Ministry of Finance (MOF) Treasurer-General and Bandar Malaysia chairman Tan Sri Irwan Serigar continued to ask Malaysians to wait and see for the outcome of Bandar Malaysia’s call for a new master developer. When launching online radio station eFM yesterday, Irwan told reporters to “wait, the time will come,” when asked about the status of Bandar Malaysia’s call.
The call for a master developer followed the collapse of the RM7.41 billion deal with a consortium led by Iskandar Waterfront Holdings (IWH) to acquire a 60% stake in Bandar Malaysia. Following that collapse, Bandar Malaysia Sdn. Bhd., the wholly-owned MOF Inc. company and former 1MDB subsidiary, announced that it was going to be opening a tender for a master developer for the Bandar Malaysia project.
The new tender was going to include more stringent criteria including that the developer needed to be an affiliate of a Fortune 500 company and needed to have cumulatively generated RM50 billion in revenue in the last 3 consecutive years.
When the RFP was first announced in May, the new Bandar Malaysia chairman and MoF Secretary-General Irwan Serigar Abdullah said that the RFP deadline would close on June 30 and the final decision would be made by July 14.
On August 23, Tan Sri Irwan said that 6 companies had ‘expressed interest’ and had visited the site. “We took them for a site visit and they need to submit their proposal by the end of this month,” he said.
The Malaysian Reserve then reported on October 31 that Tan Sri Irwan said the announcement for the master developer would be “coming soon, coming soon”.
On November 8, I had asked the Minister of Finance to state how many companies had submitted finalised proposals for the re-tender of the Bandar Malaysia project, how many of those companies were Fortune 500 companies and when the tender decision would be announced.
He again merely responded that 8 companies which had met the criteria had “expressed their interest” in becoming the master developer.
It has now become quite obvious that since June this year, the only progress we have made is purportedly 6 to 8 companies have “expressed interest” in Bandar Malaysia despite a decision which was to be “made by July 14”.
We call upon Tan Sri Irwan Serigar to confirm if in fact, there have been no firm bids tabled by any so-called Fortune 500 company to acquire and develop Bandar Malaysia, especially not at the astronomical price demanded by the Ministry of Finance.
Showing posts with label Irwan Serigar. Show all posts
Showing posts with label Irwan Serigar. Show all posts
Wednesday, November 29, 2017
Tuesday, March 14, 2017
1MDB Chairman, Tan Sri Irwan Serigar must answer as to why his fellow Directors are so tardy in making urgent and critical decisions on the financial audit of scandal-ridden 1MDB
The last audited financial statements filed by 1MDB was for the accounts for the year-ending March 2014. 1MDB has failed to file their financial statements for 2 consecutive years, March 2015 and March 2016 which were due to by October 2015 and 2016 respectively.
Even so, Deloitte Malaysia has since July last year, withdrawn its endorsements for the financial statements of March 2013 and 2014. At the same time, the disgraced audit firm announced that it had resigned as the auditors of 1MDB as at February 2016.
The new auditors, Parker Randall, which is operated locally by a four-partner Afrizan Tarmili Khairul Azhar (aftaas) was appointed in January this year.
I had asked in my parliamentary question to the Finance Minister last week as to whether Parker Randall will re-audit the 1MDB financial statements for March 2013 and 2014.
The Minister of Finance responded that the Board of Directors will make a decision on the above on “after further discussions with the new auditor”.
The reply also stated that the last time the Board of Directors met to discuss the implications of the US Department of Justice asset-seizure kleptocracy suit was prior to 26 July 2016 when 1MDB had issued a press statement.
Malaysians are shocked that for exactly 1 year after Treasurer-General, Tan Sri Irwan Serigar took over the 1MDB Chairmanship from the disgraced Tan Sri Lodin Wok Kamaruddin, the Board of Directors had basically sat on their backsides and demonstrated little or no urgency over the 1MDB fiasco.
Allegations and evidence have been produced and made available globally by the US Department of Justice which showed that more than US$5 billion have been misappropriation from 1MDB and laundered around the world and yet our Treasurer-General acts as if it is no big deal. These allegations and evidence have been supported since by court prosecutions which took place in Singapore and Switzerland against banks which had facilitated the money-laundering transactions.
Worse, it has also been discovered that at least US$731 million from the above misappropriated sum had found its way into the Prime Minister, Dato’ Seri Najib Razak’s personal bank account. Despite the gravity of the crime, our Treasurer-General, the most senior civil servant responsible for managing our hundreds of billions of ringgit of annual tax revenue has shown only nonchalance in the scandal.
Any auditor worth their salt would immediately tell you that they will not be able to complete a financial audit for the year without the “opening balance” or prior year accounts. In this case, it is clear that there have been no audited and certified accounts for March 2013 and 2014 given that Deloitte has withdrawn its endorsement.
What’s more, 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.
The only resolution for the above matter is for the accounts for March 2013 and 2014 to be re-audited and re-stated.
Hence, what is the point of appointing Parker Randall as the new auditors if they cannot properly perform their duties? Why is the 1MDB Board of Directors dragging its feet under the chairmanship of the Treasurer-General?
We call upon Tan Sri Irwan Serigar to do what he is being paid to do by the Malaysian tax-payers properly. He must remember that his job is to protect the integrity of his office and not to protect those who have misappropriated and stolen billions of ringgit from the Government and the people.
Even so, Deloitte Malaysia has since July last year, withdrawn its endorsements for the financial statements of March 2013 and 2014. At the same time, the disgraced audit firm announced that it had resigned as the auditors of 1MDB as at February 2016.
The new auditors, Parker Randall, which is operated locally by a four-partner Afrizan Tarmili Khairul Azhar (aftaas) was appointed in January this year.
I had asked in my parliamentary question to the Finance Minister last week as to whether Parker Randall will re-audit the 1MDB financial statements for March 2013 and 2014.
The Minister of Finance responded that the Board of Directors will make a decision on the above on “after further discussions with the new auditor”.
The reply also stated that the last time the Board of Directors met to discuss the implications of the US Department of Justice asset-seizure kleptocracy suit was prior to 26 July 2016 when 1MDB had issued a press statement.
Malaysians are shocked that for exactly 1 year after Treasurer-General, Tan Sri Irwan Serigar took over the 1MDB Chairmanship from the disgraced Tan Sri Lodin Wok Kamaruddin, the Board of Directors had basically sat on their backsides and demonstrated little or no urgency over the 1MDB fiasco.
Allegations and evidence have been produced and made available globally by the US Department of Justice which showed that more than US$5 billion have been misappropriation from 1MDB and laundered around the world and yet our Treasurer-General acts as if it is no big deal. These allegations and evidence have been supported since by court prosecutions which took place in Singapore and Switzerland against banks which had facilitated the money-laundering transactions.
Worse, it has also been discovered that at least US$731 million from the above misappropriated sum had found its way into the Prime Minister, Dato’ Seri Najib Razak’s personal bank account. Despite the gravity of the crime, our Treasurer-General, the most senior civil servant responsible for managing our hundreds of billions of ringgit of annual tax revenue has shown only nonchalance in the scandal.
Any auditor worth their salt would immediately tell you that they will not be able to complete a financial audit for the year without the “opening balance” or prior year accounts. In this case, it is clear that there have been no audited and certified accounts for March 2013 and 2014 given that Deloitte has withdrawn its endorsement.
What’s more, 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.
The only resolution for the above matter is for the accounts for March 2013 and 2014 to be re-audited and re-stated.
Hence, what is the point of appointing Parker Randall as the new auditors if they cannot properly perform their duties? Why is the 1MDB Board of Directors dragging its feet under the chairmanship of the Treasurer-General?
We call upon Tan Sri Irwan Serigar to do what he is being paid to do by the Malaysian tax-payers properly. He must remember that his job is to protect the integrity of his office and not to protect those who have misappropriated and stolen billions of ringgit from the Government and the people.
Thursday, January 05, 2017
While blinkered Treasury-General Tan Sri Irwan Serigar continues to praise the Emperor’s new clothes, little hope of seeing meaningful changes to Malaysia’s drifting economy
The dreadful performance of the Malaysian ringgit and a listless economy under-performing its potential are not merely depressing news but have caused Malaysians plenty of pain.
And yet, the most senior civil servant in the Ministry of Finance, arguably a most powerful one, the Treasury-General insisted that all is well, and what is wrong is only “a matter of perception”.
"I go to restaurants and supermarkets, who are there? People are buying and travelling. Some group of people are making noise as though the whole country is in trouble,” Tan Sri Irwan Serigar quipped at a press conference yesterday.
We are stunned that the Treasury-General thinks that just because there are people in restaurants and people are still visiting the supermarkets for the daily needs, everything’s fine and dandy with the economy.
Does he expect all Malaysians to be jobless and living in the streets begging for food before he would recognise that the economy is in trouble?
According to him, the plummeting of the ringgit was a short-term phenomenon that would recover in the middle-term following the measures taken by Bank Negara Malaysia (BNM).
However, isn’t that exactly what the Ministers and BNM have been telling Malaysians annually over the past 4 years as the ringgit lost more than 40% of its value against the dollar? How can it still be a short-term problem when we are consistently the worst performer among the major regional currencies for each of the past few years?
Worse, the latest Nikkei Malaysia Purchasing Manager’s Index (PMI) clearly cited that our manufacturing production has been shrinking for 21 consecutive months, with no signs of improvement.
The PMI is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases.
How can Tan Sri Irwan continue to insist that all is well when our manufacturing performance is so pathetic despite the fact that our substantially depreciated currency should have made our goods so much cheaper and competitive?
The biggest shocker from the press conference however, is the fact that he believed that all the negative perception arising from the problems with the economy will be righted and vanished immediately once the media publish his “all is well and good” assurance.
He told the media to contribute to the ringgit appreciation through positive reports about the currency and economy. "Hopefully, when you publish today's briefing, the ringgit will be strengthened," said Tan Sri Irwan.
How we Malaysians can renew our hopes on the economy when we have such a hopeless Treasury-General is beyond me.
Tan Sri Irwan Serigar’s refusal to address and resolve the issues surrounding the tens of billions of ringgit which have been siphoned from the Ministry of Finance subsidiaries, 1MDB and SRC International, which made Malaysia an infamous kleptocratic capital of the world is one thing. After all, he is not the first person you would accuse of “cari makan”.
However, his woeful attempt to wave away our economic misery with his magic wand without recognising the problems we face and without offering any concrete measures to remedy the situation proved beyond doubt that the Najib administration is completely bankrupt of ideas.
In order to have any chance of reviving our currency and economy, the Najib administration must be replaced and there is no better time than the impending general election.
And yet, the most senior civil servant in the Ministry of Finance, arguably a most powerful one, the Treasury-General insisted that all is well, and what is wrong is only “a matter of perception”.
"I go to restaurants and supermarkets, who are there? People are buying and travelling. Some group of people are making noise as though the whole country is in trouble,” Tan Sri Irwan Serigar quipped at a press conference yesterday.
We are stunned that the Treasury-General thinks that just because there are people in restaurants and people are still visiting the supermarkets for the daily needs, everything’s fine and dandy with the economy.
Does he expect all Malaysians to be jobless and living in the streets begging for food before he would recognise that the economy is in trouble?
According to him, the plummeting of the ringgit was a short-term phenomenon that would recover in the middle-term following the measures taken by Bank Negara Malaysia (BNM).
However, isn’t that exactly what the Ministers and BNM have been telling Malaysians annually over the past 4 years as the ringgit lost more than 40% of its value against the dollar? How can it still be a short-term problem when we are consistently the worst performer among the major regional currencies for each of the past few years?
Worse, the latest Nikkei Malaysia Purchasing Manager’s Index (PMI) clearly cited that our manufacturing production has been shrinking for 21 consecutive months, with no signs of improvement.
The PMI is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases.
How can Tan Sri Irwan continue to insist that all is well when our manufacturing performance is so pathetic despite the fact that our substantially depreciated currency should have made our goods so much cheaper and competitive?
The biggest shocker from the press conference however, is the fact that he believed that all the negative perception arising from the problems with the economy will be righted and vanished immediately once the media publish his “all is well and good” assurance.
He told the media to contribute to the ringgit appreciation through positive reports about the currency and economy. "Hopefully, when you publish today's briefing, the ringgit will be strengthened," said Tan Sri Irwan.
How we Malaysians can renew our hopes on the economy when we have such a hopeless Treasury-General is beyond me.
Tan Sri Irwan Serigar’s refusal to address and resolve the issues surrounding the tens of billions of ringgit which have been siphoned from the Ministry of Finance subsidiaries, 1MDB and SRC International, which made Malaysia an infamous kleptocratic capital of the world is one thing. After all, he is not the first person you would accuse of “cari makan”.
However, his woeful attempt to wave away our economic misery with his magic wand without recognising the problems we face and without offering any concrete measures to remedy the situation proved beyond doubt that the Najib administration is completely bankrupt of ideas.
In order to have any chance of reviving our currency and economy, the Najib administration must be replaced and there is no better time than the impending general election.
Wednesday, November 02, 2016
Dato’ Seri Najib Razak must explain to Malaysians why he has forsaken all forms of transparency and accountability in awarding the RM55 billion East Coast Rail Link (ECRL) project to a Chinese company
The Treasury-General Tan Sri Dr Irwan Serigar Abdullah had informed the media two days ago that Malaysia and China will sign the Framework Financing Agreement and Engineering, Procurement, Construction (EPC) Contract for the project yesterday.
Dr Irwan spoke to Malaysian media upon arrival in Beijing on Monday as part of the delegation accompanying Prime Minister Najib Razak who is on a six-day visit to the Chinese capital.
He said the railway link will lower transportation costs between the west and east coasts of peninsular Malaysia, bring down prices of goods and reduce travelling time. "It will also will help create more jobs and business opportunities for Malaysians, especially the rural folks," Dr Irwan said.
Malaysians are not disputing or objecting to the ECRL project or its benefits to the nation.
Malaysians are stunned that such a mega-project is being awarded without any form of transparency and competitive tender to ensure that we receive the best value for money.
Worse, the project was originally touted to cost RM30 billion, as opposed to a monstrous RM55 billion as announced in the Finance Minister’s budget speech.
As a measure of comparison, the 329km Ipoh-Padang Besar double-tracking project was awarded to MMC-Gamuda consortium for RM14.5 billion in 2003. More recently in December 2015, the 179km Gemas-Johor Bahru link was awarded to China Railway Engineering Corporation for the sum of RM7.1 billion. On average, the railway projects cost RM44.0 million and RM39.8 million per kilometre respectively.
However, at the cost of RM55 billion, the 600km ECRL will cost a monstrous RM91.7 billion per kilometre to construct. That would mean that the ECRL will cost 108% and 130% more than northern and southern double-tracking projects respectively!
Tan Sri Dr Irwan Serigar tried to preempt questions on the project by claiming that the financing offered by China was a lower rate compared to the international market, coupled with a long repayment period of 20 years.
A favourable financing rate is not a justifiable excuse not to carry out a proper tender exercise. Based on the above information we have, a financing rate that is say, 2% lower than other parties would never justify a 130% increase in the cost of the project!
If Dato’ Seri Najib Razak or Tan Sri Irwan Serigar think it is, then they should be sacked as the Finance Minister and Treasury-General respectively as they have obviously failed their mathematics in primary school.
Malaysians fear that the real reason why the ECRL project is awarded to China at grossly inflated prices is to hide future illegal money flows from the opaque Chinese companies to 1MDB creditors such as International Petroleum Investment Corporation (IPIC) to rescue the state-owned fund. IPIC, in this case, is suing 1MDB for a massive US$6.5 billion.
As exposed by the Sarawak Report earlier in July, we fear that the “excess” from the inflated Chinese contract will be siphoned in a prearranged but illegal manner to bailout 1MDB.
Dr Irwan spoke to Malaysian media upon arrival in Beijing on Monday as part of the delegation accompanying Prime Minister Najib Razak who is on a six-day visit to the Chinese capital.
He said the railway link will lower transportation costs between the west and east coasts of peninsular Malaysia, bring down prices of goods and reduce travelling time. "It will also will help create more jobs and business opportunities for Malaysians, especially the rural folks," Dr Irwan said.
Malaysians are not disputing or objecting to the ECRL project or its benefits to the nation.
Malaysians are stunned that such a mega-project is being awarded without any form of transparency and competitive tender to ensure that we receive the best value for money.
Worse, the project was originally touted to cost RM30 billion, as opposed to a monstrous RM55 billion as announced in the Finance Minister’s budget speech.
As a measure of comparison, the 329km Ipoh-Padang Besar double-tracking project was awarded to MMC-Gamuda consortium for RM14.5 billion in 2003. More recently in December 2015, the 179km Gemas-Johor Bahru link was awarded to China Railway Engineering Corporation for the sum of RM7.1 billion. On average, the railway projects cost RM44.0 million and RM39.8 million per kilometre respectively.
However, at the cost of RM55 billion, the 600km ECRL will cost a monstrous RM91.7 billion per kilometre to construct. That would mean that the ECRL will cost 108% and 130% more than northern and southern double-tracking projects respectively!
Tan Sri Dr Irwan Serigar tried to preempt questions on the project by claiming that the financing offered by China was a lower rate compared to the international market, coupled with a long repayment period of 20 years.
A favourable financing rate is not a justifiable excuse not to carry out a proper tender exercise. Based on the above information we have, a financing rate that is say, 2% lower than other parties would never justify a 130% increase in the cost of the project!
If Dato’ Seri Najib Razak or Tan Sri Irwan Serigar think it is, then they should be sacked as the Finance Minister and Treasury-General respectively as they have obviously failed their mathematics in primary school.
Malaysians fear that the real reason why the ECRL project is awarded to China at grossly inflated prices is to hide future illegal money flows from the opaque Chinese companies to 1MDB creditors such as International Petroleum Investment Corporation (IPIC) to rescue the state-owned fund. IPIC, in this case, is suing 1MDB for a massive US$6.5 billion.
As exposed by the Sarawak Report earlier in July, we fear that the “excess” from the inflated Chinese contract will be siphoned in a prearranged but illegal manner to bailout 1MDB.
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.
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.
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