Wednesday, August 03, 2016

How can a Finance Minister with any sense of integrity and accountability claim that 1MDB’s disowned financial statements for the years ending March 2013 and 2014 “doesn’t affect 1MDB”?

Deloitte Malaysia who signed off 1MDB’s controversial accounts for the financial years ending March 2013 and 2014 has publicly disowned the veracity of the audited reports.  This has forced the Board of Directors of 1MDB to announce that “its 2013 and 2014 audited financial statements should no longer be relied on until allegations made by the United States (US) Department of Justice (DOJ) are determined in court”.

However, instead of setting off more alarm bells, the newly appointed Second Finance Minister, Datuk Johari Abdul Ghani brushes of the significance and importance of the above development by claiming that it “doesn’t affect 1MDB”.

He said that it is because 1MDB no longer has bank loans and doesn’t plan to borrow money.

Firstly, the irresponsible statement by Datuk Johari Abdul Ghani is misleading because 1MDB is still laden with multi-billion dollar debts which have yet to be repaid.  They include the US$6.5 billion worth of bonds raised by Goldman Sachs, RM5 billion sukuk guaranteed by the Federal Government, RM2.4 billion sukuk via its subsidiary Bandar Malaysia Sdn Bhd and another RM800 million of borrowings from SOCSO.

Secondly, the Second Finance Minister appears completely uninterested in the reasons or basis why Deloitte has withdrawn its endorsement for 1MDB’s accounts for 2013 and 2014.

The DOJ suit has shown that Deloitte has failed to discover that 1MDB had made more than US$3.5 billion of payments over the course of 2012 t0 2014 to a fraudulent Aabar Investment PJS Limited, incorporated in the British Virgin Islands (BVI). 

Deloitte found nothing suspicious in 1MDB Global Investment Limited’s US$1.56 billion investment in several dodgy and obscure investment funds, including the Devonshire Growth, Enterprise Emerging Markets and Cistenique investment funds.  The US DOJ had determined that these funds had acted as conduits in the money laundering scam, including US$681 million which had ended up in the Prime Minister, Dato’ Seri Najib Razak’s personal bank account.

Deloitte was also led to believe that US$1.22 billion was successfully redeemed from 1MDB’s fake investment in the Cayman Islands, when in reality 1MDB was making round-tripping transactions with money from its subsidiary, 1MDB Global Investment Limited.  This was revealed separately by documents exposed by the Sarawak Report.

Why is Datuk Johari Abdul Ghani completely disinterested in the missing and embezzled funds?  Why is there no demand from the Minister for the accounts to be re-audited?

Is his promotion from Deputy Finance Minister precisely because he will stand by the Prime Minister through thick and thin to cover up the multi-billion-dollar misappropriation which has taken place in the wholly-owned subsidiary of the Ministry of Finance?

Malaysians are disgusted that the Cabinet has failed to take any concrete actions to ensure accountability in 1MDB.  No action has been taken against any of the officials involved despite the damning Public Accounts Committee (PAC) and still-classified Auditor-General’s Report, as well as the latest expose by the US DOJ.

Datuk Johari Abdul Ghani further asserted that Putrajaya is “very confident” that 1MDB will win the US$6.5 billion arbitration case filed by IPIC.  His sheer confidence is surprising given the DOJ developments which has clearly shown 1MDB’s various key official playing an integral role in conspiring to defraud 1MDB. 

Under such circumstances, how is 1MDB going to be able to prove to the London Arbitration Court that 1MDB is an innocent party to the massive fraud?  Will Datuk Johari resign if the decision is found to be not in 1MDB’s favour?
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