Another ‘top secret’ 1MDB bailout by 1MDB via TRX land buyback by the Ministry of Finance

During the last parliamentary session, I had asked the Minister of Finance what is the cost and size of the land in Tun Razak Exchange (TRX) which its wholly-owned subsidiary, Aroma Teraju Sdn Bhd acquired from 1MDB in 2015.

The reply which I had received from the Dato’ Seri Najib Razak on 31 July, was that the information was protected by a confidentiality clause between the buyer and the seller.

The answer is ridiculous because both entities are wholly-owned by the Ministry of Finance, which in turn is accountable to both the Parliament and the public at large, and hence such information should never be a secret. This is especially since the price of a piece of land is in no way a threat to national security, and the information is certainly not protected by the Official Secrets Act.

Therefore, for the current sitting, I had asked why the land size and price for the purchase of Tun Razak Exchange (TRX) land by MOF-owned Aroma Teraju from 1MDB cannot be disclosed even though both companies were wholly-owned subsidiaries of MOF.

Tony Pua minta Menteri Kewangan menyatakan apa sebabnya keluasan dan harga pembelian tanah Tun Razak Exchange (TRX) oleh syarikat Aroma Teraju daripada 1MDB tidak boleh diumumkan walaupun kedua-dua syarikat tersebut merupakan anak syarikat milik penuh Kementerian Kewangan

Once again, in the reply dated 6 November 2017, I received utter nonsense from the Finance Minister which justified his being awarded “Asia’s Worst Finance Minister 2016” by FinanceAsia.

Dato’ Seri Najib Razak responded by saying this was because of the agreement’s confidentiality clause to protect the commercial considerations of both parties. He goes on to say that these terms are consistent with the key terms used in the market among other similar transactions.

The Minister chose to ignore is that both Aroma Teraju and 1MDB are wholly-owned by MOF. What is the purpose of this secrecy when both parties in the agreement are owned by the Government?

There is only one reason for invoking this confidentiality clause, and it has nothing to with the purported “commercial considerations”. It is to cover up the fact that MoF paid over-the-top to buy back a fraction of the prime land it had sold at bargain basement prices to 1MDB in 2010.

Based on the 2011 1MDB Financial Statements, the 70 acre TRX land was acquired from the Government at the value RM194 million, or approximately RM64 per square feet in 2010.

However, in the same year that Aroma Teraju acquired the above-mentioned piece of land from 1MDB, the latter also sold other parcels of TRX land to other government related institutions.  Lembaga Tabung Haji acquired 1.6 acres for RM188.5 million or more than RM2,800psf.  Affin Bank, a subsidiary of Lembaga Tabung Angkatan Tentera (LTAT), acquired 1.25 acres for RM255 million or nearly an eye-popping RM4,700psf.

If Aroma Teraju paid any where near the prices paid by Tabung Haji or Affin Bank, it would mean that Malaysian tax-payers would be been ripped off beyond their wildest imagination.  Very simply, 1MDB purchased land from the Government at RM64psf and sold a fraction of the piece of undeveloped land back to the Government five years later at an exhorbitant thousands of ringgit per square feet.

I challenge the 1MDB, Arul Kanda or the Finance Minister to deny my allegations with facts and figures. Otherwise, it would merely confirm that the secrecy over a simple sales and purchase agreement between two government entities is really to cover up another one of the daylight robberies against the Malaysian tax-payers to bail out the debt-stricken 1MDB.

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Malaysians are stunned that failed 1MDB CEO, Arul Kanda is even better placed today to take over Khazanah’s Managing Director role in the near future.

According to the recent Singapore Straits Times’ report on 2 November 2017, the prospects of a Khazanah outsider such as Arul Kanda to come into the position is more likely following the resignation of Tan Sri Nor Mohamed Yakcop from Khazanah's board.

The Khazanah panel overseeing the leadership succession was until recently headed by its former deputy chairman, Tan Sri Nor Mohamed Yackop, who recently resigned from the fund following the completion of a Royal Commission of Inquiry into multi-billion dollar losses at Malaysia's central bank stemming from foreign exchange trading in the 1990s.

The Straits Times reported that senior Khazanah sources said that Mr Nor Mohamed was a strong advocate for Mr Azman's replacement to come from within Khazanah, and his departure could strengthen the push by vested interest groups to get an outside candidate.

Apparently senior politicians and well-connected business people close to Arul are lobbying Prime Minister Dato’ Seri Najib Razak who, as Khazanah's chairman, would have the final say on who replaces Mr Azman.  It is not hard to imagine Najib giving the job to the man who has willfully bent over backwards to defend his image and paint 1MDB as a success.

However, appointing Arul Kanda to lead Khazanah would only be an absolute disaster for the sovereign wealth fund.

Arul Kanda has had an utterly shameful record helming 1MDB. The debt stricken fund is supposed to be saved with the “rationalisation plan” he masterminded. However, to date, 1MDB has only found itself in a deeper hole with no sight of the end of the tunnel.

1MDB’s attempt to sell 60% of Bandar Malaysia was an abject failure. The Ministry of Finance had to terminate the contract because of the failure of the purchaser to make payments according to schedule despite repeated extensions.  To rub salt onto would, it was the Minsitry of Finance which refunded the RM741 million ‘deposit’ despite it being 1MDB which received the monies.  The fact that Arul Kanda was sacked by the Ministry of Finance from Bandar Malaysia Sdn Bhd practically says it all.

Just two weeks ago, I had reminded the Prime Minister that 1MDB’s sale of power assets to China General Nuclear Corporation incurred RM2.3 billion in losses. 1MDB’s reply, drafted by Arul Kanda himself, had tried to ‘erase’ the losses with an alleged RM2.13 billion in dividends received by the company.

However, the 1MDB President and CEO conveniently forgot to also include the interest cost which 1MDB had incurred to finance the acquisition of the power assets.  As I said before, only a half-baked CEO would say that it’s made money off dividends without accounting for the interest bill.

While being exceedingly creative with the accounts on its own should have disqualified Arul Kanda from even being considered, what is worse is his brazen lies told to the Public Accounts Committee (PAC) with regards to mysterious assets owned purportedly owned by 1MDB in its overseas subsidiaries.

For example, he has continued to insist on the monetisation of US$1.3 billion worth of investment ‘units’ in Singapore even though its subsidiary that holds the units has already been uncovered as a complete scam.

Today we know that the entire redemption exercise was a Ponzi-like round-tripping exercise using part of the proceeds from a Deutsche Bank loan to pretend that it’s the receipt from the ‘units’ redemption exercise.

Malaysians must protest the fact that a man who has proven incompetent and devoid of integrity is even considered for the post of Managing Director at Khazanah.  If 1MDB, with debts up to RM50 billion at its peak could be brought to ruins, what more could happen at the RM145 billion Khazanah Nasional.

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With outrageously creative accounting and a preposterous tax-payers’ bailout admitted by 1MDB itself, perhaps 1MDB will indeed be “on track to realise a profit”.

On Wednesday, I had accused the Prime Minister of peddling lies with the outrageous claim that 1MDB “is on track to realise a profit”, when 1MDB is nothing but a shell today laden with some RM40 billion of outstanding debt (including debts that have been assumed by the Ministry of Finance (MoF) over the past year).

1MDB tried vainly to defend the Prime Minister yesterday by spewing another set of half-truths and establish new standards of creative accounting.

I had, not for the first time, argued that 1MDB made some RM2.3 billion of losses from the sale of its acquired power plants to China General Nuclear Corporation.  And not for the first time, 1MDB tried to argue that 1MDB didn’t lose money because of dividends purportedly received from the energy subsidiaries.

Let me remind the CEO of 1MDB, Arul Kanda again - he had conceded to the Public Accounts Committee (PAC) that were the purported RM2.18b in dividends to be counted, he also needs to account for the huge RM3.5 billion in interest costs on the loan is taken to purchase those assets in the first place.

Only a half-baked CEO would tell his shareholders that he made money from the dividends, without taking into account the massive interest bill which was substantially higher than the purported dividends!

Worse, when I checked the financial statements of 1MDB’s energy subsidiaries, there was not a single year where they declared dividends to their 1MDB parent.  This meant that Arul Kanda cooked up the entire ‘dividend’ bullshit.

The Prime Minister himself declared that the proposed 1MDB rationalisation exercise practically ‘complete’ way back on 31 December 2015.  He said then, “it is therefore clear that 1MDB’s major challenges are now behind it as I promised they would be last summer.”

Except two years later, the plans are not only far from complete, they have completely unravelled.

As I’ve already highlighted previously, the RM7.41 billion deal to sell 60% of Bandar Malaysia which was the pillar of the 1MDB rationalisation exercise, has collapse spectacularly with no end in sight.

1MDB which had no ability to develop the massive property project had surrendered Bandar Malaysia back to the MoF, as proposed by the Public Accounts Committee (PAC).  And as 1MDB rightly pointed out, I was part of the committee which made the particular recommendation.

However, what PAC did not at any point in time recommend for the RM2.4 billion sukuk bond 1MDB borrowed for Bandar Malaysia to be also handed to MoF.  This is because the Auditor-General has confirmed that hardly a single sen from the above bond was actually spent for the purposes of the Bandar Malaysia project – a fact which was also conceded by Arul Kanda to the PAC.

Most shockingly however, as admitted explicitly for the first time by 1MDB in its statement to condemn me, was that 1MDB is expecting to “receive payments, over time” from MoF for the above debt-laden asset transfers.

In layman terms, it means that not only the tax-payers were forced to assume 1MDB’s debt, we bloody fools have to even pay 1MDB to assume these debts!

The above doesn’t yet include the fact that MoF has only recently in August, directly or indirectly bailed out 1MDB by making some US$600 million (RM2.5 billion) in settlement payments to Abu Dhabi’s IPIC.

Perhaps, I was wrong after all.  Despite being a shell laden with some RM40 billion of debts, Dato’ Seri Najib Razak was right to say that 1MDB “is on track to realise a profit” – with outrageously creative accounting and a preposterous tax-payers’ bailout.

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Arul Kanda’s disastrous record at 1MDB makes him the least qualified to take over the reigns of Khazanah Nasional

Malaysians were shocked to read the report by The Malaysian Insight on Thursday that Arul Kanda is one of the candidates being considered for the post of Managing Director of Khazanah Nasional.
The online portal reported that “a selection panel has been formed to look through the candidates who can take over from Azman (Mokhtar) whose contract expires in two years” and Arul Kanda is one of two outsiders being considered.

After the disastrous and disgraceful record at the debt-ridden 1MDB since his appointment in January 2015, Arul Kanda should be automatically disqualified from even consideration at the country’s sovereign wealth fund.

The latest catastrophe is the failure of 1MDB to fulfil its settlement obligations with Abu Dhabi’s International Petroleum Investment Corporation (IPIC) in a timely matter.  Despite claiming since April 24 this year that its repayment to IPIC would be fulfilled via the “monetization” of 1MDB’s investment ‘units’ last known to be held in Singapore, IPIC had to twice extend the deadline for the first instalment payment scheduled on 31 July 2017.

1MDB has since managed to pay the “equivalent” of US$350 million on 11 August and would have up to 31 August to settle the balance of US$300 million.  However, even the above partial payment of the first instalment is shrouded in mystery as it is clear that the 1MDB ‘units’ have not been monetized while the source of the 1MDB funds were unclear.

In addition, Arul Kanda has botched the so-called rationalisation with the original attempt to sell 60% of Bandar Malaysia to the Iskandar Waterfront Holdings (IWH) Sdn Bhd-led consortium.  Despite 1MDB having collected 10% of the sale amounting to RM741 million as “deposit”, the Ministry of Finance (MoF) had to terminate the contract due to IWH’s repeated failure to fulfil its obligations, it was MoF which had to refund the RM741 million “deposit” to the purchaser.

However, the worst deed of Arul Kanda has been to repeatedly lie to the Auditor-General, the Public Accounts Committee and Malaysians in general, to cover up the 1MDB scandal to ensure that those behind the multi-billion dollar misappropriation in the company would be let off scotfree.

For example, Arul Kanda is fully aware that 1MDB’s investment ‘units’ previously held at the now defunct BSI Bank, Singapore are fraudulent and more importantly are worth at best a tiny fraction of their purported US$2.318 billion in valuation.  The fraud has been uncovered by the United States Department of Justice, as reported in the additional civil suit filed in June this year.

However, despite having access to all the material documents and information, Arul Kanda has continued the pretence that 1MDB had already redeemed some US$1.3 billion worth of the ‘units’.  At one point Arul Kanda even told the 1MDB Directors that he has “seen the bank statements” that 1MDB had already received the proceeds in ‘cash’.

Today we know that the entire redemption exercise was a Ponzi-like round-tripping exercise using part of the proceeds from a Deutsche Bank loan to pretend that it’s the receipt from the ‘units’ redemption exercise.

Malaysians can only shiver in trepidation at the thought that a RM145 billion-Khazanah Nasional, which is relatively healthy today, would be helmed by the same person who hammered the final nail in 1MDB’s coffin.

The only thing more shocking I heard when I started sniffing around with regards to The Malaysian Insight report is the fact that Arul Kanda is also awaiting possible appointment as a Senator which comes with a Ministerial position.  If that were true, then it would be proof that the Prime Minister, Dato’ Seri Najib Razak would only appoint those without a shred of honesty and integrity to the Cabinet.

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Who made the decision to terminate the agreement for the sale of Bandar Malaysia to the consortium led by Iskandar Waterfront Holdings?

The new season of the blockbuster 1MDB political drama thriller could not have kicked off on a more suspenseful note. Just when everyone thought (and some were hoping) that the show has run its course and the audience have lost interest, the producers of the show have returned with some impeccable scriptwriting to keep Malaysians glued to the ever-evolving scandal.

Soon after the IPIC-1MDB debt “settlement” agreement where the Ministry of Finance (MoF) agreed to assume the guarantee provided by IPIC for 1MDB’s US$3.5 billion worth of bonds, MoF announced that the agreement to sell a 60% interest in Bandar Malaysia to a consortium led by Iskandar Waterfront Holdings (IWH) has been terminated.

The world was stunned when MoF’s wholly-owned subsidiary, TRX City Sdn Bhd, which owns Bandar Malaysia announced that the deal with the IWH consortium had collapsed because the latter did not meet payment obligations for its 60 percent stake. The consortium had disputed this claim.

While clarity on the above dispute remains unclear – with neither TRX City or IWH providing any evidence to substantiate their claims, there is now a new mystery as to who authorised the decision to terminate the agreement.

Based on Malaysiakini’s report entitled “Arul is against termination of Bandar M'sia deal”, government sources told the news portal that the RM7.41 billion deal was terminated without notifying Arul Kanda, the President and CEO of 1MDB.

However, at the material times, Arul Kanda was also the Chairman of Bandar Malaysia Sdn Bhd as well as a Board of Director of TRX City, before he was unceremoniously dumped by MoF four days after the termination announcement.  The Malaysian Insight had reported sources from MoF citing a “conflict of interest” on the part of Arul Kanda.

While we are keen to find out what exactly is the “conflict of interest” which necessitated Arul’s immediate sacking, we are even more interested to know who actually made the decision to terminate the agreement.

Since Arul Kanda was oblivious to the entire termination exercise, it meant that the Board of Directors of both TRX City and Bandar Malaysia never deliberated and made a decision on the matter involving a whopping RM7.41 billion transaction.

The Malaysian Insight reported that the decision to remove Arul was made by Finance Minister Dato’ Seri Najib Razak and Treasury Secretary-General Tan Sri Irwan Serigar Abdullah.  The question then arises as to whether Dato’ Seri Najib Razak made the unilateral decision to terminate the agreement.

If so, it should be clarified as to what powers does the Finance Minister have to make material and critical decisions of Government companies unilaterally, by-passing the companies’ board of directors?  Did Dato’ Seri Najib Razak abused his powers as the Finance and Prime Minister to terminate the IWH agreement?

It should be recalled that one of the biggest controversies over the 1MDB scandal was the powers granted to the Prime Minister to make all final key decisions in the investment company.  Clause 117 of 1MDB’s Memorandum of Articles and Association dictates that the Prime Minister must give his “written approval” for any of 1MDB’s deals, including the firm’s investments or any bid for restructuring.

It was Dato’ Seri Najib Razak who gave the ultimate approval for all the billions of ringgit of lost investments carried out by 1MDB with Petrosaudi International Limited and Aabar Investment PJS Limited.

The controversial clause has since been deleted upon recommendation by the Public Accounts Committee.  However, it appears that Dato’ Seri Najib Razak is still calling the shots behind the scene, bypassing key Treasury guidelines, as well as all forms of corporate governance and accountability which we have demanded to avoid a repeat of the 1MDB imbroglio.

We await the next episode with bated breath.

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The Ministry of Finance must explain the alleged “conflict of interest” which was the basis Arul Kanda was sacked from the Boards of TRX City and Bandar Malaysia

Last week, I had asked the Ministry of Finance (MoF) to sack Arul Kanda, if he failed to offer his resignation for his role in the entire collapse of the 1MDB rationalisation exercise.

Two quick succession of events over the past few weeks have completely unravelled the painstaking effort by the Najib administration to put a lid on the 1MDB scandal over the past two years.

Firstly, the MoF agreed to assume the liabilities amounting to USD3.5 billion for bonds issued by 1MDB but previously guaranteed by Abu Dhabi's International Petroleum Investment Corporation (IPIC). This concession only confirms what 1MDB had repeatedly claimed, that it has already paid IPIC USD3.51 billion is untrue.

Instead the funds were paid to a fraudulent company, Aabar Investment PJS Limited set up in the British Virgin Islands "Aabar(BVI)", which IPIC had denied any relation to. The question hence arises as to where did this money go to ultimately, especially since Aabar(BVI) has already been liquidated.

Secondly, Arul Kanda needs to be responsible for the collapse of the RM7.41 billion sale of 60% interest of Bandar Malaysia to a consortium led by Iskandar Waterfront Holdings (IWH). The question also now arise as to who will refund the 10% deposit or RM741 million which have been paid to 1MDB as Bandar Malaysia has since been taken over by MoF in March this year.

In a surprising turn of events, the MoF has actually sacked Arul Kanda from the Board of Directors of Bandar Malaysia and TRX City, even as he remains as the President and CEO of 1MDB.

The Malaysian Insight quoted sources that “there are potential conflicts of interest”.  This is shocking as Arul should only be acting in the interest of the Malaysian Government or by extension, the tax-payers of Malaysia.  What “conflict of interest” could it be which resulted in his sudden removal from the Board of Directors?

Arul Kanda tried to make light of the situation by claiming that it is the prerogative of the Ministry of Finance to remove him from the Boards.  He argued, even as he has yet to receive notification of his removal, that the two companies were transferred from 1MDB to Minister of Finance Inc (MOF Inc) with effect from March 31, 2017.  Hence “it is only reasonable to expect that MOF Inc will seek to appoint new directors, per its discretion”.

Few would believe that his removal really has nothing to do with the collapse of the Bandar Malaysia deal, one way or another.  If the intent was to remove him as ownership has been transferred to the Ministry of Finance, why wait until 2 days after the IWH deal turn sour?  Why didn’t the switch take place in March itself, when the transfer was executed?

Regardless, the Ministry of Finance must come clean with the very serious issue of “conflict of interest” which has resulted in Arul’s sacking.

The next question on everyone’s mind is, now that Arul Kanda has lost the confidence of the Ministry of Finance, will his role as the President and CEO of 1MDB remain tenable, and for how long?

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Incoming RM42 billion taxpayers' bailout: Bandar Malaysia deal collapse, sale of Edra Energy at a loss and 1MDB-IPIC “settlement” mark total failure of 1MDB “rationalisation exercise”

The entire 1MDB “rationalisation exercise” announced as “completed” by the Prime Minister on 2016 New Year’s Day has been completely unravelled with the latest announcement that the RM7.41 billion sale of 60% equity interest in Bandar Malaysia has collapsed.

The Government of Malaysia, together with its debt-stricken wholly-owned subsidiary, 1MDB has embarked on the above exercise to shed itself of its mountain of borrowings, which at its peak, exceeded RM50 billion.

The rationalisation exercise commenced with the sale of 1MDB’s wholly-owned subsidiary, Edra Energy Sdn Bhd, which held all of 1MDB’s energy assets.  Edra Energy had acquired the power plants for a total of RM12.1 billion.  In addition, the Government of Malaysia had subsequently extended of concession period of the above plants, as well as awarded several new power plant concessions to 1MDB.

However, despite a global open tender, 1MDB could only secure the best bid of RM9.83 billion which resulted in a direct loss of RM2.27 billion.  The losses did not yet include the interest cost of funds borrowed to finance the above acquisitions which amounted to more than RM3 billion over the period.

Worse, the proceeds of the above sale of Edra Energy did not go towards the repayment of the US$3.5 billion worth of bonds which were raised for the power plant acquistion in 2012.

As a result, in a recently announced “settlement” agreement with International Petroleum Investment Corporation (IPIC), who guaranteed the US$3.5 billion worth of bonds, the Ministry of Finance (MOF) had agreed to assume the liability of the US$3.5 billion bonds and relieve IPIC of their obligations.

This had come as a complete shock to Malaysians as 1MDB and the Finance Ministers had previously insisted that 1MDB had already made payments amounting to US$3.51 billion to IPIC and/or its subsidiaries between 2012 and 2014.

Hence the outcome of the “settlement agreement” was that Malaysians will have to foot US$7.01 billion to discharge ourselves from the US$3.5 billion of 1MDB borrowings which 1MDB took to acquire the above power plants.  The power plants, in turn have already been disposed of, but without the proceeds from the sale being used to settle the US$3.5 billion bonds.

Now with the latest collapse of the proposed sale of 60% interest in Bandar Malaysia to the consortium led by Iskandar Waterfront Holdings Bhd (IWH), the entire “rationalisation” exercise architected by Arul Kanda and hailed by the Prime Minister and Cabinet has been completely unravelled.

The devastating implication of the rationalisation failure staring at our faces is staggering.  Because 1MDB simply does not have any more substantial tangible assets or cash in its books, the Malaysians tax-payer will have to pay for most of 1MDB’s still-outstanding debts including:

(i)             RM5 billion 30-year bond guaranteed by the Federal Government issued in 2009;
(ii)           US$3.5 billion 10-year bonds issued in 2012, now guaranteed by MOF Inc.;
(iii)          US$3 billion 10-year bond issued in 2013, guaranteed with a ‘Letter of Support’ issued by the Minister of Finance, Dato’ Seri Najib Razak;
(iv)          US$1.23 billion borrowed from IPIC in 2015, guaranteed by MOF Inc,;
(v)            RM800 million loan from SOCSO in 2010, guaranteed by the Federal Government; and
(vi)          RM2.4 billion sukuk issued in 2013, which have already been assumed by MOF

The above sums up to RM8.2 billion and US$7.73 billion, or a combined total of RM41.7 billion

While I have called for Arul Kanda, the 1MDB President and CEO to resign or be sacked yesterday, it is the Prime Minister, Dato’ Seri Najib Razak who must be ultimately accountable.

He is not only the official with the ultimate decision-making authority in 1MDB as specified in the company’s Memorandum and Articles of Association, his promises of resolution of the above scandal without a bailout by the Malaysian Government have been irredeemably broken.

What’s more, banking documents exposed by the United States Department of Justice (US DOJ) have shown Dato’ Seri Najib Razak to have received in his personal bank account in Malaysia, the sums of US$731 million originating from 1MDB.  He has never denied the US DOJ allegations and steadfastly refused to provide any explanations to the Parliament or the Malaysian public.

With Dato’ Seri Najib Razak’s iron-grip control over UMNO and Barisan Nasional, the country’s legislative, enforcement and prosecution institutions, it is now up to Malaysians to sack the Prime Minister in the coming general elections to ensure that he is made accountable for the single biggest financial scandal in the history of Malaysia.

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Who will refund the RM741 million deposit paid by Iskandar Waterfront Holdings to acquire the now aborted Bandar Malaysia equity interest – 1MDB or the Ministry of Finance?

The announcement by TRX City Sdn Bhd, now a wholly-owned subsidiary of the Ministry of Finance (MOF), that the RM7.41 billion sale of 60% equity interest in Bandar Malaysia has collapsed did not come as a surprise at all.

I have previously questioned 1MDB and the MOF as to why the prized asset was sold to a consortium, led by Iskandar Waterfront Holdings Bhd (IWH), whose total net assets is worth barely RM3.8 billion, less than half the above transaction value.  For the financial year ending 31 December 2015, the company’s net profit was before tax was only RM170.4 million.

Despite IWH clearly attempting to bite off more than it can chew, 1MDB had proudly announced on 31 December 2015 that IWH-Bandar Malaysia sale agreement “marks the final major milestone in the 1MDB rationalisation plan as presented to the Cabinet of Malaysia on 29 May 2015”.

1MDB President and CEO, Arul Kanda had boasted that “the [IWH] Consortium is a highly attractive development partner for Bandar Malaysia and their bid was fully in line with the objectives outlined in the RFP, namely value maximisation, acceptable commercial terms and certainty of transaction execution.”

The deal was expected to be completed by June 2016 but was delayed clearly by IWH’s inability of meet the agreed payment terms and schedules.  My questions in Parliament on the project status in November 2016 and April 2017 were met with cryptic replies from the Minister Finance, which revealed that the IWH consortium will pay a 6% interest on outstanding payments until the sums are fully-paid in 2023.

With the deal termination, the MOF have now got to independently service the RM2.4 billion of sukuk which 1MDB took for the purposes of the Bandar Malaysia project, but of which not a single sen was utilised for the property development.

MOF will also have to bear the burden of the making payments to Perbadanan Pewira Hartanah Malaysia, a wholly-owned subsidiary of the Armed Forces Fund (LTAT) which received a RM2.7 billion contract to relocate the Air Force Military Base, of which nearly RM2 billion was still outstanding.

Then there is now the all-important question as to who will refund the RM741 million deposit paid to 1MDB vby the IWH Consortium?

Will 1MDB now refund the deposit, or will MOF have to once again bailout 1MDB by forking out the RM741 million as a result of the 1MDB real estate fiasco?

Arul Kanda must now resign as the President and CEO of 1MDB to take responsibility for the disastrous fiasco and embarrassment caused to the Government of Malaysia.  If Arul Kanda does not take responsibility for his failure, then we call on the Ministry of Finance, whose Treasurer-General Tan Sri Irwan Serigar is also the Chairman of 1MDB to terminate Arul Kanda’s contract.

Arul Kanda has clearly failed to deliver on his promise and has displayed more hype than substance.  His severe error of judgement, choosing the IWH Consortium for the purported “certainty of transaction execution” have now caused massive losses for the MOF.

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1MDB “Settlement” with IPIC an affirmation by 1MDB that they have lost US$3.51 billion purportedly paid to IPIC and its subsidiary, Aabar Investment PJS

1MDB and IPIC have finally announced the conclusion of the much awaited “settlement” to the London arbitration proceedings filed by IPIC against 1MDB.

What is most interesting, who the winner and loser are, can be clearly deduced by their respective statements.

1MDB’s statement was short and sweet, providing scant details other than the fact that “1MDB will, amongst others, make certain payments to IPIC and will assume responsibility for all future interest and principal payments for two bonds issued by 1MDB Group companies due in 2022”.  No figures are stated.

IPIC on the other hand made a detailed announcement to the London Stock Exchange clearly stating that

(i) IPIC will receive US$1.205 billion in 2 equal tranches on 31 July 2017 and 31 December 2017.

(ii) 1MDB and MoF Inc., will assume all responsibility of future interest and principal payments of US$3.5 billion worth of bonds, previously guaranteed by IPIC.

The implication between the 2 statements is staggering.

1MDB tried to paint a rosy picture of the settlement – that the dispute has been resolved with no hard details.  On the other hand, IPIC’s clearly showed that they got exactly what they wanted, the return of US$1.205 billion worth of cash advances to 1MDB since June 2015 and to discharge itself entirely as a guarantor for 1MDB’s US$3.5 billion worth of bonds.

However, of greater significance is the fact that 1MDB’s concession to the above settlement terms is a direct affirmation and confirmation that 1MDB have lost US$3.51 billion worth of payments which have purportedly been paid to IPIC and its subsidiary, Aabar Investments PJS.

Last year, 1MDB and its CEO, Arul Kanda, have informed the Auditor-General (AG) and the Public Accounts Committee (PAC) that the following payments were made to Aabar Investments PJS Limited, a separate company registered in the British Virgin Islands (“Aabar(BVI)”).  It has already been widely known, and confirmed by the United States Department of Justice (US DOJ) that Aabar (BVI) is a fraudulent impostor company.  However, 1MDB and Arul Kanda continued to insist that it is a wholly-owned subsidiary of the IPIC group.

As outlined on Page 92 of the PAC Report on 1MDB, 1MDB claimed it has paid Aabar (BVI) the amounts of

(i) US$1.367 billion as a “security deposit” for the US$3.5 billion of bonds in 2012 

(ii) US$993 billion for the termination of options granted to IPIC or Aabar in November 2014; and

(iii) Additional sums of US$855 million and US$295 million as “top-up security deposit” in September and December 2014 respectively.

These sums, as emphasized in the PAC Report, could not be verified by the AG as 1MDB has refused to provide the relevant proof and documentation of the transactions, despite repeated requests over months.

The question then is, if we have indeed paid the above sums, totalling US$3.51 billion to IPIC or its subsidiaries, why then are we allowing IPIC to relieve itself an ultimate guarantor for the bonds and why is MOF Inc, assuming the US$3.5 billion of liability?

Is 1MDB and Arul Kanda telling us that despite having paid US$3.51 billion to IPIC, we still owe the US$3.5 billion we borrowed?  Putting it simply, are Malaysians to fork out a whopping US$7.01 billion to settle 1MDB’s US$3.5 billion of bonds?!

The only explanation for the incredulous situation is that the US$3.51 billion was never paid to IPIC as claimed.  Instead, the funds were misappropriated or laundered as documented widely in the US DOJ charges against Jho Low and company, and Singapore prosecution its local banking officers.

Therefore, we call upon the Prime Minister, who is also the Minister of Finance, Dato’ Seri Najib Razak to come clean on the discrepancy resulting from the “settlement” with IPIC, since Malaysians have now to pay more than double what was actually borrowed by 1MDB.

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Which Finance Minister in the world worth his salt would tell you that the debts of its wholly-owned subsidiaries are not the debt of the parent company?

First of all, I would like to thank the Second Finance Minister, Dato’ Seri Johari Abdul Ghani for issuing the official statement “Some Facts for Tony Pua”, in response to my earlier press statement on this issue.

This is because the Minister confirmed the very facts which I had stated.

1.     The Minister confirmed that real estate owned by the Government was sold to 1MDB at “nominal” prices.  A check on 1MDB financial statements would show that the 70-acre Tun Razak Exchange (TRX) land was priced at RM64 per square feet (psf) for a total of RM194 million, while the 486-acre Bandar Malaysia was at RM72psf for a total of RM1.67 billion.

2.     The Minister concurred that the 1MDB real estate companies took loans amounting to RM800 million from SOCSO and another RM2.4 billion worth of sukuk for Bandar Malaysia.

3.     The Minster also confirmed that the above debts amounting to RM3.2 billion are no longer under the books of 1MDB as they have been assumed by the Ministry of Finance.

The question is, how else to describe the above transactions other than a bailout?  The Government granted these parcels of land at “nominal prices” to 1MDB, but when effectively less than 50% of these parcels of land were ‘returned’ to the Government, they came with an attached liability of RM3.2 billion?

The Minister failed to mention the fact that 1MDB has sold 30.5 acres of TRX and 40% of Bandar Malaysia for RM3.5 billion and RM7.8 billion respectively where the proceeds are due entirely to 1MDB.  None of it went towards the settlement of these debts.  So why is it that 1MDB gets to keep all the astronomical profits, while the Ministry of Finance is left to carry all the liabilities in their entirety?

Dato’ Seri Johari tried to wriggle his way out of it by claiming that the above were merely the “operating debts” of the real estate subsidiaries.  Malaysians fail to understand his convoluted argument that “there is therefore a clear distinction between 1MDB debts, which will not be taken over by MOF Inc, and the BMSB/TRXC project company operating debt, which are part of the assets and liabilities of the company…”

I hope that Dato’ Seri Johari, who was formerly a corporate man himself, did not actually draft the statement because it makes no financial sense.  No Finance Minister worth his salt would argue that the “operating debts” of a wholly-owned subsidiary does not belong to the parent company’s accounting books.

The Second Finance Minister might do well to consult 1MDB’s newly appointed auditors, Parker Randall for an accounting opinion before issuing such embarrassing statements.

What is worse is that, even if Dato’ Seri Johari’s illogical statement holds, he has failed to acknowledge that both the Auditor-General and the Public Accounts Committee (PAC) have discovered that the bulk of the money raised from the borrowings did not go towards the real estate projects!

Page 43 of the PAC Report would tell you that out of RM800 million borrowed from SOCSO, only RM338 million went towards 1MDB Real Estate and its projects.  The balance was “advanced” to the 1MDB parent company for other purposes.

Even more shocking, Page 45 of the same report would tell you that not a single sen of the RM2.4 billion sukuk raised went towards the development of Bandar Malaysia or TRX, or any other 1MDB real estate projects!  The net proceeds from the sukuk were “advanced” to the 1MDB parent company for other purposes as well as to refinance previous borrowings, which were also utilised for non-real estate purposes.

The 1MDB CEO, Arul Kanda himself, confessed to the Public Accounts Committee that due to cashflow difficulties within the 1MDB group, these funds were “diverted” from their intended purposes.

Hence while the intent of the RM3.2 billion of borrowings was perhaps “operational” as emphasized by the Second Finance Minister, in reality, the overwhelming bulk of the borrowings was brazenly utilised for “non-operational” purposes.

Therefore, using Dato’ Seri Johari’s own argument, since more than RM2.8 billion of the borrowings were “non-operational” in nature, 1MDB must pay back these “advances” to MOF.

Otherwise, it’s a triple-whammy for the Malaysian tax-payers – where (1) 1MDB made multi-billion ringgit profits from nominally priced land from the Government to partially cover up tens-of-billions of ringgit of losses from other 1MDB transactions; (2) the Government takes back less than 50% of the land attached to a RM3.2 billion liability and (3) the RM3.2 billion borrowed was never invested in the land in the first place, which means that MOF itself has to further invest in the projects to realise their value.

The Malaysian tax-payers cannot be more screwed and victimised than the extra-ordinary bailout that is taking place right before our very eyes.

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1MDB, a simple yes or no will do: have billions of dollars of 1MDB's money been “misappropriated” and “embezzled”?

1MDB must not evade the factual allegations laid out by the US Department of Justice but answer the simple question if billions of dollars of its money have been “misappropriated” and “embezzled”.

In the face of allegations by the United States (US) Department of Justice (DOJ) that US$3.5 billion or more have been misappropriated and embezzled from 1MDB, the state-owned investment fund provided the world with the most ludicrous response.

1MDB merely responded that “it is not a party to the civil suit, does not have any assets in the United States of America, nor has it benefited from the various transactions described in the civil suit”.

The outstanding management led by Arul Kanda at 1MDB must surely realise that the DOJ never made 1MDB “party to the civil suit”. Neither did they accuse 1MDB of having “assets in the United States of America”.

The US DOJ has laid out the entire scam claiming 1MDB was a victim of a multi-billion-dollar international fraud.

Hence the question 1MDB must respond to is whether it finally accept that it is a victim of a treasonous fraud in the light of the lorry-load of hard evidence presented.

Or is Arul Kanda and his team still oblivious to the entire scam where multi-billion dollars have been lost?  How difficult is it for these super-clever to executives to figure out if the money is missing or otherwise?

For example, the BSI Bank Singapore has been shut down, but where is the US$940 million which was purportedly parked in the bank?  Did it vanish into thin air as well?

Or the purported US$1.56 billion of “investments” in the dodgy investments funds identified by the US DOJ – Devonshire, Enterprise and Cistenique – are they still in existence?

Or the fact that the US DOJ, like Bank Negara Malaysia, has established clearly that Good Star Limited, which received US$1.03 billion directly from 1MDB, is indeed owned by Low Taek Jho, and not by Petrosaudi International Limited as claimed – is 1MDB still in denial?

Or, more plausibly, Arul Kanda and his team are conniving conspirators in the entire scam. Is he is doing his utmost to cover up the scam which involved the Malaysian Prime Minister himself embezzling more than US$700 million into his personal account?

We call upon the newly appointed Board of Directors of 1MDB, led by its new Chairman, the Treasury-General, Tan Sri Irwan Serigar to not repeat the disgraceful failures of the previous Board.  He must, as the country’s top financial civil servant, act without fear or favour in the interest of the Malaysian tax-payers.

If the President of 1MDB, Arul Kanda is not acting in the interest of the shareholder, then fiduciary duty demands that Tan Sri Irwan Serigar sack the entire 1MDB top management with immediate effect. The Chairman must state openly, if 1MDB has indeed been a victim of fraud and seek the return of the pilfered proceeds back to the country.

In the light of the size and scale of the scandal, the Board of Directors must also place 1MDB under temporary management by the remaining Big Four audit firm which has not been tainted by the scandal, PriceWaterhouse Coopers.

If Tan Sri Irwan Serigar fails to act in the interest of Malaysian tax-payers, then he himself will be guilty of conspiring with the evil wrong-doers which committed the mult-billion dollar heist of the century.  Pakatan Harapan leaders will then demand for the Treasury-General to be sacked in disgrace.

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Are the new 1MDB Board of Directors led by Treasury-General Tan Sri Irwan Serigar going to turn a blind eye after the Sarawak Report exposed an outrageous round-tripping fraud involving US$1.22 billion?

The Sarawak Report first exposed the banking documents on 11 July which showed that 1MDB Global Investment Limited (1MDB GIL) transferred US$1.28 billion between September to November 2014 to the fraudulent Aabar Investment PJS Limited which was incorporated in the British Virgin Islands (“Aabar(BVI)”).

Yesterday, the Sarawak Report leaked more explosive sections from the Auditor-General’s Report relating to transactions between Brazen Sky Limited, another 1MDB subsidiary which held 1MDB’s controversial investments with a little-known Cayman Islands investment fund and 1MDB GIL.

The Sarawak Report concluded based on the additional information from the classified report, 1MDB clearly concocted a round-tripping exercise to give the impression that it has successfully redeemed cash from the Cayman Islands investment.  The fraudulent transactions were apparently so convincing that 1MDB’s auditors, Deloitte Malaysia happily signed off the company’s audited accounts.

Assuming the leaked copy of the AG’s Report is genuine, this is a massive allegation because for the first time hard evidence is shown to incriminate 1MDB officials as parties colluding with the owners of the fake Aabar (BVI) - Mohamed Al Husseiny and Khadem al Qubaisi.

Those incriminated include Datuk Shahrol Halmi, the former 1MDB CEO who was instrumental in 1MDB’s investment in the Cayman Islands fund; Mohd Hazem Abdul Rahman, who was the CEO when the above round-tripping transactions took place and Arul Kanda Kandasamy, the current 1MDB President who is covering up the above shenanigans.

The exposé by Sarawak Report would hugely complicate 1MDB’s case in the arbitration proceedings brought by International Petroleum Investment Corporation (IPIC) against 1MDB involving US$6.5 billion.  IPIC is the parent company of Abu Dhabi’s Aabar Investment PJS, both of whom have officially denied that Aabar (BVI) is ever related to their group.  1MDB’s knowing participation with Aabar (BVI) to defraud both IPIC and the Malaysian government would certainly compromise 1MDB’s claims that it was an innocent victim to IPIC’s then employees Al Husseiny and Al Qubaisi.

What is more immediately important however, is what is the new 1MDB Board of Directors going to do about this new information, now that it has been made public?

The previous Board of Directors led by Chairman Tan Sri Lodin Wok Kamaruddin were forced to resign in shame after the Public Accounts Committee (PAC) condemned them in its report on 1MDB to the Parliament.  These Directors failed miserably to carry out their fiduciary duties and responsibilities with any degree of diligence.

A recent exposé by Sarawak Report also showed that the previous board has blindly signed a retrospective approval of the US$1.2 billion payments by 1MDB GIL to Aabar (BVI) more than a year after these fraudulent transactions took place.  These good-for-nothing “cari makan” directors included Tan Sri Ismee Ismail, Tan Sri Ong Gim Huat, Ashwin Valiram, Datuk Shahrol Halmi and Arul Kanda.

The question now is, will the new Board of Directors appointed on 31 May 2016, led by Treasury-General, Tan Sri Irwan Serigar do a better and proper job?

Together with the other 2 new Board Members, Datuk Kamal Mohd Ali and Dato’ Norazman Ayub, are they going to demand answers to these new explosive allegations and act on them – including but not limited to filing police reports?  It is part of the directors’ roles and responsibilities to investigate cases of fraud and report them accordingly to ensure the interest of the Malaysian tax-payers are fully protected.

Or will they similarly turn a blind eye on indisputably, the single largest case of financial fraud in Malaysia’s history?

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Arul Kanda must explain why 1MDB Global Investment Limited paid US$1.279 billion to Aabar Investment PJS Limited when these entities had no business relationships

The Sarawak Report yesterday exposed another set of banking transaction documents separate from the classified Auditor-General’s Report on 1MDB which showed that 1MDB Global Investment Limited (GIL) paid a total of US$1,279,347,500 between 12 September and 4 November 2014 to the British Virgin Islands (BVI) incorporated Aabar Investment PJS Limited.

1MDB GIL is a wholly-owned foreign subsidiary of 1MDB while Aabar (BVI) has been exposed as a fraudulent entity pretending to be the subsidiary of Abu Dhabi’s International Petroleum Investment Corporation (IPIC).

The Sarawak Report rightly highlighted the failure of UBS Bank Singapore which received the money on behalf of Aabar (BVI) to properly ascertain the purpose, source and recipient of the funds.  The Monetary Authority of Singapore has already shut down another Swiss Bank, BSI Singapore in May for serious breaches of anti-money laundering requirements, poor management oversight of the bank’s operations, and gross misconduct by some of the bank’s staff.  The latest exposé hence raises the question as to whether UBS Singapore will be similarly investigated and have action taken against the Bank.

However, a bigger question mark arising from the above is why did 1MDB GIL make the US$1.279 billion payment to Aabar (BVI) in the first place?

1MDB GIL had borrowed US$3 billion in March 2013 purportedly to form a joint venture company with Abu Dhabi’s Aabar Invesmtent PJS to develop the Tun Razak Exchange in Kuala Lumpur.  However, the joint venture did not materialise.

If the joint venture is as good as dead, as testified by Arul Kanda himself to the Public Accounts Committee in January 2016, why did 1MDB GIL make the US$1.279 billion payment to Aabar (BVI) in 2014 which he did not disclose to the Committee?

Furthermore, according to 1MDB’s financial statements, 1MDB GIL was left with only US$1.56 billion invested “in various investment portfolios under the custody of a licensed financial institution”.  The rest of the funds have already been used up “for working capital and debt repayment purposes” by 31 March 2014.

Arul Kanda had also testified that the US$1.56 billion of 1MDB GIL investments were intact and will be possibly utilised as part of 1MDB’s rationalisation exercise.  However, if US$1.56 billion was indeed intact, then how did 1MDB GIL make the US$1.279 billion of cash payments to Aabar (BVI)?

The exposé of the latest documents by Sarawak Report has caught Arul Kanda with his pants down and proved that he has lied and withheld crucial information from the PAC.  This would be the real reason why Arul Kanda has refused to produce simple bank statements of 1MDB GIL to even the Auditor-General despite repeated requests to do so.

We call upon the local and international authorities to investigate all parties involved in the above transactions – Aabar Investment PJS Limited, 1MDB and UBS Bank for a international money laundering operation involving Malaysian tax-payers funds. 

Action must be taken against all parties who approved and abetted the above illicit transactions to ensure the integrity of our local and international financial system.

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The best Hari Raya present: the Auditor-General's discoveries on 1MDB which the Najib administration tried to hide via the Official Secrets Act (OSA)

It appears that The Sarawak Report has successfully procured the classified Auditor-General’s Report on 1MDB with the relevant accompanying documents.

It is a feat even I could not achieve because the Public Accounts Committee (PAC) Chairman Datuk Hasan Arifin has ruled that even PAC members could not retain a copy of the document.  This is despite the fact that we have been specifically cleared to access the Report.  I could only read the Report during the PAC meetings or upon request at the Parliamentary office.

What is important however, isn’t the feat itself, but the fact that the whole wide world can now confirm what was speculated earlier as the real reason why the AG’s Report has not been declassified and presented to the Parliament.  It is because the Auditor-General’s comments on the fishy tales and documents supplied by 1MDB is even more damning than the already damning PAC Report on the 1MDB investigations.

For example, 1MDB made payments to the British Virgin Islands (BVI) Incorporated Aabar Investment PJS Limited amounting to US$1.15 billion between May to November 2014.  These were originally explained to the Auditor-General as compensation payments for the termination of options granted to Aabar.

However, much later, after it was exposed that they have separately made another payment of US$993 million for the same purpose in November 2014, 1MDB changed their tune and claimed the US$1.15 billion was meant for a separate “top-up security” Deposit to Aabar.

1MDB even got its Board of Directors to retrospectively approve the above US$1.15 billion “top-up security” payment one year later in November 2015.

This was despite the fact that Arul Kanda, as the Chief Executive of 1MDB would have already received notification from International Petroleum Investment Corporation (IPIC) and its subsidiary, Aabar Investment PJS of Abu Dhabi in July 2015 that the BVI-incorporated Aabar is a fictitious entity unrelated to them!

In the spirit of honesty and decency during the month of AidilFitri celebrations, Dato’ Seri Najib Razak must immediately instruct the declassification of the AG’s Report, which was never meant to be permanently classified.  After all, if he has nothing to hide and insists that the Sarawak Report has once again falsified documents and doctored, in this case the AG’s Report, then making public the “real” Report will once and for all destroy Sarawak Report’s credibility.

The failure to declassify the Auditor-General’s Report however, would only prove to Malaysians and the whole wide world that we have a Prime Minister who is guilty of one of the biggest cover up in the history of the world.  It would also ultimately confirm the public perception that we are a country run by kleptocrats.

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Arul Kanda begitu berluang masa berkempen untuk Barisan Nasional di Sungai Besar, tetapi tidak berani berdebat dengan saya mengenai 1MDB

Saya  ingin  menjemput  Arul  Kanda  yang  begitu  berluang  masa  dapat  berkempen  untuk Barisan  Nasional,  tapi  tidak  berani  berdebat  dengan  saya  untuk  memberikan  penjelasan kepada  orang  ramai  di  mana-mana  satu  ceramah  yang  dianjurkan  oleh  Pakatan  Harapan malam ini atau esok.

Saya  dimaklumkan  bahawa  Arul  Kanda  telah  berucap  di  program  Wacana  Isu  Semasa Negara, bersama penjawat awam yang diadakan di Sekolah Menengah Agama Pasir Panjang.  Ini  sangat  menghairankan  saya,  dan  saya  pasti  ramai  yang  lain  juga  turut  tertanya-tanya; apa yang Arul Kanda sedang buat di Sungai Besar?

Bukankah  beliau  selalu  menegaskan  bahawa  beliau  bukan  seorang  ahli  politik  dan  tidak berniat untuk tersangkut dengan pengupasan politik Malaysia?

Saya   sangat   kecewa   kerana   Arul   Kanda   nampaknya   boleh   meluangkan   masa   untuk berkempen  bagi  pihak  Barisan  Nasional  tetapi  telah  menarik  balik persetujuan  untuk berdebat dengan saya tentang isu-isu berkait 1MDB.

Beliau  telah  sebelum  ini  memberikan  alasan  untuk  menolak  sesi  debat  tersebut  bahawa beliau   perlu   memberikan   tumpuan   khusus   untuk   membantu   penyiasatan   oleh   pihak berkuasa  di  Malaysia  dan  menyelesaikan  masalah  rumit  1MDB  dengan  syarikat  kerajaan Abu Dhabi, International Petroleum Investment Corporation (IPIC).

Adakah  penyiasatan  dan  masalah  dengan  IPIC  yang  membabitkan  jumlah  sebanyak  US$6.5 bilion sudah diselesai?

Apatah  lagi  setelah  International  Petroleum  Investment  Company  PJSC  (IPIC)  dan  Aabar Investments  PJS  (Aabar)  telah  memfailkan  kes  arbitrasi  terhadap  1MDB di  Mahkamah Arbitrasi Antarabangsa, London.

Takkanlah Arul Kanda mempunyai begitu banyak masa terluang serta mampu meninggalkan kerja-kerja  yang  lebih  penting  setelah  1MDB  disaman  dengan  tuntutan  berjumlah  US$6.5 bilion selain terlibat dalam siasatan di dalam dan luar negara?

Arul   Kanda   barangkali   CEO   paling   tidak   boleh   diharap   setelah   berulang   kali   terbukti mengabaikan  tanggungjawabnya  dan  gagal  menepati  kata-kata  bahawa  kononnya semua permasalahan 1MDB sudah pun diselesaikan. Penyelesaian kepada masalah saman arbitrasi terhadap  1MDB tidak akan membolehkan beliau  temui di Sg Besar. Kecuali Arul Kanda  dan 1MDB kini berminat dengan pelaburan sawah padi atau kapal nelayan.

Atas  kelalaian  dan  sikap  bersahaja  beliau  sehingga  boleh  membuang  masa  berkempen untuk Barisan Nasional, Arul Kanda sewajarnya dipecat oleh Lembaga Pengarah 1MDB yang baru kerana telah gagal melaksanakan tugas.

Jika Arul Kanda boleh bersenang-senang makan angin di Sekinchan, dan membantu jentera kempen  Barisan  Nasional,  saya  ingin  menjemput  beliau  untuk  memberikan  penjelas  1MDB kepada  seluruh  pengundi  Sg  Besar  di  mana-mana  ceramah  yang  dianjurkan  oleh  Pakatan Harapan malam ini atau malam esok.

Saya  percaya  orang  awam  yang  sekarang  cukup  kecewa  dan  marah  dengan  kerajaan pimpinan  Dato’  Seri  Najib  Razak  amat  mengalu-alukan  penjelasan  daripada  Arul  Kanda mengenai skandal gergasi 1MDB.

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The newly appointed 1MDB Board of Directors must carry out its duties to the Government and Malaysian tax-payers by ensuring good corporate governance and accountability

The Ministry of Finance (MOF) today announced the appointment of new board of directors for 1Malaysia Development Bhd (1MDB), succeeding the previous board, which officially resigned yesterday.

The new three-member board is chaired by Treasury Secretary-General Tan Sri Dr Mohd Irwan Serigar Abdullah, Senior Private Secretary to the Chief Secretary of the Government Datuk Norazman Ayob and Chief Operating Officer of Prokhas Sdn Bhd Datuk Kamal Mohd Ali.

We also welcome the steps taken by MOF to dissolve the 1MDB Board of Advisors, remove of the current Article 117 and change of all references from “Prime Minister” to “Minister of Finance”. Article 117 had given the Prime Minister vast powers to arbitrarily interfere in the operations of 1MDB, including the appointment of Board of Directors and top company executives as well as all major financial transactions where his “written approval” is explicitly required.

However, the amendments to 1MDB’s Memorandum and Articles of Association (M&A) as well as the changes to the Board of Directors would be an absolute waste of time if these new directors do not exercise the powers entrusted with them to ensure that the rogue management complies with all the required practices of good governance and corporate accountability.

The number one item on the agenda for the first Board of Directors meeting, which should hopefully be held soon, must be the demand for the company’s auditors, Deloitte to commence and complete the much delayed audit of 1MDB for the financial year ending 31 March 2015 and March 2016.

Without a clear and accurate picture of the financial position of the Company, the Board of Directors would be acting in a vacuum, rushing headlong into decisions without knowing the underlying status of the company.

The auditors must also be specifically directed to audit the US$7 billion (RM28 billion) of missing funds from 1MDB which the Auditor-General has been unable to verify due to the lack of cooperation from the management and the previous Board of Directors.

The sum included:

•  The sums of US$700 million and US$330 million which was misappropriated to Good Star Limited, a company which Bank Negara has identified as owned by Jho Low and is completely unrelated to the 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). Aabar (BVI) has since been found to be a fraudulent entity and dissolved since the June of last year.

•  US$940 million worth of “units” which was parked at the Swiss Bank branch of BSI Bank in Singapore. BSI Bank, Singapore has since been ordered to close but the whereabouts of US$940 million remains a mystery.

Another US$1.56 billion of investments by 1MDB’s wholly-owned foreign subsidiary, 1MDB Global Investments Limited

In fact, the Chairman of the new Board, Tan Sri Irwan Serigar must direct 1MDB President, Arul Kanda who kept his executive position, to immediately supply all documentary information and evidence pertaining to the above to be tabled for the very first Board meeting.

If Arul Kanda fails to satisfactorily explain the massive US$7 billion unaccounted funds, then the Board of Directors have now within their powers, after the removal of Article 117, to sack Arul Kanda for incompetence, cover up and collusion with the fraudsters who have resulted in billions of dollars of losses for Malaysians.

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1MDB CEO is giving up a golden opportunity to clear the firm's name when he rejects the debate challenge

I would like to express my disappointment that 1MDB CEO Arul Kanda has chosen to withdraw his acceptance of the 1MDB debate challenge after gamely declaring that I should “bring it on”.

I could gloat about his withdrawal, but I won’t.  However, what is most disappointing for the Malaysians at large is another missed opportunity by Arul Kanda to once-and-for-all debunk all 1MDB’s key doubters and critics face-to-face.  After all, the Prime Minister, the Cabinet and 1MDB repeatedly insisted that all our allegations are “without basis”, “politically-motivated” and is part of a “malicious global conspiracy”.

Arul Kanda claimed that he is now “fully focused on assisting the police, and resolving the IPIC dispute”. As such, he “cannot engage in a debate which may prejudice 1MDB’s legal position in relation to the investigation and the dispute.”

The excuse given cannot hold water because Arul Kanda first accepted my debate the first time round in October last year, with the full support given by Cabinet Members despite all forms of investigations by the Auditor-General and the Public Accounts Committee (PAC) which were also on-going.

In addition, I have personally filed a police report on 1MDB since March 2015 and the Inspector-General of Police (IGP) Tan Sri Khalid Abu Bakar has repeatedly claimed that police investigations were on-going since last year.

If it was OK to “debate” then, surely the excuse cannot apply today?

What is perhaps the real reason for the last minute withdrawal to accepting the debate since the tabling of the PAC Report last month is that all the pretence that 1MDB has undergone a successful “rationalisation exercise” has collapsed, probably irrecoverably.

More specifically, it has now been proven that 1MDB has paid US$3.51 billion, a figure provided by 1MDB themselves to the Auditor-General, to a fraudulent “Aabar Investment PJS Limited”, a company set up in the British Virgin Islands, which is completely unrelated to Abu Dhabi’s Aabar Investment PJS, the subsidiary to International Petroleum Investment Corporation (IPIC).

Even Arul Kanda admitted that “a massive fraud” might have taken place with collaborators from within 1MDB.  The Auditor-General has also stated that he is unable to confirm the whereabouts and veracity of 1MDB’s US$7 billion of cash, assets and transactions overseas.

Despite the seriousness of the misappropriation, whether intentional or otherwise, which has taken place, both the Government and 1MDB has failed to shed light on what has actually taken place.

Hence, the cancellation of the debate will not stop our mission to uncover the truth behind the heinous 1MDB scandal. Instead, the cancellation of the debate shows that we, the critics, are on the right track and gives us greater impetus dig harder to expose the real crooks who have embezzled billions of dollars of tax-payers funds.

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Is RTM not interested in hosting the debate between Arul Kanda and myself now because 1MDB has been proven to be lying to Malaysians all along?

Yesterday, I had called upon the Communications and Multimedia Minister, Dato’ Seri Salleh Keruak to once again offer RTM to broadcast the debate between Arul Kanda and myself “live”. Last October, the Minister was very quick and eager to offer the platform for the debate last October.

However, I’m extremely disappointed that the Minister has rejected the opportunity to telecast the debate live to all Malaysians throughout the country.

Dato’ Seri Salleh Keruak said that “we are not interested as investigations conducted by the Public Accounts Committee (PAC) and the Auditor-General have been concluded. If anyone is interested to debate on it, they can do so in the Parliament… What's going on now is more of a business dispute between 1MDB and the International Petroleum Investment Co (IPIC).”

The excuse provided by the Minister does not make any sense. Now that the PAC Report on 1MDB has been tabled to Parliament, it is all the more important for the findings to be debated.

This is especially since all Cabinet members claimed that the PAC Report has apparently cleared all wrongdoings by the Prime Minister and 1MDB. On the other hand, critics like myself who is part of the PAC clearly sees the report as damning, particularly with the respect that 1MDB has refused to cooperate fully with the Auditor-General.

Dato’ Seri Salleh’s claim that the massive US$3.5 billion bond defaults by 1MDB is “more of a business dispute between 1MDB and IPIC” is even more unbelievable. 1MDB has recorded the highest borrowin defaults by any government company in the history of the country, and this is a crisis of epic proportions which must be addressed by both 1MDB and the Government.

The live debate between Arul Kanda and myself will enable Malaysians to decide for themselves who is telling the truth and who is hiding from the truth. The refusal by the Communications and Multimedia Minister from hosting the show this time round is clearly a refusal to expose the truth to ordinary Malaysians.

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Malaysians are unable to confirm fraud in 1MDB precisely because Dato’ Seri Najib Razak is hampering investigations

Dato’ Seri Najib Razak claimed in his parliamentary reply as the Finance Minister to the Member of Parliament for Bagan, Lim Guan Eng, that it's still too early to conclude if fraud had occurred in the US$3.5 billion transaction between 1MDB and International Petroleum Investment Company (IPIC).

This was despite the fact that by 1MDB’s own admission to the Auditor-General, it has paid as much as US$3.51 billion to an “Aabar Investment PJS Limited” incorporated in the British Virgin Islands (BVI) between May 2012 to January 2015.  IPIC has disclosed last month that the BVI-incorporated entity is completely unrelated to itself or its similarly named subsidiary, Aabar Investment PJS, incorporated in Abu Dhabi.

It is now public knowledge that the BVI-Aabar has been wound up in mid-2015 and no one knows where the US$3.51 billion paid by 1MDB has gone to.  IPIC has publicly denied that it received any of the funds and has called a default on the debt-asset swap agreement with 1MDB signed in May 2015.

Even 1MDB President, Arul Kanda conceded that “what we cannot discount is there could actually be fraud...a massive fraud...and maybe there was collaboration from our side”.

The shocking loss of US$3.51 billion of funds would have justified the mobilisation of all investigation resources to uncover the truth behind the missing funds.  However, all we got was a nonchalant response from the Finance Minister himself that “it’s still too early to conclude if fraud has occurred”.

The problem is 1MDB hasn’t even filed a police report for an investigation to take place to uncover Arul Kanda’s concern that there “could actually be fraud… a massive fraud” and even “collaboration” from 1MDB’s officers.

And worse, even where some form of investigation was taking place by the Auditor-General (AG) and the Public Accounts Committee (PAC), 1MDB has failed to provide full cooperation.

For example, 1MDB refused, despite repeated request by the AG and the PAC over the period of nearly a year, to hand over its bank statements of its overseas accounts, and that of its overseas subsidiaries.

When I posed the question to the Finance Minister, Dato’ Seri Najib Razak only responded lamely in his Parliamentary reply that “all documents in 1MDB’s possession and/or those which were accessible and/or those which it was able to obtain has already been handed over to the National Audit Department”.

Dato’ Seri Najib Razak failed to address the question as to why 1MDB could not have the bank statements re-issued by the respective banks, if the original statements were no longer in the company’s possession.

Surely, the Finance Minister would know that missing bank statement could easily be re-printed within a few days at the most?

Hence not only did Dato’ Seri Najib Razak fail in his responsibility to ensure that the wholly-owned Ministry of Finance subsidiary comply fully with all the request by the AG and the PAC, the fact that he is now defending 1MDB with the lamest of excuses only goes to prove that the Prime Minister himself is covering up the single-largest fraud in Malaysia’s history.

By withholding crucial evidence to the investigating authorities, fraud then cannot be proven and Dato’ Seri Najib Razak can then continue to hold his head high, maintain a straight face and claim that “it is too early to conclude if fraud had occurred” in the US$3.51 billion payment to the bogus BVI-Aabar.

Malaysians cannot be blamed for asking why Dato’ Seri Najib Razak is trying to protect the criminals behind this heinous heist of the century.

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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?

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