Wednesday, July 13, 2016

Did 1MDB GIL pay US$1.283 billion to Aabar Investment PJS Limited to bluff Deloitte that the sums redeemed from 1MDB’s Cayman Island investments were “received”?

When Sarawak Report exposed banking records of 1MDB Global Investment Limited (1MDB GIL) which paid US$1.28 billion to the fraudulent Aabar Investment PJS Limited (“Aabar (BVI)”) between 12 September to 14 November 2014, many questions were raised.

Why did 1MDB GIL pay Aabar (BVI) the money even though there were no business transactions, agreements or dealings between the two entities?  Why wasn’t these fund transfers disclosed and explained during Arul Kanda’s testimonies with the PAC?

Unfortunately, my questions in my statement issued yesterday did not elicit any response from the 1MDB President, Arul Kanda.

Then it occurred to me that the 1MDB Financial Statements for the year ending 31 March 2014 was signed off by the auditors, Deloitte coincidentally on 4 November 2014, where 1MDB GIL also made a payment of US$222 million to Aabar (BVI).

At that point in time, there was increasing concern over 1MDB’s US$2.318 billion investment in an obscure investment fund based in Cayman Islands.  The Board of Directors minutes have shown that the Management were repeatedly instructed to redeem the investment and repatriate the proceeds back to Malaysia throughout 2014. The company was under immense pressure because the authenticity of the investment was being publicly questioned.

Based on the testimony of Deloitte to the Public Accounts Committee (PAC), the auditors were particularly insistent that 1MDB was able to redeem most, if not all of the Caymans investment before signing off the much-delayed statements which were already past due.

The accounts were finally signed off by Deloitte when 1MDB was able to “show” the auditors that US$1.22 billion have been redeemed.  The money was however, not repatriated to Malaysia.

The Mar 2014 Financial Statements wrote that “as at the date of this report (4 Nov 2014), the amounts received from the redemption of investments US$1.22 billion… have been substantially utilised for the purposes of debt interest payment, working capital and payments to Aabar as refundable deposits…”

Based on the 1MDB GIL transactions Sarawak Report exposed 2 days ago, coincidentally 1MDB GIL has paid US$1.22 billion to Aabar (BVI) by 4 November 2014! (See Table 1 below)

Hence we have now figured out the most likely reason why 1MDB GIL made these mysterious unexplained payments to Aabar (BVI).  The transactions were meant to hoodwink Deloitte into accepting that all the funds purportedly “received” from the Cayman Islands amounting to US$1.22 billion have pretty much been immediately used to pay Aabar (BVI).

The catch is, the money used to pay Aabar (BVI) did not come from the controversial Caymans investment, but from 1MDB’s own funds in its wholly-owned subsidiary, 1MDB GIL!  Unfortunately, Deloitte was sufficiently cheated and bluffed by the 1MDB crooks to sign off the accounts so readily.

We call upon Deloitte to review the documents shown to them for them to be so sufficiently satisfied as to sign off the 1MDB accounts so readily.  Should these documents shown to them prove to be fraudulent or manipulated on hindsight, they must immediately file police reports to clear their name and ensure that the crooks are investigated.

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