Thursday, July 27, 2017

Dato’ Seri Najib Razak must come clean as to whether there was another undocumented “letter of support” for 1MDB in 2014 to borrow US$975 million from a Deutsche Bank-led consortium

In November 2014, when it was first discovered that Dato’ Seri Najib Razak had signed a “letter of support” to enable 1MDB to secure a US$3 billion bond in March 2013, it was immediately met with denial in Parliament.


On 6 November 2014, Datuk Ahmad Maslan, the then Deputy Minister of Finance had insisted in Parliament that the Government did not issue any such “letter of support”.  However, a few days later, he conceded to the media that such a “letter of support” existed and he was ultimately forced to apologise to the House for his “error” on 18 November 2014.


The existence of this “letter of support” had major financial implications for the Government because it stated that “In the event, 1MDB has shareholder of the issuer fails to provide the required funds… Malaysia shall then step in to inject the necessary capital into the issuer or make payment to ensure the issuers obligations are fully met.”  This meant that the Malaysian Government had effectively guaranteed, one way or another, the US$3 billion 1MDB borrowing above.


As reported by The Edge Financial Daily on 12 November 2014, Datuk Ahmad Maslan had said that there was “no other letter of support for 1MDB apart from the US$3 billion” during a media conference at the Parliament.


Further on 16 March 2016, when questioned by the Member of Parliament for Indera Mahkota, Dato’ Fauzi Abdul Rahman, the Finance Minister had confirmed that there were only TWO “letters of support” which was issued by the Government, including another for 1MDB’s US$150 million borrowing from Bank Exim in March 2015.


However, we have since discovered, via information provided by the latest United States Department of Justice filing to seize assets acquired with funds laundered from 1MDB that there exist another secret “letter of support” to borrow US$975 million from a Deutsche Bank-led consortium in September 2014.


The US DOJ suit stated that Dato’ Seri Najib Razak, referred to as “Malaysian Official 1 (MO1)”,
“on behalf of the Government of Malaysia, provided a Letter of Support to Deutsche Bank in connection with the $975 million loan.”

The suit further noted that “internal Deutsche Bank records reflect that 1MDB officials opted to provide a Letter of Support signed by MALAYSIAN OFFICIAL 1, rather than some form of guarantee by 1MDB… at least in part because a letter of support did not require Bank Negara or Cabinet approval. At the request of 1MDB, all references to the Letter of Support were removed from the Facility Agreement.”

Like the earlier “letters of support”, the Government agrees to financial support to 1MDB to ensure the company’s ability to repay. Dato’ Seri Najib Razak even “waived its sovereign immunity in connection with disputes arising out of the Letter of Support”.

I have submitted a simple question in the current sitting asking the Prime Minister to confirm if he had indeed issued a “Letter of Support” in connection to the US$975 million loan from Deutsche Bank.  The question has been rejected on the basis that it was “sangkaan”, or “presumably questionable assumptions”.

There was no assumptions in my question.  I had asked a simple matter as to whether there was indeed a “letter of support” issued in September 2014.  If there isn’t, just say “no”.  What’s so difficult?

Both Dato’ Seri Najib Razak and the Parliament’s refusal to entertain the simple factual question only serves to confirm the suspicions in everyone’s minds that such a secret guarantee was indeed issued.  Dato’ Seri Najib Razak cannot come to the Parliament to say “yes” to the question simply because it would mean that he had previously lied to the Parliament when he said there were only 2 such letters for the sums of US$3 billion and US$150 million.

This further raises the question as to whether Dato’ Seri Najib Razak had issued the letter without the Cabinet’s approval or for that matter, without the knowledge of the Finance Ministry – which will be a clear cut abuse of power by the Prime Minister.  I will confer with Tan Sri Muhyiddin Yassin, the former Deputy Prime Minister to confirm if such a “letter of support” which binds the Malaysian Government was ever discussed in the Cabinet.

If not, then the Attorney-General must commence immediate investigations over the possible criminal breach of trust, abuse of power and even fraud against Dato’ Seri Najib Razak.
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