UMNO secretary-general Tengku Adnan Tengku Mansor said that Barisan Nasional must counter the perception created by the Opposition on 1Malaysia Development Bhd (1MDB) to win back the state, said.
He claimed the 1MDB issue had been solved, and UMNO now must fix the wrong perception that the Opposition had created.
"The 1MDB issue has been solved. The bad perception was created (by the opposition) to confuse the voters. So, Umno has to step in to clear the confusion," he said after opening the Petaling Jaya Utara UMNO division meeting yesterday morning.
If only UMNO and BN’s problems in Selangor were merely as simple as “perception”. Indeed, if that was the only problem with 1MDB, it would have been extremely easy to fix.
The challenge for UMNO-BN, if Tengku Adnan hasn’t realised by now, isn’t a mere problem of perception. It is the problem that their attempts fake facts have gained no traction, especially in Selangor where the thinking electorate do not fall, hook, line and sinker for BN’s lies.
The people of Selangor, what more in Petaling Jaya Utara, can see with their own eyes not how the Prime Minister, Dato’ Seri Najib Razak and 1MDB is hiding themselves from “sensitive” questions about the RM50 billion monster scandal.
Why else would the Speaker of Parliament reject nearly all questions with regards to 1MDB even as innocuous as seeking to know the current value of 1MDB’s ‘unit’ investments previously held with the now-defunct BSI Bank in Singapore?
Why else would the Prime Minister not answer as to why is it that the Attorney-General, Tan Sri Apandi Ali claimed that the charges laid out in the United States Department of Justice (US DOJ) were “politically motivated”?
It also isn’t a question of perception when 1MDB repeatedly failed to fulfil its obligations to repay its agreed instalment to Abu Dhabi’s International Petroleum Investment Corporation (IPIC) amounting to billions of ringgit.
The people of Selangor are not so dumb as to not be able to see the fact 1MDB has suffered billions of ringgit of losses, as a result of a kleptocratic BN administration which will lead to Malaysians footing the RM42 billion 1MDB bill.
They can read between the lines when the Prime Minister failed to deny or explain the US$732 million which were deposited into his personal bank account in Ambank since the US DOJ exposed that the funds originated from 1MDB. They can also deduce intelligently when his wife, Datin Seri Rosmah Mansor, failed to explain or deny her acquisition of a US$27.3 million 22-carat pink diamond ring/necklace after the latest allegations by the DOJ.
Hence the biggest problem the BN administration faces isn’t a question of perception. The biggest 1MDB problem facing BN is the people are staring at the bare indisputable facts which the BN leaders are only trying to sweep under the carpet.
Most importantly, we are confident that the people of Selangor will support the Pakatan Harapan coalition comprising of Bersatu, Amanah, PKR and DAP and reject all other parties who fail to crusade against the single largest case of robbery and kleptocracy in the history of Malaysia.
Showing posts with label Governance. Show all posts
Showing posts with label Governance. Show all posts
Monday, August 14, 2017
Friday, May 05, 2017
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.
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.
Tuesday, May 02, 2017
Why is the PAC Chairman, Datuk Hasan Arifin as quiet as a mouse over the 1MDB-IPIC “settlement” where the Finance Ministry agreed to assume US$3.5 bil. of 1MDB liabilities from IPIC?
Malaysians are still up in arms over the 1MDB-IPIC “settlement” which was announced less than two weeks ago where the Ministry of Finance has agreed to assume US$3.5 billion of 1MDB bond liabilities which were previously bourne by the International Petroleum Investment Corporation (IPIC) of Abu Dhabi.
The Malaysian Government had agreed to do so despite the fact that both 1MDB and the Cabinet Ministers had in the past insisted that 1MDB had already paid to IPIC’s subsidiary, British Virgin Island-registered Aabar Investment PJS Limited (“Aabar(BVI)”) a total of RM3.51 billion between 2012 and 2014.
The Second Finance Minister, Dato’ Seri Johari Abdul Ghani had previously said he was “very confident” of 1MDB winning the arbitration fight against IPIC. Despite the bravado displayed, it was 1MDB which capitulated before the arbitration proceedings commenced in full, with the Malaysian parties conceding pretty much to all substantive demands from IPIC.
However, the Second Finance Minister denied any responsibility for the outrageous settlement terms. Instead, he shifted the blame to Dato’ Seri Najib Razak by pointing out that “the Prime Minister has made the decision for the country. That’s it,” and that the matter is now “beyond [him]”.
Dato’ Seri Johari Abdul Ghani even defended himself by revealing that there was a letter from the BVI Registrar of Companies clearly stating that Aabar(BVI) was indeed a subsidiary of IPIC.
While the existence of such a presumably legitimate letter still does not in itself prove that Aabar(BVI) isn’t a fraudulent set up, it does highlight the fact that the Government’s decision defies all logic. After all, why would the Government then under all rational circumstances, concede to the demands of IPIC if there was nothing incriminating on the part of 1MDB? As the Malay proverb goes, there must be “udang di sebalik batu”.
This was the reason for my call for the newly-appointed Auditor-General and the Public Accounts Committee (PAC) to re-look into the 1MDB scandal in the light of the latest developments.
I certainly wasn’t the only one asking for a review. Even Barisan Nasional Members of Parliament in the PAC, Marcus Mojigoh of Putatan who asked for the above letter to be presented and Aziz Sheikh Fadzir of Kulim Bandar Baru who asked where the payments to Aabar(BVI) went, are keen to obtain answers.
However, instead of responding to requests by multiple parties to re-open the inquiry, the Public Accounts Committee Chairman, Datuk Hasan Arifin has remained as quite as a mouse. In fact, not only has he not released any statement on an issue of such import, involving more than RM15 billion of tax-payers’ funds, he has been avoiding media enquiries like plague!
I have been informed that he has refused to pick up phone calls, text message or emails from journalists with regards to the above.
Datuk Hasan Arifin’s lack of action is certainly consistent with his track record of covering up for the Najib administration – when he refused to summon the Prime Minister to the PAC as a witness, saying that he has to “cari makan”, and when he secretly and unilaterally amended the finalised PAC Report which was tabled in Parliament.
However, the fact that the loss of US$3.51 billion is staring at Malaysian faces today deserves at the very least, an acknowledgement from the Chairman of the PAC, the very institution conceived to check and scrutinise Government-related expenditures.
If Datuk Hasan Arifin cannot bring himself to, or can’t be bothered to perform his parliamentary and constitutionally entrusted role, he should have the moral decency to resign from his position. He should give way to someone who is at least somewhat serious about integrity, accountability and being answerable to Malaysians.
The Malaysian Government had agreed to do so despite the fact that both 1MDB and the Cabinet Ministers had in the past insisted that 1MDB had already paid to IPIC’s subsidiary, British Virgin Island-registered Aabar Investment PJS Limited (“Aabar(BVI)”) a total of RM3.51 billion between 2012 and 2014.
The Second Finance Minister, Dato’ Seri Johari Abdul Ghani had previously said he was “very confident” of 1MDB winning the arbitration fight against IPIC. Despite the bravado displayed, it was 1MDB which capitulated before the arbitration proceedings commenced in full, with the Malaysian parties conceding pretty much to all substantive demands from IPIC.
However, the Second Finance Minister denied any responsibility for the outrageous settlement terms. Instead, he shifted the blame to Dato’ Seri Najib Razak by pointing out that “the Prime Minister has made the decision for the country. That’s it,” and that the matter is now “beyond [him]”.
Dato’ Seri Johari Abdul Ghani even defended himself by revealing that there was a letter from the BVI Registrar of Companies clearly stating that Aabar(BVI) was indeed a subsidiary of IPIC.
While the existence of such a presumably legitimate letter still does not in itself prove that Aabar(BVI) isn’t a fraudulent set up, it does highlight the fact that the Government’s decision defies all logic. After all, why would the Government then under all rational circumstances, concede to the demands of IPIC if there was nothing incriminating on the part of 1MDB? As the Malay proverb goes, there must be “udang di sebalik batu”.
This was the reason for my call for the newly-appointed Auditor-General and the Public Accounts Committee (PAC) to re-look into the 1MDB scandal in the light of the latest developments.
I certainly wasn’t the only one asking for a review. Even Barisan Nasional Members of Parliament in the PAC, Marcus Mojigoh of Putatan who asked for the above letter to be presented and Aziz Sheikh Fadzir of Kulim Bandar Baru who asked where the payments to Aabar(BVI) went, are keen to obtain answers.
However, instead of responding to requests by multiple parties to re-open the inquiry, the Public Accounts Committee Chairman, Datuk Hasan Arifin has remained as quite as a mouse. In fact, not only has he not released any statement on an issue of such import, involving more than RM15 billion of tax-payers’ funds, he has been avoiding media enquiries like plague!
I have been informed that he has refused to pick up phone calls, text message or emails from journalists with regards to the above.
Datuk Hasan Arifin’s lack of action is certainly consistent with his track record of covering up for the Najib administration – when he refused to summon the Prime Minister to the PAC as a witness, saying that he has to “cari makan”, and when he secretly and unilaterally amended the finalised PAC Report which was tabled in Parliament.
However, the fact that the loss of US$3.51 billion is staring at Malaysian faces today deserves at the very least, an acknowledgement from the Chairman of the PAC, the very institution conceived to check and scrutinise Government-related expenditures.
If Datuk Hasan Arifin cannot bring himself to, or can’t be bothered to perform his parliamentary and constitutionally entrusted role, he should have the moral decency to resign from his position. He should give way to someone who is at least somewhat serious about integrity, accountability and being answerable to Malaysians.
Thursday, March 16, 2017
Don't “thank” the Domestic Trade Minister for raising sugar prices by “only 11 sen” - facts proved that the BN Government has allowed Malaysia’s sugar duopoly to make super-profits over the past 2 years
Two days ago, Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hamzah Zainuddin said Malaysians should be thankful for the minimal hike in sugar price. He said the hike, at only 3.8%, was minor compared with what was proposed.
This followed the ministry’s recent announcement that the new price of coarse granulated white sugar from March 1 onwards was RM2.95 per kg, up from the previous RM2.84.
“In fact, when we did the calculation, the millers had been asking us to increase the price to RM3.20, which is a jump of 40 sen. But from our calculation, we took the average and set it at the minimum of 11 sen,” he told reporters at the Dewan Rakyat.
“Malaysians should thank me instead of being angry with me,” Hamzah said.
An arrogant statement like that by the Minister is an open invitation for a fact-check. In keeping with the current fad of “fact-checks” as epitomised by Malaysia Communications and Multimedia Commission’s (MCMC) “Sebenarnya” portal, I dug up the historical prices of global raw sugar prices, Malaysia government’s “Long-Term Contracts” (LTC) for raw sugar supply, our historical subsidies for processed white sugar and the Manufacturer’s white sugar price (before subsidy). (Please refer to table attached.)
Prior to 2015, Malaysia’s two sole sugar manufacturers purchased raw sugar via Malaysia government’s LTC for imported raw sugar supply. For 2009-2011, the fixed raw sugar price was US$17.50 per 100lbs, while for 2012-2014, the price per 100lbs was US$26.00.
The LTC raw sugar purchasing system was subsequently abolished and manufacturers purchased import their raw sugar supply directly based on global market raw sugar prices.
I have also calculated the Manufacturer’s white sugar price, which is the sum of retail white sugar price plus any subsidy paid by the Government. This will be the price that the two manufacturers receive per kilogram of sugar sold.
Very simply, I put the manufacturer’s raw sugar purchasing price and the processed sugar selling price historical trends from 2010 to date together in a single chart as shown in Chart A below.
The Chart itself speaks a thousand words.
Between January 2012 to December 2014, the manufacturer’s raw sugar supply price was US$26 per 100lbs. They could sell processed sugar at RM2.84/kg and had no problems making a profit.
The question that needs to be asked is, today, the global market raw sugar price is approximately US$18.16 per 100lbs, why is it that the BN government see it fit to further increase the retail sugar price to RM2.95/kg?
Even after accounting for the differences in exchange rate over the period of time, the price of sugar should have been reduced, and not increased!
Chart A:
Worse, if you look at the raw sugar supply price in 2015, it dipped for the manufacturers immediately from US$26 in December 2014 to US$15.06 in January 2015, and further to a low of only US$10.67 in August 2015, why did the Government allow the manufacturers to continue making astronomical profits at RM2.84/kg?
Why hadn’t the Government reduced the price of sugar drastically in 2015 when the raw sugar supply price hit rock bottom? As a comparison, even when the manufacturers bought raw sugar for US$17.50 prior between 2009 and 2011, the manufacturer’s sugar price was only between RM2.05 and RM2.50.
The data proved beyond doubt that there is absolutely no need for Malaysians to “thank” the Domestic Trade Minister as demanded by Dato’ Seri Hamzah Zainuddin. Instead, Malaysians should perhaps be cursing and swearing at the Minister and the BN Government for stupidly (or perhaps intentionally) allowing the two Malaysian sugar manufacturers for profiteering via a Government-imposed selling price at the expense of ordinary suffering Malaysians.
We call upon the Government to not only withdraw the recent price hike of 11 sen for the retail price of sugar, but instead further lower the ceiling price from RM2.84/kg to reflect the substantially lower global price of raw sugar over the past 2 years. This should be done immediately without any compensation or subsidies paid to the manufacturers.
This followed the ministry’s recent announcement that the new price of coarse granulated white sugar from March 1 onwards was RM2.95 per kg, up from the previous RM2.84.
“In fact, when we did the calculation, the millers had been asking us to increase the price to RM3.20, which is a jump of 40 sen. But from our calculation, we took the average and set it at the minimum of 11 sen,” he told reporters at the Dewan Rakyat.
“Malaysians should thank me instead of being angry with me,” Hamzah said.
An arrogant statement like that by the Minister is an open invitation for a fact-check. In keeping with the current fad of “fact-checks” as epitomised by Malaysia Communications and Multimedia Commission’s (MCMC) “Sebenarnya” portal, I dug up the historical prices of global raw sugar prices, Malaysia government’s “Long-Term Contracts” (LTC) for raw sugar supply, our historical subsidies for processed white sugar and the Manufacturer’s white sugar price (before subsidy). (Please refer to table attached.)
Prior to 2015, Malaysia’s two sole sugar manufacturers purchased raw sugar via Malaysia government’s LTC for imported raw sugar supply. For 2009-2011, the fixed raw sugar price was US$17.50 per 100lbs, while for 2012-2014, the price per 100lbs was US$26.00.
The LTC raw sugar purchasing system was subsequently abolished and manufacturers purchased import their raw sugar supply directly based on global market raw sugar prices.
I have also calculated the Manufacturer’s white sugar price, which is the sum of retail white sugar price plus any subsidy paid by the Government. This will be the price that the two manufacturers receive per kilogram of sugar sold.
Very simply, I put the manufacturer’s raw sugar purchasing price and the processed sugar selling price historical trends from 2010 to date together in a single chart as shown in Chart A below.
The Chart itself speaks a thousand words.
Between January 2012 to December 2014, the manufacturer’s raw sugar supply price was US$26 per 100lbs. They could sell processed sugar at RM2.84/kg and had no problems making a profit.
The question that needs to be asked is, today, the global market raw sugar price is approximately US$18.16 per 100lbs, why is it that the BN government see it fit to further increase the retail sugar price to RM2.95/kg?
Even after accounting for the differences in exchange rate over the period of time, the price of sugar should have been reduced, and not increased!
Chart A:
Worse, if you look at the raw sugar supply price in 2015, it dipped for the manufacturers immediately from US$26 in December 2014 to US$15.06 in January 2015, and further to a low of only US$10.67 in August 2015, why did the Government allow the manufacturers to continue making astronomical profits at RM2.84/kg?
Why hadn’t the Government reduced the price of sugar drastically in 2015 when the raw sugar supply price hit rock bottom? As a comparison, even when the manufacturers bought raw sugar for US$17.50 prior between 2009 and 2011, the manufacturer’s sugar price was only between RM2.05 and RM2.50.
The data proved beyond doubt that there is absolutely no need for Malaysians to “thank” the Domestic Trade Minister as demanded by Dato’ Seri Hamzah Zainuddin. Instead, Malaysians should perhaps be cursing and swearing at the Minister and the BN Government for stupidly (or perhaps intentionally) allowing the two Malaysian sugar manufacturers for profiteering via a Government-imposed selling price at the expense of ordinary suffering Malaysians.
We call upon the Government to not only withdraw the recent price hike of 11 sen for the retail price of sugar, but instead further lower the ceiling price from RM2.84/kg to reflect the substantially lower global price of raw sugar over the past 2 years. This should be done immediately without any compensation or subsidies paid to the manufacturers.
Saturday, February 11, 2017
Instead of making the Ministry of Communications and Multimedia the bastion of truth and integrity, Datuk Seri Salleh Keruak has made it the Ministry of Fake News and Miscommunications
There cannot be greater irony when the Minister of Communications and Multimedia, Datuk Seri Salleh Keruak warned in his blog exactly a month ago against posting “fake news”:
However, the Minister seems to have picked up a different lesson from the above analysis that he cited. It appears that the prevalence and popularity of “fake news” which helped President Trump with the American elections is the exact approach he would take to help Dato’ Seri Najib Razak defend his kleptocratic administration.
Two days ago, I have countered Datuk Seri Salleh’s attempt to shrivel 1MDB’s scandal into a peanut-sized RM1 million. The Minister even presented the alternative fact that 1MDB was in possession of RM51 billion in assets and hence is a healthy “going concern”.
I’ve detailed the Auditor-General’s findings that the Federal Government has guaranteed, directly and indirectly, RM39.8 billion of 1MDB’s monster debts of which the Ministry of Finance wholly-owned subsidiary has no ability to repay.
I’ve also cited the fact that even 1MDB’s auditors, Deloitte have renounced the 1MDB March 2013 financial statements which provided the RM51 billion asset figure. This was after various international agencies, including the US Department of Justice (DOJ) provided documents demonstrating that at least US$5.6 billion have been stolen and laundered from 1MDB via fraudulent transfers and fake companies.
Despite the Minister’s normally quick responses, Datuk Seri Salleh Keruak has failed to respond to the cited facts, much less provided any shred of evidence to counter the allegations.
Instead, the above only proved that the Minister has corrupted his position to become the official Ministry of Fake News and Miscommunications, consistent with many of his earlier statements defending the indefensible Prime Minister and 1MDB.
The award of the fakest news of all perpetrated by Datuk Seri Salleh Keruak has to be his continued insistence, even after the mountain of evidence presented by the US DOJ on US$731 million finding its way into Dato’ Seri Najib Razak’s personal bank account in Ambank, that “after comprehensive investigations by many authorities, it has been confirmed that the funds were a donation from the Royal Family of Saudi Arabia”.
The problem is, Datuk Seri Salleh Keruak is learning from the best, Nazi Hitler who wrote, “Make the lie big, make it simple, keep saying it, and eventually they will believe it.” The Minister presented not an iota of proof to continue asserting that the siphoned funds actually originated from “the Royal Family of Saudi Arabia”.
It is the sacred task and duty of all right-thinking Malaysians to stand up for the truth and defeat the ‘big lies’ of the Najib administration to protect our country from crooked dictators, and ensure that our children do not pay for our indifference.
I’ve said this before and I will say it again – verify before you vilify your source of news information. It is very unfortunate to know that many people still cling on to mistaken beliefs and theories that could even be decades old!
Fabricated news stories and irresponsible online news sources spread misinformation in order to mislead and/or make money when others click on the site or article. This makes fake news much more insidious than real news.
According to an analysis by BuzzFeed, a leading independent digital media company, hoaxes about the US politics were among the top-performing fake news content on Facebook in 2016. BuzzFeed News Media Editor, Craig Silverman said that twenty-three of the 50 top-performing fake news hoaxes found on Facebook, were focused on US politics.
However, the Minister seems to have picked up a different lesson from the above analysis that he cited. It appears that the prevalence and popularity of “fake news” which helped President Trump with the American elections is the exact approach he would take to help Dato’ Seri Najib Razak defend his kleptocratic administration.
Two days ago, I have countered Datuk Seri Salleh’s attempt to shrivel 1MDB’s scandal into a peanut-sized RM1 million. The Minister even presented the alternative fact that 1MDB was in possession of RM51 billion in assets and hence is a healthy “going concern”.
I’ve detailed the Auditor-General’s findings that the Federal Government has guaranteed, directly and indirectly, RM39.8 billion of 1MDB’s monster debts of which the Ministry of Finance wholly-owned subsidiary has no ability to repay.
I’ve also cited the fact that even 1MDB’s auditors, Deloitte have renounced the 1MDB March 2013 financial statements which provided the RM51 billion asset figure. This was after various international agencies, including the US Department of Justice (DOJ) provided documents demonstrating that at least US$5.6 billion have been stolen and laundered from 1MDB via fraudulent transfers and fake companies.
Despite the Minister’s normally quick responses, Datuk Seri Salleh Keruak has failed to respond to the cited facts, much less provided any shred of evidence to counter the allegations.
Instead, the above only proved that the Minister has corrupted his position to become the official Ministry of Fake News and Miscommunications, consistent with many of his earlier statements defending the indefensible Prime Minister and 1MDB.
The award of the fakest news of all perpetrated by Datuk Seri Salleh Keruak has to be his continued insistence, even after the mountain of evidence presented by the US DOJ on US$731 million finding its way into Dato’ Seri Najib Razak’s personal bank account in Ambank, that “after comprehensive investigations by many authorities, it has been confirmed that the funds were a donation from the Royal Family of Saudi Arabia”.
The problem is, Datuk Seri Salleh Keruak is learning from the best, Nazi Hitler who wrote, “Make the lie big, make it simple, keep saying it, and eventually they will believe it.” The Minister presented not an iota of proof to continue asserting that the siphoned funds actually originated from “the Royal Family of Saudi Arabia”.
It is the sacred task and duty of all right-thinking Malaysians to stand up for the truth and defeat the ‘big lies’ of the Najib administration to protect our country from crooked dictators, and ensure that our children do not pay for our indifference.
Sunday, January 08, 2017
Be it “Parker Randall” or “Afrizan Tarmili Khairul Azhar”, will new 1MDB auditors act as “independent auditors” in an objective, professional and timely manner?
Scandal-ridden 1MDB has finally appointed new auditors to replace Deloitte Malaysia who resigned since the middle of last year. Deloitte is the 3rd audit firm which have resigned in 6 years, following Ernst & Young and KPMG. The new 1MDB chairman, who is also the Treasurer-General, announced that “Parker Randall” appointed to the task two days ago.
A little storm was created as “Parker Randall” in Malaysia is essentially Malaysian audit firm, “Afrizan Tarmili Khairul Azhar” (aftaas) with 4 partners, based in Sri Rampai, Kuala Lumpur.
As the corporate profile downloaded from the firm’s website stated, aftaas is “a member of Parker Randall International” which is an “international association of independent audit and accounting firms”.
As highlighted by Malaysiakini, each member firm of Parker Randall in each country is a separate and independent legal entity. Malaysiakini also pointed out that the 2011 ranking on the largest law and accounting firm networks ranked Parker Randall at 56 among 60. Parker Randall also did not make the list for accountancy publication Accountancy Age's 'Top 100' survey for 2016.
However, what is ultimately most important for Malaysians isn’t the question of whether it is Parker Randall or Afrizan Tarmili Khairul Azhar carrying out the 1MDB audit. What is of utmost importance is whether the newly appointed firm will carry out their responsibilities as “independent auditors”, and I emphasize “independent”, in an objective, professional and timely manner.
For a start, this is the perfect opportunity for aftaas to prove that they can do a better job than global giants, KPMG and Deloitte who have failed miserably in their audit of 1MDB by signing off financial statements which were at best misleading, at worst completely fraudulent.
Both KPMG and Deloitte failed to detect even a single dollar of misappropriation from 1MDB in the five financial years ending March 2010 to 2014. We have since discovered, with confirmation from both Bank Negara Malaysia, the Switzerland Attorney-General as well as the Department of Justice of the United States that at least US$5 billion has been siphoned from 1MDB into private off-shore firms owned by Low Taek Jho, fraudulent entities masquerading as legitimate Abu Dhabi companies as well as dodgy investment funds which acted as money laundering conduits.
The Parliamentary Public Accounts Committee has also similarly provided evidence of the complicity of the 1MDB top management who signed dubious agreements and provided false information to the Board of Directors as well as the regulating agencies.
The previous auditors were so badly and disgracefully duped that Deloitte found it necessary to announce the withdrawal of their recognition of 1MDB’s March 2013 and 2014 audited accounts which they had previously signed off without any qualification. Deloitte said that the above accounts “should no longer be relied upon”.
Hence, regardless of what the 1MDB directors and management might think, it is important for Parker Randall and/or aftaas to carry out a thorough audit of all the questionable transactions of the past where billions of dollars have been misappropriated.
Therefore, the first task by aftaas is simply to review and restate 1MDB’s 2013 and 2014 financial statements which have been withdrawn by Deloitte. The Companies Act requires the annual submission of financial statements endorsed by an appointed external auditor to the Registrar of Companies. It is the statutory requirement for the independent auditor to carry out the above task and Directors who fail to ensure that the above are duly completed in a timely matter may be punishable by up to 5 years’ jail or thirty thousand ringgit.
Following that, with the “right” opening balance determined, then aftaas can proceed to conduct the audit for March 2015 and 2016 which are both already overdue.
If aftaas fails to perform the above review and audit, they can be assured that not only their market reputation will be left in tatters in Malaysia, their international affiliation, Parker Randall – whose credibility 1MDB is banking on – will be similarly disgraced internationally and dragged through the mud.
Friday, November 04, 2016
Ministerial replies in Parliament over the multi-billion dollar 1MDB scandal, when there were replies, has made a mockery of our august institution
When travelling overseas, Malaysians are now inundated with questions as to how Dato’ Seri Najib Razak remains firmly in power as the Prime Minister of Malaysia despite a few billion ringgit of funds which were misappropriated from a state owned investment firm finding its way into his personal account.
Foreigners are bewildered as to how our so-called democratic system could tolerate such unprecedented excesses.
The reason is simple. Our parliamentary institution is a mere facade whose sole existence is to lend legitimacy to those who wield the ultimate power. It is a pesky inconvenience which Dato’ Seri Najib Razak needs to tolerate to continue to present a semblance of a modern progressive nation.
When asked of the Prime Minister’s near total absence from Parliamentary sittings, the Honourable Speaker defended Dato’ Seri Najib Razak, claiming that the Prime Minister would have more important things to do than “to sit here and see the same face and then they (MPs) ask irrelevant questions”.
If even the Speaker of the House treats the elected Members of Parliaments with such contempt, little could be expected of the Ministers and Deputy Ministers who are left to respond to the obviously “irrelevant questions” from MPs.
Questions were asked about the actions taken by the Malaysian Anti-Corruption Commission pursuant the charges laid out by the United States Department of Justice (DOJ) to seize more than US$1 billion of assets laundered by Low Taek Jho and the Prime Minister’s stepson, Riza Aziz with funds misappropriated from 1MDB.
Deputy Minister in the Prime Minister’s Department, Datuk Razali Ibrahim responded that there is no need for the Malaysian Anti-Corruption Commission (MACC) to question Riza Aziz, the stepson of Prime Minister Najib Abdul Razak, as he is not being probed for graft..
"For the MACC, Riza is not under a corruption probe so there is no need for the MACC to summon him (for questioning)", he said.
And when MP for Bayan Baru, Sim Tze Tzin asked about DOJ’s allegations that Riza had bought luxury properties overseas with 1MDB funds, Razali audaciously replied, "what's wrong if people with lots of money buy things?"
Obviously the point that these funds were stolen from funds managed by the Government did not matter to the Minister.
Separately the MP for Puchong, Gobind Singh asked about the need to re-open MACC’s investigations into the billions of ringgit found in the Prime Minister’s personal bank account in the light of the DOJ filings. Datuk Razali Ibrahim astonishingly responded that the concluded MACC probe on Dato’ Seri Najib Abdul Razak's RM2.6 billion ‘donation’ did not look into the origins of the money.
"We (the MACC) were only looking into corruption, not where the money came from,” he said.
"We can't make assumptions about 1MDB, because of things in the US and Switzerland… They may be looking at the money trail, we only look at the question of corruption," he added while wrapping up his part of the Budget 2017 debate speech, focusing on the MACC and Felda.
The answer is as bizarre as it is dumbfounding. How can you rule out corruption if you fail to investigate the money trail? In fact, the admission by the Minister that MACC did not bother investigating the money trail to trace the origins of the funds which ended up in the Prime Minister’s accounts only goes to justify the call for MACC to re-open investigations because they have failed to perform their duties thoroughly and competently.
However, the fact that the Ministers can get away with such nonchalant and nonsensical replies in the highest legislative body of the land epitomises the collapse of Malaysia’s democratic institutions.
With a cabinet full of Ministers that know no shame, it explains why despite the severity and credibility of the corruption and embezzlement allegations against the Prime Minister, Dato’ Seri Najib Razak remains firmly in grip of power.
The only way to remove Dato’ Seri Najib Razak and the ruling Barisan Nasional, is via the ballot box, even if Malaysians have to overcome the unfair electoral system.
Foreigners are bewildered as to how our so-called democratic system could tolerate such unprecedented excesses.
The reason is simple. Our parliamentary institution is a mere facade whose sole existence is to lend legitimacy to those who wield the ultimate power. It is a pesky inconvenience which Dato’ Seri Najib Razak needs to tolerate to continue to present a semblance of a modern progressive nation.
When asked of the Prime Minister’s near total absence from Parliamentary sittings, the Honourable Speaker defended Dato’ Seri Najib Razak, claiming that the Prime Minister would have more important things to do than “to sit here and see the same face and then they (MPs) ask irrelevant questions”.
If even the Speaker of the House treats the elected Members of Parliaments with such contempt, little could be expected of the Ministers and Deputy Ministers who are left to respond to the obviously “irrelevant questions” from MPs.
Questions were asked about the actions taken by the Malaysian Anti-Corruption Commission pursuant the charges laid out by the United States Department of Justice (DOJ) to seize more than US$1 billion of assets laundered by Low Taek Jho and the Prime Minister’s stepson, Riza Aziz with funds misappropriated from 1MDB.
Deputy Minister in the Prime Minister’s Department, Datuk Razali Ibrahim responded that there is no need for the Malaysian Anti-Corruption Commission (MACC) to question Riza Aziz, the stepson of Prime Minister Najib Abdul Razak, as he is not being probed for graft..
"For the MACC, Riza is not under a corruption probe so there is no need for the MACC to summon him (for questioning)", he said.
And when MP for Bayan Baru, Sim Tze Tzin asked about DOJ’s allegations that Riza had bought luxury properties overseas with 1MDB funds, Razali audaciously replied, "what's wrong if people with lots of money buy things?"
Obviously the point that these funds were stolen from funds managed by the Government did not matter to the Minister.
Separately the MP for Puchong, Gobind Singh asked about the need to re-open MACC’s investigations into the billions of ringgit found in the Prime Minister’s personal bank account in the light of the DOJ filings. Datuk Razali Ibrahim astonishingly responded that the concluded MACC probe on Dato’ Seri Najib Abdul Razak's RM2.6 billion ‘donation’ did not look into the origins of the money.
"We (the MACC) were only looking into corruption, not where the money came from,” he said.
"We can't make assumptions about 1MDB, because of things in the US and Switzerland… They may be looking at the money trail, we only look at the question of corruption," he added while wrapping up his part of the Budget 2017 debate speech, focusing on the MACC and Felda.
The answer is as bizarre as it is dumbfounding. How can you rule out corruption if you fail to investigate the money trail? In fact, the admission by the Minister that MACC did not bother investigating the money trail to trace the origins of the funds which ended up in the Prime Minister’s accounts only goes to justify the call for MACC to re-open investigations because they have failed to perform their duties thoroughly and competently.
However, the fact that the Ministers can get away with such nonchalant and nonsensical replies in the highest legislative body of the land epitomises the collapse of Malaysia’s democratic institutions.
With a cabinet full of Ministers that know no shame, it explains why despite the severity and credibility of the corruption and embezzlement allegations against the Prime Minister, Dato’ Seri Najib Razak remains firmly in grip of power.
The only way to remove Dato’ Seri Najib Razak and the ruling Barisan Nasional, is via the ballot box, even if Malaysians have to overcome the unfair electoral system.
Saturday, October 29, 2016
Treasury-General not telling the whole truth when dismissing Non-Financial Public Corporations as a time-bomb for Budget 2017
After the Prime Minister Dato’ Seri Najib Razak announced the Budget for 2017, I had issued a statement warning of a time-bomb hidden in the depths of the Economic Report, often unnoticed in budget presentations.
In 2013, the budget deficit was 3.8%. The figure declined to 3.4% and 3.2% in 2014 and 2015. For this year, the Government estimates it to be 3.1% and is forecasting 3.0% for 2017.
However, what is the above relatively benign figures mask is the increasing shift of expenditure from the official Federal Government budget to state-owned corporations. Hence in reality, Government spending is higher than ever, increasing the risk to the economy with larger borrowings and contingent liabilities.
Some of these hidden off-budget spending are exposed in the obscure Non-Financial Public Corporations (NFPC) Financial Position (Table 6.13 p161 Economic Report 2016/7 – see below).
NFPCs includes 29 key government-linked companies including Indah Water Konsortium, KTM Bhd, Telekom Malaysia, Malaysia Airlines Bhd, Malaysia Airport Holdings, Petronas, Prasarana, Syarikat Perumahan Negara, Tenaga Nasional, MRT Co and the UEM Group.
The table clearly showed that the the NFPC deficit which was a modest RM10.6 billion deficit in 2013 leaped astronomically to RM52.3 billion in 2014 and further increased to RM56.9 billion in 2015. The estimated deficit for 2016 is currently RM50.5 billion.
Effectively, Government-owned enterprises are having much larger deficits than the Federal Government itself. The Federal Government budget deficits for 2015 was RM37.2 billion. In 2016, it is estimated to hit RM38.7 billion while the Government forecast RM40.3 billion for 2017.
When this matter was raised to the Treasury-General Tan Sri Irwan Serigar on Monday, he dismissed my warning that the NFPC deficit is a ticking time-bomb waiting to explode.
He said “NFPCs are Government-Linked Companies which huge investments, and they have borrowings… Everybody needs to invest”.
He further added that “It is a contingent liability, but its not a time bomb kind of thing as they can repay their loans. They are big entities with large resources.
“For example, Tenaga Nasional and Telekom Bhd, they are making profits. If they have borrowings for their projects, are you going to say it’s a time-bomb?” Tan Sri Irwan asked rhetorically.
The Treasury-General is being extremely disingenuous by citing only the big public listed companies as examples. Out of the list of 29 companies, there are also other companies which are generally well-managed and would have no problems servicing their financial obligations, such as Axiata and Petronas.
However, there are many other entities among the 29 which are nothing other than vehicles for Government expenditure which more likely than not, will never generate sufficient income to service their loan obligations.
Why didn’t Tan Sri Irwan Serigar point out the fact that Prasarana’s RM13 billion of debt and mounting expenses have only increased and requires annual Government grants to keep the company afloat?
Why didn’t he point out that MRT Co is undertaking a RM22 billion investment for the current Sg Buloh – Kajang line and is planning another RM26 billion MRT II line which is financed almost entirely debt which are never likely to be repaid without future Government support?
Or the fact that among the 29 companies lie many critically ill GLCs which had required or will require government bailout, such as Keretapi Tanah Melayu (KTMB), Malaysia Airlines, Penerbangan Malaysia, Silterra Malaysia and Syarikat Perumahan Negara?
Worse, the list of 29 NFPCs isn’t even conclusive. They leave out a number of other key Government-owned enterprises which heavily commit the federal government to meeting their obligations for many years to come. This list will include PFI Sdn Bhd which took a RM30 billion loan from EPF to carry out general public infrastructure works, Pembinaan BLT with a RM10 billion debt to build police stations nationwise, and of course more recently controversial companies such as 1MDB and SRC International.
I call upon the Secretary-General to be stop creative accounting with the country’s national budget in order to manipulate the perception towards the Government’s financial position. Such actions will only bring short term benefits but bring long-term pain, reminiscent of the Greek-type government spending which ultimately brought collapse to the country.
In 2013, the budget deficit was 3.8%. The figure declined to 3.4% and 3.2% in 2014 and 2015. For this year, the Government estimates it to be 3.1% and is forecasting 3.0% for 2017.
However, what is the above relatively benign figures mask is the increasing shift of expenditure from the official Federal Government budget to state-owned corporations. Hence in reality, Government spending is higher than ever, increasing the risk to the economy with larger borrowings and contingent liabilities.
Some of these hidden off-budget spending are exposed in the obscure Non-Financial Public Corporations (NFPC) Financial Position (Table 6.13 p161 Economic Report 2016/7 – see below).
NFPCs includes 29 key government-linked companies including Indah Water Konsortium, KTM Bhd, Telekom Malaysia, Malaysia Airlines Bhd, Malaysia Airport Holdings, Petronas, Prasarana, Syarikat Perumahan Negara, Tenaga Nasional, MRT Co and the UEM Group.
The table clearly showed that the the NFPC deficit which was a modest RM10.6 billion deficit in 2013 leaped astronomically to RM52.3 billion in 2014 and further increased to RM56.9 billion in 2015. The estimated deficit for 2016 is currently RM50.5 billion.
Effectively, Government-owned enterprises are having much larger deficits than the Federal Government itself. The Federal Government budget deficits for 2015 was RM37.2 billion. In 2016, it is estimated to hit RM38.7 billion while the Government forecast RM40.3 billion for 2017.
When this matter was raised to the Treasury-General Tan Sri Irwan Serigar on Monday, he dismissed my warning that the NFPC deficit is a ticking time-bomb waiting to explode.
He said “NFPCs are Government-Linked Companies which huge investments, and they have borrowings… Everybody needs to invest”.
He further added that “It is a contingent liability, but its not a time bomb kind of thing as they can repay their loans. They are big entities with large resources.
“For example, Tenaga Nasional and Telekom Bhd, they are making profits. If they have borrowings for their projects, are you going to say it’s a time-bomb?” Tan Sri Irwan asked rhetorically.
The Treasury-General is being extremely disingenuous by citing only the big public listed companies as examples. Out of the list of 29 companies, there are also other companies which are generally well-managed and would have no problems servicing their financial obligations, such as Axiata and Petronas.
However, there are many other entities among the 29 which are nothing other than vehicles for Government expenditure which more likely than not, will never generate sufficient income to service their loan obligations.
Why didn’t Tan Sri Irwan Serigar point out the fact that Prasarana’s RM13 billion of debt and mounting expenses have only increased and requires annual Government grants to keep the company afloat?
Why didn’t he point out that MRT Co is undertaking a RM22 billion investment for the current Sg Buloh – Kajang line and is planning another RM26 billion MRT II line which is financed almost entirely debt which are never likely to be repaid without future Government support?
Or the fact that among the 29 companies lie many critically ill GLCs which had required or will require government bailout, such as Keretapi Tanah Melayu (KTMB), Malaysia Airlines, Penerbangan Malaysia, Silterra Malaysia and Syarikat Perumahan Negara?
Worse, the list of 29 NFPCs isn’t even conclusive. They leave out a number of other key Government-owned enterprises which heavily commit the federal government to meeting their obligations for many years to come. This list will include PFI Sdn Bhd which took a RM30 billion loan from EPF to carry out general public infrastructure works, Pembinaan BLT with a RM10 billion debt to build police stations nationwise, and of course more recently controversial companies such as 1MDB and SRC International.
I call upon the Secretary-General to be stop creative accounting with the country’s national budget in order to manipulate the perception towards the Government’s financial position. Such actions will only bring short term benefits but bring long-term pain, reminiscent of the Greek-type government spending which ultimately brought collapse to the country.
Sunday, October 23, 2016
The Economic Report 2016/7 exposes Dato’ Seri Najib Razak’s hidden budget time-bomb
Since the last general elections, Dato’ Seri Najib Razak has successfully managed the investment community’s perception of the “prudence” of the budget with declining budget deficits, albeit at a snail’s pace.
In 2013, the budget deficit was 3.8%. The figure declined to 3.4% and 3.2% in 2014 and 2015. For this year, the Government estimates it to be 3.1% and is forecasting 3.0% for 2017.
Despite the fact that Dato’ Seri Najib will never achieve his zero deficit target in 2020 at the current snail’s pace, credit should be given to the Finance and Prime Minister for the moderating deficit in the light of difficult economic conditions – that is if the deficit figures truly reflect government spending.
Even for a non-economist, you might raise an eyebrow as to whether deficit decline looked too “uniformly smooth” in a choppy global economy. If you think that the numbers look too good to be true and have been manipulated, you are absolutely right.
In practically every budget in recent years, Dato’ Seri Najib Razak had announced multiple multi-billion ringgit projects such as the LRT Extension Project, the MRT I and II Projects and soon, the proposed High-Speed Rail and the RM55 billion East Coast Railway Link.
However, these spending were never reflected in the Government budget expenditure which showcased the “prudent” budget deficits. Where did these massive spending disappear to?
You will find part of the answer in the Non-Financial Public Corporations (NFPC) Financial Position (Table 6.13 p161 Economic Report 2016/7 – see below).
NFPCs includes 29 key government-linked companies including Indah Water Konsortium, KTM Bhd, Telekom Malaysia, Malaysia Airlines Bhd, Malaysia Airport Holdings, Petronas, Prasarana, Syarikat Perumahan Negara, Tenaga Nasional, MRT Co and the UEM Group.
What is most alarming from the table is the NFPCs’ spending deficit. In 2013, the NFPC deficit was a modest RM10.6 billion. However, since then, the NFPC deficit leaped astronomically to RM52.3 billion in 2014 and further increased to RM56.9 billion in 2015. The estimated deficit for 2016 is currently RM50.5 billion.
To lend context and perspective to the scale of these NFPC deficits, the Federal Government budget deficits for 2015 was RM37.2 billion. In 2016, it is estimated to hit RM38.7 billion while the Government forecast RM40.3 billion for 2017.
In lay man’s terms, the Government has hidden the bulk of its excessive spending under the NFPCs to maintain a semblance of “moderate” budget deficit. However, so much spending has now been shifted to these NFPCs, that the NFPC deficit has grown by leaps and bounds to now become even bigger than the Federal Government deficit!
To make matter worse, the 29 GLCs accounted in the NFPC does not include debt stricken 1Malaysia Development Bhd which is mired in more than RM20 billion of debt.
There is no question that the NFPC deficit is the biggest time-bomb to the Malaysian public finances. We can already feel its ticking with the rapidly rising “Debt Service Charges” which the Government is forced to bear annually. This is caused in no small part, to the Government being obligated to pay for interest and loans which the NFPCs are unable to fulfil.
The Federal Government Debt Service Charges have increased from RM20.3 billion in 2013 to a projected RM28.9 billion in 2017. The increase will only accelerate and snowball as NFPC financial obligations arising from the massive deficits are realised in the years to come.
By the time the time-bomb explodes, the 2017 Budget which is already depressing, will feel like a Hawaiian vacation on hindsight.
Thursday, August 11, 2016
Has Deloitte filed reports against 1MDB to the authorities on the potential fraud which led them to disown 1MDB’s audited accounts for FY2013 and FY2014?
In May 2015, I have filed a complaint against 1MDB auditors, Deloitte Malaysia for failing to carry out its auditing duties professionally.
One of the key accusations I had made was that Deloitte Malaysia has “intentionally and/or negligently failed to report the highly dubious and potentially fraudulent transactions in 1MDB to alert the relevant authorities.”
Under the International Standards on Auditing (ISA) 240 adopted by the Malaysian Institute of Accountants (MIA) in 2010, it is the responsibility of the Auditors “to maintain professional skepticism throughout the audit” and to identify and assess “the risks of material misstatement due to fraud”.
The ISA clearly states, “for significant transactions that are outside the normal course of business for the entity… the auditor shall evaluate whether the business rationale (or the lack thereof) of the transactions suggests that they may have been entered into to engage in fraudulent financial reporting or to conceal misappropriation of assets.”
When Deloitte testified with the Public Accounts Committee in June last year, they had insisted that they had carried out their duties professionally and fervently stood by the signed off accounts as true and correct. This was despite the various doubts and controversies which has arisen, including the fact that 1MDB could not repay a mere RM2 billon loan less than a month after Deloitte declared 1MDB was fully able to meet its debt and obligations in November 2014.
However, on 27 July this year, a week after the US Department of Justice laid out the charges against Jho Low and Riza Aziz which showed more than US$3.5 billion misappropriated from 1MDB, Deloitte has finally officially disowned the accounts it signed for 2013 and 2014.
Deloitte however, should not be able to wash its hands off 1MDB’s accounts just by announcing that they “could not be relied upon”. Under the Company’s Act, if an auditor, in the course of the performance of his duties as auditor of a company, discovers that there has been a breach or non-observance of any of the provisions of the Companies Act which are not “adequately dealt” with by the company’s directors and management, he must “report the matter in writing to the Registrar (of Companies)”. Such a “breach or non-observance” would include fraud and dishonesty.
The penalty for failing to do so is “imprisonment for two years or thirty thousand ringgit or both.”
Hence the simple question to Deloitte Malaysia is, now that you have finally decided that you may have been defrauded by 1MDB, will you do the necessary, are required by the law to submit the report and complaint to the Registrar of Companies for further action? The failure to do so will certainly damage the trust shareholders of companies would have for Deloitte to carry out audits diligently and professionally to protect their interest, especially in the light of fraud and embezzlement by company officials.
One of the key accusations I had made was that Deloitte Malaysia has “intentionally and/or negligently failed to report the highly dubious and potentially fraudulent transactions in 1MDB to alert the relevant authorities.”
Under the International Standards on Auditing (ISA) 240 adopted by the Malaysian Institute of Accountants (MIA) in 2010, it is the responsibility of the Auditors “to maintain professional skepticism throughout the audit” and to identify and assess “the risks of material misstatement due to fraud”.
The ISA clearly states, “for significant transactions that are outside the normal course of business for the entity… the auditor shall evaluate whether the business rationale (or the lack thereof) of the transactions suggests that they may have been entered into to engage in fraudulent financial reporting or to conceal misappropriation of assets.”
When Deloitte testified with the Public Accounts Committee in June last year, they had insisted that they had carried out their duties professionally and fervently stood by the signed off accounts as true and correct. This was despite the various doubts and controversies which has arisen, including the fact that 1MDB could not repay a mere RM2 billon loan less than a month after Deloitte declared 1MDB was fully able to meet its debt and obligations in November 2014.
However, on 27 July this year, a week after the US Department of Justice laid out the charges against Jho Low and Riza Aziz which showed more than US$3.5 billion misappropriated from 1MDB, Deloitte has finally officially disowned the accounts it signed for 2013 and 2014.
Deloitte however, should not be able to wash its hands off 1MDB’s accounts just by announcing that they “could not be relied upon”. Under the Company’s Act, if an auditor, in the course of the performance of his duties as auditor of a company, discovers that there has been a breach or non-observance of any of the provisions of the Companies Act which are not “adequately dealt” with by the company’s directors and management, he must “report the matter in writing to the Registrar (of Companies)”. Such a “breach or non-observance” would include fraud and dishonesty.
The penalty for failing to do so is “imprisonment for two years or thirty thousand ringgit or both.”
Hence the simple question to Deloitte Malaysia is, now that you have finally decided that you may have been defrauded by 1MDB, will you do the necessary, are required by the law to submit the report and complaint to the Registrar of Companies for further action? The failure to do so will certainly damage the trust shareholders of companies would have for Deloitte to carry out audits diligently and professionally to protect their interest, especially in the light of fraud and embezzlement by company officials.
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?
Saturday, July 30, 2016
Deloitte Malaysia has disowned 1MDB audited accounts for March 2013 and 2014 – will KPMG do the same for the audited accounts it signed off for 2010, 2011 and 2012?
The United States Department of Justice’s (DOJ) explosive exposé has finally resulted of Deloitte Malaysia finally telling 1MDB that they no longer stand by the March 2013 and 2014 financial statements which they signed off on 28 March 2014 and 5 November 2014 respectively.
The DOJ’s account showed that Deloitte has failed to discover in its audit 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 also did not discover anything 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.
Deloitte’s gullibility had allowed 1MDB executives and the Najib administration to cite and abuse the international audit firm’s international “reputation” to lend credibility to 1MDB. They helped mask the multi-billion dollar shenanigans which were taking place in the state-owned enterprise for the past few years.
However, Deloittle was not the only auditor guilty of such negligence. Equally gullible to 1MDB executives lies and deceit was KPMG who signed off the 1MDB accounts for the years ending March 2010, 2011 and 2012 before they were sacked in December 2013.
In fact, it was KPMG who signed of the March 2010 accounts on 4 October 2010 in less than 3 weeks after they replaced the previous auditors, Ernst & Young, who were sacked for refusing to sign off the accounts.
The March 2010 accounts was crucial because it had involved 1MDB’s first investment of US$1 billion to form the short-lived joint venture with Petrosaudi International Limited. As we now know for a fact, US$700 million of that investment was embezzled by Jho Low, with complicity by 1MDB top executives.
KPMG had then intentionally and/or negligently failed to report the fact that 1MDB’s sale and conversion of their stake in the Petrosaudi joint venture into a loan took place only after the March 2010 financial year. As a result, 1MDB was able to report artificially inflated profits and failed to disclose the key transactions which were highly dubious within 1MDB-Petrosaudi Limited.
The nullification of the 1MDB’s 2010 audit would also mean that the 2011 and 2012 audits would automatically cease to be valid as well.
The question is, now that the US DOJ has surfaced evidence that the entire Petrosaudi transaction was a fraud for the purposes of money-laundering, will KPMG in form 1MDB and the public that they will no longer stand by the audited accounts like what Deloitte has done?
Or will KPMG decide to grit its teeth and stubbornly stand by the audited accounts which have now proven at best doubtful in the light of the recent developments?
The DOJ’s account showed that Deloitte has failed to discover in its audit 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 also did not discover anything 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.
Deloitte’s gullibility had allowed 1MDB executives and the Najib administration to cite and abuse the international audit firm’s international “reputation” to lend credibility to 1MDB. They helped mask the multi-billion dollar shenanigans which were taking place in the state-owned enterprise for the past few years.
However, Deloittle was not the only auditor guilty of such negligence. Equally gullible to 1MDB executives lies and deceit was KPMG who signed off the 1MDB accounts for the years ending March 2010, 2011 and 2012 before they were sacked in December 2013.
In fact, it was KPMG who signed of the March 2010 accounts on 4 October 2010 in less than 3 weeks after they replaced the previous auditors, Ernst & Young, who were sacked for refusing to sign off the accounts.
The March 2010 accounts was crucial because it had involved 1MDB’s first investment of US$1 billion to form the short-lived joint venture with Petrosaudi International Limited. As we now know for a fact, US$700 million of that investment was embezzled by Jho Low, with complicity by 1MDB top executives.
KPMG had then intentionally and/or negligently failed to report the fact that 1MDB’s sale and conversion of their stake in the Petrosaudi joint venture into a loan took place only after the March 2010 financial year. As a result, 1MDB was able to report artificially inflated profits and failed to disclose the key transactions which were highly dubious within 1MDB-Petrosaudi Limited.
The nullification of the 1MDB’s 2010 audit would also mean that the 2011 and 2012 audits would automatically cease to be valid as well.
The question is, now that the US DOJ has surfaced evidence that the entire Petrosaudi transaction was a fraud for the purposes of money-laundering, will KPMG in form 1MDB and the public that they will no longer stand by the audited accounts like what Deloitte has done?
Or will KPMG decide to grit its teeth and stubbornly stand by the audited accounts which have now proven at best doubtful in the light of the recent developments?
Wednesday, July 27, 2016
Deloitte Malaysia washes hands off 1MDB; new 1MDB Board of Directors fails its first test of integrity and accountability
Yesterday, the new Board of Directors of scandal-ridden 1MDB had peculiarly announced 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”.
The announcement further added that 1MDB is in the midst of seeking a new auditor after Deloitte notified of its intention to resign on Feb 26.
It is clear from this peculiar announcement coming hot on the trails of the DOJ exposé was a result of Deloitte finally telling 1MDB that they no longer stand by the March 2013 and 2014 financial statements which they signed off on 28 March 2014 and 5 November 2014 respectively.
The evidence presented by the DOJ clearly showed that Deloitte has made a complete mess of 1MDB’s audit for the two financial years. The auditors were made complete fools by 1MDB’s executives who repeatedly embezzled billions of dollars from the company. They were hoodwinked, perhaps too readily, by fictitious documents and outrageous lies presented by the company’s management.
Deloitte has failed to discover in its audit that 1MDB had made more than US$3.5 billion of payments over the course of 2012 to 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.
Deloitte’s gullibility had allowed 1MDB executives and the Najib administration to cite and abuse the international audit firm’s international “reputation” to lend credibility to 1MDB. They helped mask the multi-billion dollar shenanigans which were taking place in the state-owned enterprise for the past few years.
With the DOJ’s exposé, it has finally come to a stage where it is no longer tenable for Deloitte to standby the financial statements it audited for 2013 and 2014. Hence 1MDB was forced into making this queer announcement to deny the veracity of its own financial report.
While Deloitte’s belated withdrawal of its endorsement for 1MDB’s financial statements were understandable, the 1MDB Board’s continued insistence that “no wrongdoing has been committed by 1MDB and that the past audited financial statements continue to show a true and fair view of the company’s affairs” is shocking and utterly irresponsible.
Despite the overwhelming evidence which has publicly surfaced, the newly appointed Directors led by Treasury-General Tan Sri Irwan Serigar is persisting with a massive cover up of the crimes which have taken place within 1MDB.
It is now obviously that Tan Sri Irwan Serigar is only interested in carrying on the “stellar” work of the previous Board of Directors who had resigned en masse in absolute disgrace in April.
When the Treasury-General had testified before the Parliamentary Public Accounts Committee in June 2014, he had absolved himself from all blame by claiming that he had no control or supervisory powers over 1MDB. In fact, he blamed Clause 117 of 1MDB’s Memorandum and Articles of Association which grated all such powers directly to the Prime Minister.
However, despite the abolition of the above Clause and his appointment as the new Chairman, Tan Sri Irwan Serigar has shown that he is cut from the same cloth. His loyalty is to Dato' Seri Najib Razak and he has little care for integrity and accountability.
Saturday, July 09, 2016
Deputy Home Minister Datuk Nur Jazlan Mohamad should advise the PM and the Cabinet to declassify the Auditor-General’s Report on 1MDB
I am extremely disappointed that Deputy Home Minister, Datuk Nur Jazlan Mohamad had called on the Police to investigate Sarawak Report, which has successfully procured a copy of the Auditor-General’s (AG) Report on 1MDB for breach of the Official Secrets Act (OSA).
The exposé 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.
This particular disappointment with Datuk Nur Jazlan Mohamad was because he was formerly the Chairman of the PAC prior to his “promotion” as the Deputy Home Minister. Of all people, Datuk Nur Jazlan should understand the concept of accountability and transparency which he preached during his tenure as the Chairman.
In fact, Datuk Nur Jazlan often led the line to demand answers from 1MDB, gave clear instructions to the Auditor-General on the information to be acquired and even concluded that the mysterious key-man, Low Taek Jho be summoned to testify before the PAC. His stand on the matter was clear and can be read in the published Hansards as well as his press conferences.
What has caused the 180 degrees about turn in his position on the investigation on the single largest financial scandal in Malaysia’s history since his appointment to the front bench?
His endorsement for the Police to pursue the whistle-blowers would unfortunately, also destroy all the goodwill and reputation he has gained over the past few years as one of the few UMNO politicians with some trace of integrity.
Malaysians would have pinned hopes on him to carry on his crusades for better accountability in the administration of government subsidiaries. In this case, we would have hoped that he would at the very least attempt to convince the Prime Minister, Dato’ Seri Najib Razak and his Cabinet that the right thing to do under the circumstances is to “declassify” the Report as it ought to have been.
Datuk Nur Jazlan must make it clear to the Prime Minister that with the Report already leaked, there is no choice for the Government but to declassify the Report to save its own credibility and reputation. What is the point of keeping it a secret any more now that it has been leaked?
Otherwise, Datuk Nur Jazlan and the Malaysian Government will be seen as clearly attempting to cover up the enormous scandal to protect the wrong doers in the debt-ridden state-owned company.
Thursday, October 22, 2015
Who is running SRC International today?
Malaysians read with interest, the first ever media statement by SRC International Sdn Bhd, a mysterious former subsidiary of 1Malaysia Development Bhd (1MDB) which has been taken over directly by the Ministry of Finance.
SRC International which is funded by a RM4 billion loan from Kumpulan Wang Amanah Persaraan (KWAP), dismissed outright all allegations of misappropriation of funds.
The Wall Street Journal has previously exposed the fact that SRC International has transferred a total of RM42 million to the Prime Minister’s personal bank account. The transfers were carried out between December 2014 and March 2015, via its subsidiary Gandingan Mentari Sdn Bhd and Ihsan Perdana Sdn Bhd. The latter company carries out corporate social responsibility work of 1MDB.
The above transactions clearly pointed to criminal breach of trust as substantial funds from a Ministry of Finance subsidiary were transferred to the personal accounts of the Minister of Finance. It has also been exposed by the Sarawak Report that the former Attorney-General, Tan Sri Abdul Gani Patail was moments charging Dato’ Seri Najib Razak for corruption or criminal breach of trust over the above transactions before being unceremoniously retired and replaced by the Prime Minister.
However, for the first time, SRC International released a media statement which said, “none of it was misappropriated as claimed by those with malicious intent.”
SRC further added, “We strongly reject these allegations. Having conducted an internal investigation, we believe these claims were based on documents that were fabricated, therefore representing a deliberate attempt to mislead the public.”
It appears that SRC International has taken a leaf off its former parent, 1MDB in making sweeping denials without specifics.
The questions are very simple. Did SRC International transfer a total RM50 million to its subsidiary, Gandingan Mentari? Did Gandingan Mentari then transfer a total of RM50 million to Ihsan Perdana? Further to that did Ihsan Perdana which acts on behalf of 1MDB, transfer RM42 million of that amount to the Prime Minister? Those are very simple “yes” or “no” questions which doesn’t take a rocket scientist to answer.
Instead, SRC chose to be hyperbolic, calling “on those quarters who are engaged in efforts to overthrow the government to desist from involving SRC in their political campaign and to avoid making false and unsubstantiated allegations”.
We would like to ask the Ministry of Finance to inform us, who exactly is running SRC International today. Who actually carried out the “internal investigations” and more interestingly, who wrote and approved the media statement?
As far as we are aware, the top executive of SRC, Nik Faisal Ariff Kamil, a close associate of Low Taek Jho, has been on the run for the past 6 months. Similarly, another key director of SRC International, Datuk Suboh bin Mohd Yassin has also disappeared. Both individuals are wanted by the Malaysian Anti-Corruption Commission (MACC) to assist with investigations.
Is there already a new management team put in place to run SRC International? Are the identities of this new team top secret as well?
In addition, the Ministry of Finance Secretary-General, Tan Sri Irwan Serigar must let us know why no directors representing the Ministry has been appointed to SRC International to monitor its activities. Such an appointment is never more important given that the questions of the governance of its subsidiary has been in the spotlight.
SRC International which is funded by a RM4 billion loan from Kumpulan Wang Amanah Persaraan (KWAP), dismissed outright all allegations of misappropriation of funds.
The Wall Street Journal has previously exposed the fact that SRC International has transferred a total of RM42 million to the Prime Minister’s personal bank account. The transfers were carried out between December 2014 and March 2015, via its subsidiary Gandingan Mentari Sdn Bhd and Ihsan Perdana Sdn Bhd. The latter company carries out corporate social responsibility work of 1MDB.
The above transactions clearly pointed to criminal breach of trust as substantial funds from a Ministry of Finance subsidiary were transferred to the personal accounts of the Minister of Finance. It has also been exposed by the Sarawak Report that the former Attorney-General, Tan Sri Abdul Gani Patail was moments charging Dato’ Seri Najib Razak for corruption or criminal breach of trust over the above transactions before being unceremoniously retired and replaced by the Prime Minister.
However, for the first time, SRC International released a media statement which said, “none of it was misappropriated as claimed by those with malicious intent.”
SRC further added, “We strongly reject these allegations. Having conducted an internal investigation, we believe these claims were based on documents that were fabricated, therefore representing a deliberate attempt to mislead the public.”
It appears that SRC International has taken a leaf off its former parent, 1MDB in making sweeping denials without specifics.
The questions are very simple. Did SRC International transfer a total RM50 million to its subsidiary, Gandingan Mentari? Did Gandingan Mentari then transfer a total of RM50 million to Ihsan Perdana? Further to that did Ihsan Perdana which acts on behalf of 1MDB, transfer RM42 million of that amount to the Prime Minister? Those are very simple “yes” or “no” questions which doesn’t take a rocket scientist to answer.
Instead, SRC chose to be hyperbolic, calling “on those quarters who are engaged in efforts to overthrow the government to desist from involving SRC in their political campaign and to avoid making false and unsubstantiated allegations”.
We would like to ask the Ministry of Finance to inform us, who exactly is running SRC International today. Who actually carried out the “internal investigations” and more interestingly, who wrote and approved the media statement?
As far as we are aware, the top executive of SRC, Nik Faisal Ariff Kamil, a close associate of Low Taek Jho, has been on the run for the past 6 months. Similarly, another key director of SRC International, Datuk Suboh bin Mohd Yassin has also disappeared. Both individuals are wanted by the Malaysian Anti-Corruption Commission (MACC) to assist with investigations.
Is there already a new management team put in place to run SRC International? Are the identities of this new team top secret as well?
In addition, the Ministry of Finance Secretary-General, Tan Sri Irwan Serigar must let us know why no directors representing the Ministry has been appointed to SRC International to monitor its activities. Such an appointment is never more important given that the questions of the governance of its subsidiary has been in the spotlight.
Wednesday, August 26, 2015
The new AG must explain why the newly renamed taskforce will not be investigating 1MDB or its related companies
The new Attorney-General (AG), Tan Sri Mohamed Apandi Ali announced yesterday that the National Revenue Recovery Enforcement Team (NRRET) is basically the new name for the previous special task force which was thought to be disbanded after the former Attorney General, Tan Sri Abdul Ghani Patail was sacked.
"NRRET is not a new task force but is a rebranding of the previous special task force that has been in existence since 2011," the AG Chambers said in a statement.
However, what was shocking in the statement was the announcement that the "NRRET is not in any way involved with any investigations involving 1MDB and its related companies."
This is despite the AGC saying that the "aims of NRRET remain the same, which is to assist the government in dealing with evasion of custom duties and tax by individuals and corporate bodies, smuggling activities, misuse of subsidised goods, illegal outflow of funds, and acts of corruption".
Malaysians deserves the right to know why the investigations on 1MDB and its related companies which were carried out by the task force is stopped.
"NRRET is not a new task force but is a rebranding of the previous special task force that has been in existence since 2011," the AG Chambers said in a statement.
However, what was shocking in the statement was the announcement that the "NRRET is not in any way involved with any investigations involving 1MDB and its related companies."
This is despite the AGC saying that the "aims of NRRET remain the same, which is to assist the government in dealing with evasion of custom duties and tax by individuals and corporate bodies, smuggling activities, misuse of subsidised goods, illegal outflow of funds, and acts of corruption".
Malaysians deserves the right to know why the investigations on 1MDB and its related companies which were carried out by the task force is stopped.
Saturday, August 22, 2015
Rahman Dahlan bonkers to compare the RM2.6 billion deposit into the PM's personal bank account to Selangor’s set up of DEIG
Yesterday, it was reported Dato’ Abdul Rahman Dahlan claimed that Selangor’s controversial new investment arm, Darul Ehsan Investment Group (DEIG), is more disturbing than the RM2.6 billion donation to Prime Minister Dato’ Seri Najib Razak personal bank account.
He said there was “more at stake with the RM30 billion in assets” under Menteri Besar Incorporated (MBI), planned for a takeover by DEIG, than the RM2.6 billion donation.
I believe that Dato’ Rahman Dahlan must have gone completely bonkers after multiple vain attempts to defend the Prime Minister’s most immoral and unethical “donation”.
Firstly, the Minister can’t even get his simple facts right. Upon consolidation of the state-owned assets under DEIG, it would not add up to RM30 billion – we wish it did – but to RM6.3 billion.
However, the point as admitted by the BN Strategic Communications Director himself, Dato’ Abdul Rahman Dahlan, is that these are “assets” of the state, as opposed to a mysterious RM2.6 billion foreign donation into the personal account of the Prime Minister for completely unknown expenditures.
As a matter of fact, how can this RM6.2 billion of “assets” even be deemed “more disturbing” than the Federal Government’s 1Malaysia Development Bhd (1MDB) which has accumulated RM42 billion of “debt” as at 2014?
He said there was “more at stake with the RM30 billion in assets” under Menteri Besar Incorporated (MBI), planned for a takeover by DEIG, than the RM2.6 billion donation.
I believe that Dato’ Rahman Dahlan must have gone completely bonkers after multiple vain attempts to defend the Prime Minister’s most immoral and unethical “donation”.
Firstly, the Minister can’t even get his simple facts right. Upon consolidation of the state-owned assets under DEIG, it would not add up to RM30 billion – we wish it did – but to RM6.3 billion.
However, the point as admitted by the BN Strategic Communications Director himself, Dato’ Abdul Rahman Dahlan, is that these are “assets” of the state, as opposed to a mysterious RM2.6 billion foreign donation into the personal account of the Prime Minister for completely unknown expenditures.
As a matter of fact, how can this RM6.2 billion of “assets” even be deemed “more disturbing” than the Federal Government’s 1Malaysia Development Bhd (1MDB) which has accumulated RM42 billion of “debt” as at 2014?
Monday, June 08, 2015
Pakatan Rakyat's End Will Not, and Ever, Delude Our Principles
Pakatan Rakyat Selangor is in unchartered waters post-PAS Muktamar.
The PAS General Assembly (“Muktamar”) has decided to sever all ties (“putus hubungan”) and stop all political cooperation “kerjasama politik” with DAP. As a result, Pakatan Rakyat in Selangor has undoubtedly entered unchartered waters. The only thing certain under such circumstances is that nothing can or will be the same again.
It is inconceivable for anyone to think or believe that Pakatan Rakyat can continue to exist in its current state given the above unequivocal motion. The Pakatan Rakyat government comprises of three political parties which subscribed to a common policy platform. However, when the common policy platform is breached, compounded by the decision of one party to stop cooperation with another within the coalition, then the coalition naturally collapses.
How does the Government function, when the state executive councillors (Exco) of PAS refuses to cooperate with the Exco from DAP when carrying out their respective duties? Can one even imagine how surreal the state Exco meeting will be, with the PAS Exco ignoring the DAP Excos or pretending that they don’t exist?
The problems do not just exist within the Executive Council, but with all levels of the Selangor Government. Will PAS local councillors for example, pay no heed to all comments, suggestions and proposals by DAP local councillors when carrying out their responsibilities at the local government level?
What’s more, such refusal to cooperate will be egged on by PAS leaders such as Nasruddin Hassan Tantawi, the top vote-getter amongst the 18 newly elected central committee members. After all, he urged the Party faithfuls to fight DAP with his now-famous war cry, “We may be dressed in jubah (robes) and turbans, but you must remember that underneath this jubah, there are elbows and knees that can be used (against DAP).”
Hence it will never be “business as usual” again. The question which remains, and is still unanswered is what form of political realignment will take place to allow a new coalition government to remain in power in Selangor.
As my colleague, Johor state chairman and MP for Kluang, Liew Chin Tong has alluded to, there is now a vacuum in the anti-establishment, moderate and progressive Malay political space after PAS swerved hard to the far-right. He said,
"In the weeks and months to come, the search for new paths by the progressives and all other Malay moderate opinion leaders to fill the vacuum would see major political realignments in Malaysian politics."
The ability for this gap to be filled, whether by the DAP and/or PKR, or by the rise of new factions or parties, will determine the future of the new coalition for Selangor.
The failure of this gap to be filled, which will allow a tenable coalition which subscribes firmly to the “Common Policy Platform” endorsed by the Rakyat in the last general election, may lead to a collapse of the Selangor state government and for elections to be called.
As of today, no final decision have been made by DAP Selangor. In the coming days, we will engage and discuss with DAP Central Executive Committee and abide by any decision which is made at the national level. Unlike leaders of several other political parties we know of, Malaysians can be assured that DAP leaders in Selangor will not be hypocrites and betray our principles to remain in power at all cost.
Tony Pua
Monday, May 11, 2015
Riza Aziz Should TRX Land From Tabung Haji
According to Bernama yesterday, the Prime Minister, Dato’ Seri Najib Razak pointed out that Lembaga Tabung Haji’s (LTH) plan to turn over the land it bought from 1MDB to the private sector was a sound commercial decision as it would see the fund earn a few million ringgit overnight.
The Prime Minister, who is also the Finance Minister must be joking. If it is so easy for LTH to “earn a few million ringgit”, then why did 1MDB, who is so desperate for funds, not sell it to those parties who are allegedly willing to purchase it for more money than what LTH was willing to pay?
Instead, LTH is forced to pay cash upfront for the land and undertake the entire risk of holding the land on behalf of 1MDB to look for a buyer. Why couldn’t 1MDB have found the alleged willing-buyers who were not only so readily available, they are allegedly willing to pay RM5 million more than what LTH has paid?
There’s absolutely no credibility in the claims by the Chairman of LTH, Datuk Abdul Azeez Abdul Rahim that the land would be sold in a week. He even committed that the land will be sold to a buyer at a profit of at least RM5 million and will be concluded within the next few weeks.
Hence we call upon Dato’ Seri Najib Razak to lead by example and immediately advise his own stepson, Riza Aziz to dispose of his luxury properties in the United States and purchase the above land from LTH.
It was reported in January this year by the New York Times, that Riza Aziz has purchased his New York Park Laurel luxury condominium and Los Angeles Beverly Hills bungalow for US$33.5 million (RM121 mil) and US$17.5 million (RM63.2 mil) respectively. What was more amazing was that these properties worth US$51 million (RM184 mil) were acquired in cash from none other than Jho Low!
We now know of course, one of the reasons why 1MDB is in such dire straits with RM42 billion of debt was because Jho Low’s companies siphoned billions of ringgit from 1MDB. And now, 1MDB is forced to dispose of all its assets which it acquired on the cheap from the Government to raise funds to service its debts. In this case, 1MDB sold the 1.56 acre of land to LTH for RM2,773 per square feet (psf) despite acquiring the land for less than RM64 psf.
Under such circumstances, since the Prime Minister believes that paying more than RM2,773 psf for the piece of land is still such a good deal, he should immediately advise Riza Aziz to dispose of his RM184 million of properties in the United States and bring back the cash to buy this piece of land from LTH.
If Dato’ Seri Najib insists that Malaysians have to bailout 1MDB for its monstrous financial problems, then it is only right that he set the example by asking his family members of unexplained immense wealth to repatriate their money to bailout 1MDB first.
The Prime Minister, who is also the Finance Minister must be joking. If it is so easy for LTH to “earn a few million ringgit”, then why did 1MDB, who is so desperate for funds, not sell it to those parties who are allegedly willing to purchase it for more money than what LTH was willing to pay?
Instead, LTH is forced to pay cash upfront for the land and undertake the entire risk of holding the land on behalf of 1MDB to look for a buyer. Why couldn’t 1MDB have found the alleged willing-buyers who were not only so readily available, they are allegedly willing to pay RM5 million more than what LTH has paid?
There’s absolutely no credibility in the claims by the Chairman of LTH, Datuk Abdul Azeez Abdul Rahim that the land would be sold in a week. He even committed that the land will be sold to a buyer at a profit of at least RM5 million and will be concluded within the next few weeks.
Hence we call upon Dato’ Seri Najib Razak to lead by example and immediately advise his own stepson, Riza Aziz to dispose of his luxury properties in the United States and purchase the above land from LTH.
It was reported in January this year by the New York Times, that Riza Aziz has purchased his New York Park Laurel luxury condominium and Los Angeles Beverly Hills bungalow for US$33.5 million (RM121 mil) and US$17.5 million (RM63.2 mil) respectively. What was more amazing was that these properties worth US$51 million (RM184 mil) were acquired in cash from none other than Jho Low!
We now know of course, one of the reasons why 1MDB is in such dire straits with RM42 billion of debt was because Jho Low’s companies siphoned billions of ringgit from 1MDB. And now, 1MDB is forced to dispose of all its assets which it acquired on the cheap from the Government to raise funds to service its debts. In this case, 1MDB sold the 1.56 acre of land to LTH for RM2,773 per square feet (psf) despite acquiring the land for less than RM64 psf.
Under such circumstances, since the Prime Minister believes that paying more than RM2,773 psf for the piece of land is still such a good deal, he should immediately advise Riza Aziz to dispose of his RM184 million of properties in the United States and bring back the cash to buy this piece of land from LTH.
If Dato’ Seri Najib insists that Malaysians have to bailout 1MDB for its monstrous financial problems, then it is only right that he set the example by asking his family members of unexplained immense wealth to repatriate their money to bailout 1MDB first.
Wednesday, April 22, 2015
Malaysians will pay more for electricity to help bailout 1MDB
During my speech at the DAP Petaling Jaya Fund-Raising Dinner in November 2014, I had told the audience that Malaysians will have to pay higher electricity prices in order to bailout 1MDB. It was the same speech which the Prime Minister, Dato’ Seri Najib Razak has subsequently sued me for defamation.
I had then asserted that Malaysians have pay higher electricity prices because 1MDB was awarded several lucrative independent power producer (IPP) concessions without any open tender. Such direct awards went directly against the publicly stated principles of the Energy Commission to adopt open tender practices in order to promote competition in the industry.
The contracts awarded included a 2,400MW combined-cycle gas-turbine power plant in August 2014 and a 50MW solar farm in March 2014. In addition, 1MDB was also awarded a 2,000MW coal-fired power plant in February, after the lowest tariff bid by YTL Power was controversially disqualified on a technicality.
I had argued that the tariff wil be higher for Malaysians in the future because the Government will award 1MDB will more lucrative tariffs in order to create more profits for the distressed firm to pay of its RM42 billion of monstrous debt. Otherwise, why would the Government eschew the open tender process if 1MDB would offer the lowest possible tariff in the first place?
However, the situation is even worse than I have anticipated, because the Government has agreed to raise the tariff rates for 1MDB power plants even before their construction have even commence.
It was reported on Monday in The Edge Financial Daily that the Energy Commission has already approved an increase in tariff for the solar power plant from 41 sen per kWh to 50 sen per kWh. That represents a whopping 22% hike in electricity tariffs within a year after the project has been awarded via direct negotiations. The power supply will be sold to Tenaga Nasional, which will in turn transfer the cost burden to consumers.
As highlighted by my colleague, the Member of Parliament for Serdang, Dr Ong Kian Ming on Monday itself, the 50 sen tariff rate is higher the 49 sen recently awarded to smaller solar plants sized between 10MW to 30MW via competitive bidding. As he rightly pointed out, the substantially larger 50MW solar farm will naturally enjoy higher economies of scale to offer cheaper prices. In addition, with the rapidly plummeting global solar photovoltaic panel prices, tariffs should be declining over time, and not be increased by a whopping 22%.
Worse, The Financial Daily also reported that 1MDB is in the process of “disposing” its winning bid for the 2,000MW coal-fired power plant which it won via the controversial open tender. This is because the debt-laden and cash-stricken 1MDB has no money to fund the project. Furthermore no bank is willing to lend any more money to the company.
However, instead of cancelling the award due to breach of concession terms, the Energy Commission is allowing 1MDB to profit from the license award by on-selling its rights to Tenaga Nasional Bhd (TNB). To sweeten the deal for TNB to acquire the concession from 1MDB, it is understood that TNB will be allowed to renegotiate the tariff which was set earlier during the bid. Once again, it means higher profits for 1MDB for doing absolutely nothing other than to on-sell the concession, while the rakyat will have to pay for higher electricity rates to TNB.
If the Government is truly concerned with the interest of the ordinary man, then surely the right thing to do will be to cancel all of the above recently awarded power plant concessions to 1MDB, simply because the latter has failed to produce the necessary funds to commence on their construction. The power plants should instead be tendered out in an open and transparent fashion so that the most financial strong and experienced companies which bid at the lowest tariff rates should be awarded the contracts.
However, the Government chose to artificially improve the profitability of 1MDB in order to cover up the billions of ringgit of losses suffered by the company. The losers are Malaysians who are forced to bear higher electricity prices on top of the recently implemented Goods and Services Tax. The above proves that I am right many times over that the men-on-the-street are being robbed with higher electricity prices in order to bailout 1MDB.
I had then asserted that Malaysians have pay higher electricity prices because 1MDB was awarded several lucrative independent power producer (IPP) concessions without any open tender. Such direct awards went directly against the publicly stated principles of the Energy Commission to adopt open tender practices in order to promote competition in the industry.
The contracts awarded included a 2,400MW combined-cycle gas-turbine power plant in August 2014 and a 50MW solar farm in March 2014. In addition, 1MDB was also awarded a 2,000MW coal-fired power plant in February, after the lowest tariff bid by YTL Power was controversially disqualified on a technicality.
I had argued that the tariff wil be higher for Malaysians in the future because the Government will award 1MDB will more lucrative tariffs in order to create more profits for the distressed firm to pay of its RM42 billion of monstrous debt. Otherwise, why would the Government eschew the open tender process if 1MDB would offer the lowest possible tariff in the first place?
However, the situation is even worse than I have anticipated, because the Government has agreed to raise the tariff rates for 1MDB power plants even before their construction have even commence.
It was reported on Monday in The Edge Financial Daily that the Energy Commission has already approved an increase in tariff for the solar power plant from 41 sen per kWh to 50 sen per kWh. That represents a whopping 22% hike in electricity tariffs within a year after the project has been awarded via direct negotiations. The power supply will be sold to Tenaga Nasional, which will in turn transfer the cost burden to consumers.
As highlighted by my colleague, the Member of Parliament for Serdang, Dr Ong Kian Ming on Monday itself, the 50 sen tariff rate is higher the 49 sen recently awarded to smaller solar plants sized between 10MW to 30MW via competitive bidding. As he rightly pointed out, the substantially larger 50MW solar farm will naturally enjoy higher economies of scale to offer cheaper prices. In addition, with the rapidly plummeting global solar photovoltaic panel prices, tariffs should be declining over time, and not be increased by a whopping 22%.
Worse, The Financial Daily also reported that 1MDB is in the process of “disposing” its winning bid for the 2,000MW coal-fired power plant which it won via the controversial open tender. This is because the debt-laden and cash-stricken 1MDB has no money to fund the project. Furthermore no bank is willing to lend any more money to the company.
However, instead of cancelling the award due to breach of concession terms, the Energy Commission is allowing 1MDB to profit from the license award by on-selling its rights to Tenaga Nasional Bhd (TNB). To sweeten the deal for TNB to acquire the concession from 1MDB, it is understood that TNB will be allowed to renegotiate the tariff which was set earlier during the bid. Once again, it means higher profits for 1MDB for doing absolutely nothing other than to on-sell the concession, while the rakyat will have to pay for higher electricity rates to TNB.
If the Government is truly concerned with the interest of the ordinary man, then surely the right thing to do will be to cancel all of the above recently awarded power plant concessions to 1MDB, simply because the latter has failed to produce the necessary funds to commence on their construction. The power plants should instead be tendered out in an open and transparent fashion so that the most financial strong and experienced companies which bid at the lowest tariff rates should be awarded the contracts.
However, the Government chose to artificially improve the profitability of 1MDB in order to cover up the billions of ringgit of losses suffered by the company. The losers are Malaysians who are forced to bear higher electricity prices on top of the recently implemented Goods and Services Tax. The above proves that I am right many times over that the men-on-the-street are being robbed with higher electricity prices in order to bailout 1MDB.
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