Meanwhile, crucial details are deliberately omitted, calculated to present an alternate reality for the media and the rakyat.
At first, I was both amused and bemused by yesterday’s headline on Malaysiakini story, “PM: 1MDB has cleared its bank debts, short-term debts”. The headline is factually correct, although it needs an alert and informed reader to read between the lines.
Later however, I was stumped and stupefied by the headlines of The Star and The New Straits Times (NST), screaming “Najib: 1MDB is now debt free” and “1MDB now debt free: Finance Ministry”.
I immediately sought out my colleague, Member of Parliament for Bakri, Er Teck Hwa for a copy of Dato’ Seri Najib Razak’s parliamentary reply to his question, which was the basis for the above news stories.
He had asked the Finance Minister to state, among other things, “debts and assets of 1MDB in and out of Malaysia for the years, 2015 and 2016”.
Dato’ Seri Najib Razak responded that 1MDB made full settlement amounting to RM229.5mil for a revolving credit facility to Affin Bank in November, 2015.
Last year, 1MDB has also successfully repaid a RM950mil in a standby credit facility from the Federal Government, a RM2bil term-loan facility from Marstan Investments N.V and a US$150mil term financing facility from Exim Bank.
With the RM3.8 billion worth of debts repaid, the Finance Minister further added that 1MDB no longer have any borrowings with banks, nor any other short-term debts.
As if on cue, knowingly or unknowingly, The Star and The NST fell for it hook, line and sinker by declaring that “1MDB is now debt free”, painting most beautiful alternate reality which the Prime Minister would like you to believe.
Except the reality is so exceedingly different, that you can only conclude that Dato’ Seri Najib Razak’s reply was deliberately designed to obfuscate the truth to achieve the effect convincing Malaysians of the biggest lie of them all, that “1MDB is debt free”.
Dato’ Seri Najib has conveniently and mischievously failed to disclose the multiple elephants squeezed into the room - that 1MDB still have outstanding
(i) a 30-year RM5 billion bond which is guaranteed by the Federal Government
(ii) two 10-year US$1.75 billion bonds which was guaranteed by Abu Dhabi’s International Petroleum Investment Corporation (IPIC) but have since been indemnified by the Ministry of Finance, Incorporated (MoF Inc)
(iii) a 10-year US$3.0 billion bond, guaranteed with a “Letter of Support” issued by the Minister of Finance
(iv) a US$1.0 billion advance by IPIC, indemnified by MOF Inc
(v) at least US$230 million worth of interest payments by IPIC on behalf of 1MDB, indemnified by MOF Inc.
Hence, the total amount of 1MDB debt still outstanding, and directly or indirectly guaranteed by the Federal Government are RM5.0 billion and at least US$7.73 billion, or a total of more than RM39 billion!
This is despite the fact that the Federal Government has already bailed out 1MDB’s real estate division by assuming 1MDB’s RM2.4 billion worth of sukuk and another RM800 million borrowed from SOCSO.
In addition, the RM39 billion is still outstanding despite the fact that 1MDB has already disposed of its power plant assets for a total of RM9.83 billion.
Hence it complete defies belief that Dato’ Seri Najib Razak was less than truthful with the material omission of more than RM39 billion worth debt in his reply to my Bakri colleague. Instead, the Prime Minister chose to extol 1MDB’s RM3.8 billion repayments, barely a-tenth of the scandal-ridden fund’s total debts.
He even carefully worded his happy conclusion, that 1MDB no longer owes any bank any money or any other short term debts, to skew the impression and perception of those who are not alert or informed. If this does not crown Dato’ Seri Najib the devious King of Obfuscation in Malaysia, then I certainly don’t know what would.