response summed up his debating credentials, “So again, Yang Berhormat, saya rasa soalan tersebut terlalu broad. Kita perlu... lebih jelas apa yang diperlukan...”
In fact, right up to the very last minute in March, there were still repeated requests to the Ministry of Finance and 1MDB to make available all the missing documents, including all the foreign bank statements, payments transaction confirmations, as well as certain key missing agreements. However, these requests fell on deaf ears.
So now, Malaysians can judge for themselves, whether Arul Kanda, the top banker touted to be a debt restructuring expert, but couldn’t understand what “bank statements” were, was “cooperating” with the PAC and AG as he claims, or he was in reality obstructing investigations against 1MDB. They can also decide, who are the real liars, 1MDB or me.
Hence let me reassert my statement yesterday that while the findings of the PAC and the Auditor-General are sufficiently damning for 1MDB, its Board of Directors and top management, the PAC failed to “clear” the Prime Minister, Dato’ Seri Najib Razak of alleged wrongdoings because the crucial evidence of banking information overseas were not handed over to the AG or the PAC.
I had to laugh out loud out of sheer incredulity at 1MDB’s preposterous response. It appears that the tabling of the PAC Report has touched a raw nerve, not only causing the entire Board of Directors to offer their resignation, but for 1MDB to lose 80% of its marbles as well.
I can see no problems with being 80% satisfied with the PAC Report which has been tabled. It merely means that it is not a bad report, with sufficient damning details of 1MDB. However, the Report could have been even better if 1MDB had cooperated by providing all the necessary documents the Auditor-General and PAC had asked for.
More importantly for Malaysians however, isn’t whether I can be 80% satisfied or pregnant. It is whether 1MDB, after lying to Malaysians over the past 2 years, is continuing to do so with deceitful insinuations against its critics.
Let me refer to the key assertion 1MDB made in their press statement yesterday –“1MDB has provided to the National Audit Department (JAN) all documents in its possession. It has also explained to JAN why other documents could not be procured. YB Tony knows this yet persists with his recycled rantings.”
Because of the tabling of the PAC Report and the accompanying transcripts, Malaysians can judge for yourselves if 1MDB and its President, Arul Kanda have been telling the truth.
I have attached are 3 pages of transcripts of Arul Kanda’s testimony with the PAC on 1st December 2015.
I had asked JAN during the meeting if they have received all the required bank statements from 1MDB. “Adakah pihak audit telah menerima semua penyata kewangan atau bank statements of 1MDB?”
Puan Farizah Harman confirmed that they have only received the local bank statements and not the foreign bank account statements of 1MDB and its subsidiaries. “Tidak terima... local bank sahaja kita terima.”
Arul Kanda has earlier in public and in the PAC given the excuse that they couldn’t provide the crucial outstanding documents to the PAC because they have been confiscated by the authorities including the police and the Malaysian Anti-Corruption Commission (MACC).
However, I asked “Bank statements, usually if it is taken by the police... you can get copies from the bank, right?”
However, Arul Kanda kept his straight face to respond that “Jadi Yang Berhormat, di mana kita dapat, where we have been able to, we have are(sic) source and we have pass over to JAN”.
The following was the short exchange when Arul Kanda tried to pretend he doesn’t understand what “bank statements” were:
Tony Pua: Bank statements?
Arul Kanda: I am speaking in general terms Yang Berhormat because...
Tony Pua: Bank statements surely it can be... they [JAN] have been asking for it since May.
Arul Kanda: As I said earlier...
Tony Pua: Cannot be taking six months to get from the bank, right?
Arul Kanda: Again, Yang Berhormat, I am not sure which statement or which document in particular.
Tony Pua: Every month. I think they have asked for every month’s [statements], right?
Arul Kanda: Again, Yang Berhormat, I think we have to be detailed in our questions.
At this point, the Auditor-General himself, Tan Sri Ambrin bin Buang, who rarely speaks during witness testimonies, found it necessary to defend his Office for the insinuation that they were not “detailed” in their questions.
“I think whatever kita minta ini, we put it in writing to them. So, they know exactly what we want. Cuma ada yang kita dapat separuh, kita tidak dapat separuh. So that affect our works. And then now, people (Arul Kanda) come and say it (the audit findings) is totally wrong. We want to correct it if it is totally wrong.”
When Arul Kanda then insisted that he didn’t have the “detail” wanted, Tan Sri Ambrin responded that their office have provided several deadlines, the last being 31 October 2015 for 1MDB to submit their documents.
“Tuan Pengerusi, I must put on record. Kita sudah beberapa kali beri deadline. We have to finish our report to the PAC. We put the date even 31st October. We are now in December. We are still waiting.”
As the new Member of the PAC, Dato’ Takiyuddin Hassan rightly pointed out then, “Tuan Pengerusi, saya nampak macam ada element of suppression of evidence di sini. You are trying to hide something. We can assume that.”
When I repeated my question, “What is the difficulty of getting bank statements to the Auditor-General?”
Arul Kanda’s response summed up his debating credentials, “So again, Yang Berhormat, saya rasa soalan tersebut terlalu broad. Kita perlu... lebih jelas apa yang diperlukan...”
In fact, right up to the very last minute in March, there were still repeated requests to the Ministry of Finance and 1MDB to make available all the missing documents, including all the foreign bank statements, payments transaction confirmations, as well as certain key missing agreements. However, these requests fell on deaf ears.
So now, Malaysians can judge for themselves, whether Arul Kanda, the top banker touted to be a debt restructuring expert, but couldn’t understand what “bank statements” were, was “cooperating” with the PAC and AG as he claims, or he was in reality obstructing investigations against 1MDB. They can also decide, who are the real liars, 1MDB or me.
Hence let me reassert my statement yesterday that while the findings of the PAC and the Auditor-General are sufficiently damning for 1MDB, its Board of Directors and top management, the PAC failed to “clear” the Prime Minister, Dato’ Seri Najib Razak of alleged wrongdoings because the crucial evidence of banking information overseas were not handed over to the AG or the PAC.
Friday, April 08, 2016
Dato’ Seri Najib Razak needs to take full responsibility for the RM55 billion 1MDB debacle and take concrete measures to ensure full compliance by the company
The spin masters in the Prime Minister’s Department are operating in full swing to deflect any blame on Dato’ Seri Najib Razak over the damning Public Accounts Committee (PAC) Report which has been tabled yesterday on 1Malaysia Development Bhd (1MDB).
Dato’ Seri Azalina Othman went so far as to say that the report also confirmed that the Prime Minister did not commit any offences or contribute to any criminal offences, hence proved that all allegations made against him were baseless.
Worst, Dato’ Seri Najib Razak himself attempted to make light of the highly incriminating PAC Report by focusing on the irrelevant – that Tun Dr Mahathir Mohammad made a mistake by claiming that “RM42 billion is missing”. It is irrelevant because the point of the PAC Report wasn’t to determine “RM42 billion was missing” but how billions of ringgit might have been improperly siphoned.
Dato’ Seri Najib Razak must be the most irresponsible Finance Minister in history who is more interested in political rhetoric than the scores of misdeeds outlined in the PAC as well as the Auditor-General’s Report. Just because one man cited the wrong figure for the amounts of funds which were not accounted for, does not mean that there were no billions of dollars which went missing.
We have already established that at least US$5.5 billion of 1MDB’s cash and assets could not be verified by the Attorney-General after a year of investigations.
Hence, at the very least, Dato’ Seri Najib Razak who is also the Finance Minister must be held to be ministerially accountable as 1MDB is a wholly-owned subsidiary of the Ministry of Finance (MoF). In fact, the debt which has been accumulated by 1MDB amounting to RM55 billion as at October 2015 is even larger that the entire RM32.3 billion budget for the Ministry of Finance in 2016!
The degree of ministerial accountability is even higher, given the specific provisions of 1MDB’s Memorandum and Articles of Association (M&A) which required the explicit written endorsement of the Prime Minister for every single substantial transaction carried out by 1MDB. Hence the Prime Minister had personally signed all written resolutions approving its investments in the failed US$1.83 billion Petrosaudi joint venture, the borrowing of US$6.5 billion of bonds, the multi-billion ringgit acquisition of the power plants and real estate as well as the sacking of both external auditors, Ernst & Young and KPMG.
Worse, the M&A of 1MDB explicitly forbids the appointment of any MoF officials in the company, which could have acted as an additional check and balance on the rogue management. The lack of oversight at the level of the Finance Ministry, as testified by the Treasury-General, Tan Sri Irwan Serigar himself to the PAC, only further increases the culpability of the Prime Minister in the entire scandal.
If the Prime Minister hadn’t personally approved these resolutions, then none of the shenanigans cited by the AG could have taken place. Hence, Dato’ Seri Najib Razak was either very stupid and reckless to sign these resolutions without proper consideration or he was very much part and parcel of the 1MDB scam. Either way, the Prime Minister must take responsibility and be held accountable.
Finally, and most importantly, Dato’ Seri Najib Razak has failed to direct 1MDB to cooperate with the AG and the PAC by providing all necessary financial statements, particularly its banking records and statements overseas. Given that the allegations of impropriety by the Prime Minister, especially over the US$681 million “donation” scandal are all transacted overseas, there was no way for the AG or the PAC to clear the Prime Minister of these allegations.
Hence all attempts by the BN Ministers to exonerate Dato’ Seri Najib Razak of any culpability in the RM55 billion 1MDB financial scandal are well off the mark. If Dato’ Seri Najib Razak wants to remove any suspicions of links between 1MDB’s overseas funds and himself, then he must immediately reprimand 1MDB and direct 1MDB to hand over all its banking records overseas to the PAC and AG for further scrutiny.
If not, then Dato’ Seri Najib Razak will be further tainted with the perception that he is afraid of the truth being discovered and he has much to hide.
Dato’ Seri Azalina Othman went so far as to say that the report also confirmed that the Prime Minister did not commit any offences or contribute to any criminal offences, hence proved that all allegations made against him were baseless.
Worst, Dato’ Seri Najib Razak himself attempted to make light of the highly incriminating PAC Report by focusing on the irrelevant – that Tun Dr Mahathir Mohammad made a mistake by claiming that “RM42 billion is missing”. It is irrelevant because the point of the PAC Report wasn’t to determine “RM42 billion was missing” but how billions of ringgit might have been improperly siphoned.
Dato’ Seri Najib Razak must be the most irresponsible Finance Minister in history who is more interested in political rhetoric than the scores of misdeeds outlined in the PAC as well as the Auditor-General’s Report. Just because one man cited the wrong figure for the amounts of funds which were not accounted for, does not mean that there were no billions of dollars which went missing.
We have already established that at least US$5.5 billion of 1MDB’s cash and assets could not be verified by the Attorney-General after a year of investigations.
Hence, at the very least, Dato’ Seri Najib Razak who is also the Finance Minister must be held to be ministerially accountable as 1MDB is a wholly-owned subsidiary of the Ministry of Finance (MoF). In fact, the debt which has been accumulated by 1MDB amounting to RM55 billion as at October 2015 is even larger that the entire RM32.3 billion budget for the Ministry of Finance in 2016!
The degree of ministerial accountability is even higher, given the specific provisions of 1MDB’s Memorandum and Articles of Association (M&A) which required the explicit written endorsement of the Prime Minister for every single substantial transaction carried out by 1MDB. Hence the Prime Minister had personally signed all written resolutions approving its investments in the failed US$1.83 billion Petrosaudi joint venture, the borrowing of US$6.5 billion of bonds, the multi-billion ringgit acquisition of the power plants and real estate as well as the sacking of both external auditors, Ernst & Young and KPMG.
Worse, the M&A of 1MDB explicitly forbids the appointment of any MoF officials in the company, which could have acted as an additional check and balance on the rogue management. The lack of oversight at the level of the Finance Ministry, as testified by the Treasury-General, Tan Sri Irwan Serigar himself to the PAC, only further increases the culpability of the Prime Minister in the entire scandal.
If the Prime Minister hadn’t personally approved these resolutions, then none of the shenanigans cited by the AG could have taken place. Hence, Dato’ Seri Najib Razak was either very stupid and reckless to sign these resolutions without proper consideration or he was very much part and parcel of the 1MDB scam. Either way, the Prime Minister must take responsibility and be held accountable.
Finally, and most importantly, Dato’ Seri Najib Razak has failed to direct 1MDB to cooperate with the AG and the PAC by providing all necessary financial statements, particularly its banking records and statements overseas. Given that the allegations of impropriety by the Prime Minister, especially over the US$681 million “donation” scandal are all transacted overseas, there was no way for the AG or the PAC to clear the Prime Minister of these allegations.
Hence all attempts by the BN Ministers to exonerate Dato’ Seri Najib Razak of any culpability in the RM55 billion 1MDB financial scandal are well off the mark. If Dato’ Seri Najib Razak wants to remove any suspicions of links between 1MDB’s overseas funds and himself, then he must immediately reprimand 1MDB and direct 1MDB to hand over all its banking records overseas to the PAC and AG for further scrutiny.
If not, then Dato’ Seri Najib Razak will be further tainted with the perception that he is afraid of the truth being discovered and he has much to hide.
If billions of dollars are not "missing" as alleged, then why did 1MDB refuse to present its bank statements to the AG and PAC?
The damning Public Accounts Committee (PAC) Report on 1Malaysia Development Bhd (1MDB) was tabled in Parliament yesterday.
Among the lengthy list of transgressions by 1MDB, the PAC established that:
The sums of US$700 million and US$330 million have been misappropriated to Good Star Limited, a company unrelated to the purported 1MDB-Petrosaudi joint venture in 2009 and 2011. (7.3.4-7.3.5)
US$3.51 billion has been paid to a British Virgin Islands (BVI) incorporated Aabar Investment PJS Limited “Aabar (BVI)” in the form of collaterals, options termination compensation and further unexplained “top-up security” payments despite obvious doubts over who owns Aabar (BVI).
The Auditor-General (AG) was also unable to verify the actual transactions above because 1MDB has refused to provide the bank statements of its overseas bank accounts and foreign subsidiaries. (7.3.9 – 7.3.13)
As a result of 1MDB’s refusal to cooperate, the AG was also unable to ascertain the purported existence and value of the so-called US$940 million worth of “units” parked at the Swiss Bank branch of BSI Bank in Singapore. (7.3.15)
Instead of answering the respective findings of the Report, 1Malaysia Development Bhd (1MDB) thought it more appropriate to train its guns on the Wall Street Journal (WSJ). 1MDB claimed that it was entirely inaccurate of WSJ to claim in its article that the PAC had found that “billions of dollars” had gone missing from 1MDB, and had recommended a “criminal investigation” on the fund’s senior management.
Why is 1MDB so ruffled with the claim by WSJ that “billions of dollars” were “found missing” based on the PAC Report?
Indeed, the PAC Report never made the specific claim that the above billions were “missing” officially. However, the fact of the matter is these billions are unaccounted for and cannot be verified, as confirmed by the AG himself.
Hence, if 1MDB is so offended by the missing billions description by WSJ, why didn’t the company show where these monies were with its bank statements and their respective transaction details to the AG since May 2015?
In fact, 1MDB’s recalcitrance and utter contempt for the Auditor-General over the above, despite countless reminders by the AG and the PAC, only goes to reinforce the global suspicions that the billions of dollars have indeed gone missing.
The refusal by 1MDB and its management to cooperate over the above unaccounted billions of dollars left the PAC with no choice but to recommend investigations by the relevant
authorities. These “relevant authorities” would certainly include the Royal Malaysia Police to track possible criminal elements in the flow of funds by 1MDB overseas.
1MDB should stop trying to play the victim of a non-existent global malicious conspiracy against the company. 1MDB has had every opportunity to clear its name over the past year and has now been proven to have failed to do so.
The real victims are the Malaysian people whose trust in 1MDB, its management and directors, have been betrayed by half-truths, lies, deceit and cover-ups.
Among the lengthy list of transgressions by 1MDB, the PAC established that:
The sums of US$700 million and US$330 million have been misappropriated to Good Star Limited, a company unrelated to the purported 1MDB-Petrosaudi joint venture in 2009 and 2011. (7.3.4-7.3.5)
US$3.51 billion has been paid to a British Virgin Islands (BVI) incorporated Aabar Investment PJS Limited “Aabar (BVI)” in the form of collaterals, options termination compensation and further unexplained “top-up security” payments despite obvious doubts over who owns Aabar (BVI).
The Auditor-General (AG) was also unable to verify the actual transactions above because 1MDB has refused to provide the bank statements of its overseas bank accounts and foreign subsidiaries. (7.3.9 – 7.3.13)
As a result of 1MDB’s refusal to cooperate, the AG was also unable to ascertain the purported existence and value of the so-called US$940 million worth of “units” parked at the Swiss Bank branch of BSI Bank in Singapore. (7.3.15)
Instead of answering the respective findings of the Report, 1Malaysia Development Bhd (1MDB) thought it more appropriate to train its guns on the Wall Street Journal (WSJ). 1MDB claimed that it was entirely inaccurate of WSJ to claim in its article that the PAC had found that “billions of dollars” had gone missing from 1MDB, and had recommended a “criminal investigation” on the fund’s senior management.
Why is 1MDB so ruffled with the claim by WSJ that “billions of dollars” were “found missing” based on the PAC Report?
Indeed, the PAC Report never made the specific claim that the above billions were “missing” officially. However, the fact of the matter is these billions are unaccounted for and cannot be verified, as confirmed by the AG himself.
Hence, if 1MDB is so offended by the missing billions description by WSJ, why didn’t the company show where these monies were with its bank statements and their respective transaction details to the AG since May 2015?
In fact, 1MDB’s recalcitrance and utter contempt for the Auditor-General over the above, despite countless reminders by the AG and the PAC, only goes to reinforce the global suspicions that the billions of dollars have indeed gone missing.
The refusal by 1MDB and its management to cooperate over the above unaccounted billions of dollars left the PAC with no choice but to recommend investigations by the relevant
authorities. These “relevant authorities” would certainly include the Royal Malaysia Police to track possible criminal elements in the flow of funds by 1MDB overseas.
1MDB should stop trying to play the victim of a non-existent global malicious conspiracy against the company. 1MDB has had every opportunity to clear its name over the past year and has now been proven to have failed to do so.
The real victims are the Malaysian people whose trust in 1MDB, its management and directors, have been betrayed by half-truths, lies, deceit and cover-ups.
Thursday, April 07, 2016
All critics of debt-stricken 1MDB have been finally vindicated with tabling of the PAC Report
For more than a year, the critics of 1Malaysia Development Bhd (1MDB) – the Sarawak Report, which has been banned by the Malaysian government, the Wall Street Journal, which has been accused of orchestrating a conspiracy against the country and myself, who is being investigated for “activities detrimental to parliamentary democracy” over the same matter were accused of doctoring documents and publishing lies.
The tabling of the Public Accounts Committee (PAC) Report today, with the accompanying transcripts of all its proceedings since 19th May 2015 in Parliament has now fully vindicated us. The findings of the Auditor-General, summarised in the 106-page PAC Report and the relatively brief conclusion by the PAC confirms gross mismanagement and wanton neglect of all principles of good governance and accountability.
Most importantly, 1MDB deliberately hampered the investigations by the Auditor-General and the PAC by giving half-truths, withholding of crucial information as well as defiantly refusing to supply simple bank statements of its overseas accounts to allow the audit of multi-billion ringgit money trails.
Despite certain shortcomings of the report – the failure to obtain the crucial information of 1MDB’s foreign banking transactions, and the failure to secure additional key witnesses like former CEO, Mohd Hazem Abd Rahman, Bank Negara officials, auditors Ernst & Young and even controversial figures like Low Taek Jho – the evidence put forward based on available documents were overwhelmingly damning for 1MDB.
This crucially include the first joint venture agreement with Petrosaudi International Limited where 1MDB was meant to invest US$1 billion for a 40% stake but US$700 million was misappropriated to Good Star Limited. The Auditor-General has found evidence that the transaction took place without the knowledge and approval of the Board (7.3.4, 7.3.5). Interviews with the then 1MDB Chairman, Tan Sri Mohd Bakke Salleh showed that he quit the Board in disgust a few weeks after discovering the dodgy, in his refusal to condone the actions of the insubordinate action of the Management.
While the Management insisted that Good Star Limited was a subsidiary of Petrosaudi International, no evidence was presented by 1MDB from the relevant authorities to the AG or the PAC to prove such claims. The AG’s Report also confirmed that besides the original US$700 million transferred in 2009, 1MDB further transferred an additional US$330 million to Good Star in 2011.
The AG and PAC have also been able to establish multiple questionable transactions between 1MDB and Aabar Investment PJS Limited, which is established in the British Virgin Islands “Aabar (BVI)”. It has been previously reported that Aabar (BVI) was granted 49% options to acquire 2 power companies, Tanjong Power and Genting Sanyen, in exchange for International Petroleum Investment Corporation (IPIC) providing a US$3.5 billion guarantee for 1MDB bonds issued in 2012. These options were terminated in 2014.
Based on the Option Termination agreement sighted by the AG, 1MDB was to compensate Aabar with a “refundable deposit” of US$300 million. However, 1MDB reported that it has paid US$993 million to Aabar (BVI). (7.3.10)
Worse, the AG and the PAC has also been informed that besides the above, 1MDB paid Aabar (BVI) further sums of US$855 million and US$295 million as unexplained “top-up security deposits”. (7.3.13)
Under the original “Credit Enhancement Agreement” signed in 2012, 1MDB has already paid Aabar (BVI) US$1.367 billion. (7.3.9)
Hence, in total, 1MDB has paid US$3.51 billion to Aabar (BVI) for “security deposits” and “option termination” apparently for the US$3.5 billion bond guarantee provided by IPIC!
What is damning is the fact that 1MDB could not provide any concrete documentary evidence that Aabar (BVI) is in anyway related to Aabar Investment PJS of Abu Dhabi, which is the susbsidiary of IPIC. The Auditor-General noted that Aabar (BVI) is not listed as IPIC’s subsidiary based on the audited accounts of IPIC. (7.3.11, 7.3.12).
In addition, the AG Office clearly stated that they could not verify that the above transactions disclosed by 1MDB actually took place because 1MDB failed to submit its overseas bank statements and other relevant documents for verification, despite repeated requests and reminders. (7.3.13)
There are many other shocking misdeeds and transgressions which have been disclosed in the PAC report, which won’t be listed here in my statement. However, what is clear is that there is more than sufficient damning evidence to indict not only the entire top management, but also the entire Board of Directors.
The PAC Report has requested that former CEO, Datuk Shahrol Halmi Azral and other related parties be investigated for all of the shenanigans cited, and reprimanded the Board of Directors for their failure. The Inspector-General of Police must take immediate action to investigate Datuk Shahrol and his associates. I will go further to call not only for Datuk Shahrol Halmi be sacked with immediate effect, but the entire Board of Directors who have failed to protect the interest of the Government and the tax-payers to be removed as well.
The tabling of the Public Accounts Committee (PAC) Report today, with the accompanying transcripts of all its proceedings since 19th May 2015 in Parliament has now fully vindicated us. The findings of the Auditor-General, summarised in the 106-page PAC Report and the relatively brief conclusion by the PAC confirms gross mismanagement and wanton neglect of all principles of good governance and accountability.
Most importantly, 1MDB deliberately hampered the investigations by the Auditor-General and the PAC by giving half-truths, withholding of crucial information as well as defiantly refusing to supply simple bank statements of its overseas accounts to allow the audit of multi-billion ringgit money trails.
Despite certain shortcomings of the report – the failure to obtain the crucial information of 1MDB’s foreign banking transactions, and the failure to secure additional key witnesses like former CEO, Mohd Hazem Abd Rahman, Bank Negara officials, auditors Ernst & Young and even controversial figures like Low Taek Jho – the evidence put forward based on available documents were overwhelmingly damning for 1MDB.
This crucially include the first joint venture agreement with Petrosaudi International Limited where 1MDB was meant to invest US$1 billion for a 40% stake but US$700 million was misappropriated to Good Star Limited. The Auditor-General has found evidence that the transaction took place without the knowledge and approval of the Board (7.3.4, 7.3.5). Interviews with the then 1MDB Chairman, Tan Sri Mohd Bakke Salleh showed that he quit the Board in disgust a few weeks after discovering the dodgy, in his refusal to condone the actions of the insubordinate action of the Management.
While the Management insisted that Good Star Limited was a subsidiary of Petrosaudi International, no evidence was presented by 1MDB from the relevant authorities to the AG or the PAC to prove such claims. The AG’s Report also confirmed that besides the original US$700 million transferred in 2009, 1MDB further transferred an additional US$330 million to Good Star in 2011.
The AG and PAC have also been able to establish multiple questionable transactions between 1MDB and Aabar Investment PJS Limited, which is established in the British Virgin Islands “Aabar (BVI)”. It has been previously reported that Aabar (BVI) was granted 49% options to acquire 2 power companies, Tanjong Power and Genting Sanyen, in exchange for International Petroleum Investment Corporation (IPIC) providing a US$3.5 billion guarantee for 1MDB bonds issued in 2012. These options were terminated in 2014.
Based on the Option Termination agreement sighted by the AG, 1MDB was to compensate Aabar with a “refundable deposit” of US$300 million. However, 1MDB reported that it has paid US$993 million to Aabar (BVI). (7.3.10)
Worse, the AG and the PAC has also been informed that besides the above, 1MDB paid Aabar (BVI) further sums of US$855 million and US$295 million as unexplained “top-up security deposits”. (7.3.13)
Under the original “Credit Enhancement Agreement” signed in 2012, 1MDB has already paid Aabar (BVI) US$1.367 billion. (7.3.9)
Hence, in total, 1MDB has paid US$3.51 billion to Aabar (BVI) for “security deposits” and “option termination” apparently for the US$3.5 billion bond guarantee provided by IPIC!
What is damning is the fact that 1MDB could not provide any concrete documentary evidence that Aabar (BVI) is in anyway related to Aabar Investment PJS of Abu Dhabi, which is the susbsidiary of IPIC. The Auditor-General noted that Aabar (BVI) is not listed as IPIC’s subsidiary based on the audited accounts of IPIC. (7.3.11, 7.3.12).
In addition, the AG Office clearly stated that they could not verify that the above transactions disclosed by 1MDB actually took place because 1MDB failed to submit its overseas bank statements and other relevant documents for verification, despite repeated requests and reminders. (7.3.13)
There are many other shocking misdeeds and transgressions which have been disclosed in the PAC report, which won’t be listed here in my statement. However, what is clear is that there is more than sufficient damning evidence to indict not only the entire top management, but also the entire Board of Directors.
The PAC Report has requested that former CEO, Datuk Shahrol Halmi Azral and other related parties be investigated for all of the shenanigans cited, and reprimanded the Board of Directors for their failure. The Inspector-General of Police must take immediate action to investigate Datuk Shahrol and his associates. I will go further to call not only for Datuk Shahrol Halmi be sacked with immediate effect, but the entire Board of Directors who have failed to protect the interest of the Government and the tax-payers to be removed as well.
Monday, April 04, 2016
1MDB once again disingenuous with its denial that it funded "The Wolf of Wall Street" producer, Red Granite Pictures
Global news agencies picked up on the exposé by Wall Street Journal which claimed that Red Granite Pictures, the company formed by Riza Aziz to produce “The Wolf of Wall Street”was funded with US$155 million originating from 1MDB.
The Wall Street Journal said that 1MDB had paid US$1.4 billion to Aabar Investment PJS Limited, a company established in the British Virgin Islands (BVI) in 2012.
The payment was meant as a collateral for the guarantee provided by Abu Dhabi’s International Petroleum Investment Corporation (IPIC) for 1MDB’s US$3.5 billion of bonds. However, IPIC’s subsidiary with a similar name, Aabar Investment PJS is set up in Abu Dhabi. IPIC’s financial statements published on the London Stock Exchange has disclosed neither Aabar (BVI) as a subsidiary or the receipt of the US$1.4 billion “collateral” cited by 1MDB.
Red Granite Capital then received US$105 million directly and another US$50 million indirectly via intermediaries from Aabar (BVI). Red Granite Capital then funded Red Granite Pictures.
1MDB was relatively quick to issue a very short denial. 1MDB said it “has never invested in nor transferred funds to Red Granite Pictures, whether directly or via intermediaries.”
However, 1MDB has failed to explain why it has made the above collateral payments to Aabar (BVI) which appears to be a completely unrelated entity to IPIC? Can 1MDB clarify who is the ultimate beneficiary or owner of Aabar (BVI)?
If 1MDB is unable to ascertain the ownership of Aabar (BVI), then why did it transfer such an enormous sum of US$1.4 billion to the company?
Hence it appears that on paper, the transfer of US$1.4 billion is a legitimately made for the purpose of providing a collateral. But upon closer scrutiny, it may amount to a fraudulent attempt to mask the embezzlement of funds via the mystery Aabar (BVI) vehicle.
If 1MDB fails to provide clarity on the nature and ownership of Aabar (BVI) with the necessary and appropriate documents, then any denials it makes about Aabar (BVI) not being an “intermediary” would have zero credibility.
In fact, the best thing for 1MDB to do now is to request IPIC to issue an official statement confirming its alleged relationship with Aabar (BVI). It would put to rest all of the global allegations against 1MDB today. Given 1MDB’s intimate relationship with IPIC and Abu Dhabi, why haven’t IPIC come to 1MDB’s rescue?
The Wall Street Journal said that 1MDB had paid US$1.4 billion to Aabar Investment PJS Limited, a company established in the British Virgin Islands (BVI) in 2012.
The payment was meant as a collateral for the guarantee provided by Abu Dhabi’s International Petroleum Investment Corporation (IPIC) for 1MDB’s US$3.5 billion of bonds. However, IPIC’s subsidiary with a similar name, Aabar Investment PJS is set up in Abu Dhabi. IPIC’s financial statements published on the London Stock Exchange has disclosed neither Aabar (BVI) as a subsidiary or the receipt of the US$1.4 billion “collateral” cited by 1MDB.
Red Granite Capital then received US$105 million directly and another US$50 million indirectly via intermediaries from Aabar (BVI). Red Granite Capital then funded Red Granite Pictures.
1MDB was relatively quick to issue a very short denial. 1MDB said it “has never invested in nor transferred funds to Red Granite Pictures, whether directly or via intermediaries.”
However, 1MDB has failed to explain why it has made the above collateral payments to Aabar (BVI) which appears to be a completely unrelated entity to IPIC? Can 1MDB clarify who is the ultimate beneficiary or owner of Aabar (BVI)?
If 1MDB is unable to ascertain the ownership of Aabar (BVI), then why did it transfer such an enormous sum of US$1.4 billion to the company?
Hence it appears that on paper, the transfer of US$1.4 billion is a legitimately made for the purpose of providing a collateral. But upon closer scrutiny, it may amount to a fraudulent attempt to mask the embezzlement of funds via the mystery Aabar (BVI) vehicle.
If 1MDB fails to provide clarity on the nature and ownership of Aabar (BVI) with the necessary and appropriate documents, then any denials it makes about Aabar (BVI) not being an “intermediary” would have zero credibility.
In fact, the best thing for 1MDB to do now is to request IPIC to issue an official statement confirming its alleged relationship with Aabar (BVI). It would put to rest all of the global allegations against 1MDB today. Given 1MDB’s intimate relationship with IPIC and Abu Dhabi, why haven’t IPIC come to 1MDB’s rescue?
Sunday, April 03, 2016
Impian Sabah & Sarawak: A Malaysian Dream - The Book!
Impian Sabah & Sarawak: A Malaysian Dream is a commemorative book that celebrates the milestones achieved since 2013. We have completed scores of projects, involved hundreds of volunteers, assisted thousands of marginalized rural villagers and have been generously supported by tens of thousands of ordinary Malaysians.
Despite not being part of the state or federal governments, we have shown the East Malaysians that much can be achieved even with very limited budgets.
Impian Sabah and Sarawak have become the game-changer for these rural folks. There is now real competition to win the hearts and minds of these voters who were previously taken for granted.
We firmly believe that continued Impian Sabah and Sarawak programmes are crucial in bringing about the twin change of upgraded quality of life and longer term political change. Sarawak needs to elect a government that not only cares for the man on the street, but also one that will fight tooth and nail against corruption.
The book records not only the projects but the story behind each one of them; accounts of lives touched and perspectives of volunteers who participated in the many projects, all captured in the many photographs featured in this book.
All profits from the sale of this beautiful hardcover, full-colour 180-page book will go towards future Impian Sabah & Sarawak projects, benefitting the rural marginalised poor in East Malaysia. Get your copy today!
And for those who prefers to pay via Maybank2U or other internet banking channels, cash deposit, special requests, bulk quantities etc., feel free to email me at tonypua@yahoo.com. Please include your shipping address and contact number.
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