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

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

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

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

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

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

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

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

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

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

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

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

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

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

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The Malaysian Anti-Corruption Commission needs to grow a spine and really stand up to corruption.

I had asked in Parliament why the MACC had announced in June that it would not be carrying out investigations regarding the misappropriation of funds and abuse of power in the 1MDB scandal.

Tony Pua meminta Perdana Menteri menyatakan apakah sebabnya Ketua Pesuruhjaya Suruhanjaya Pencegah Rasuah Malaysia (SPRM) mengumumkan pada bulan Jun 2017 bahawa pihak SPRM tidak akan menjalankan siasatan ke atas ke penyelewengan dan penyalahgunaan kuasa dalam skandal 1MDB?

The Minister in the Prime Minister’s Department in-charge of Integrity, Datuk Paul Low replied on 1 November that “investigations weren’t carried out because of existing investigations being done by the Public Accounts Committee (PAC), Bank Negara and the Police.”

There could not be a more shameless and irresponsible reply from the Minister and the Government.

The PAC – which barely scratched the surface of the 1MDB scandal, has no prosecutorial powers.  Bank Negara Malaysia, on the other hand, was investigating 1MDB purely from the Financial Services Act and certainly did not deal with the parties who had profited from the scandal. 

At the same time, while the Police may have been investigating the criminal elements in 1MDB, the MACC has powers, laws and jurisdictions which are completely different from the Police to tackle corruption cases.

That was the whole point of the Parliament passing the MACC Act in the first place, so that there is a dedicated and independent commission to tackle the scourge of corruption and not let the burden be shouldered by the Royal Malaysian Police. What type “independent commission” worth its salt is MACC, if it leaves investigations, especially a scandal of such scale to other agencies?

In January this year, MACC commissioner Datuk Dzulkifly Ahmad warned corrupt politicians to “be careful”. He said he wasn’t afraid of protected individuals and would launch investigations without fear or favour. “Just you wait,” he had warned politicians.

Why is the MACC and Datuk Dzulkifly Ahmad, after all its showboating, so afraid of investigating the country’s biggest and most blatant corruption scandal?

Malaysians have been waiting long for MACC to launch its investigations into 1MDB especially after similar investigations have already begun in the US, Switzerland and Singapore. Just this weekend, even 1MDB-linked Prince Turki of Saudi Arabia was hauled up as part of an anti-corruption sweep in his own Kingdom.

In Malaysia, multiple reports have been lodged with the MACC regarding the 1MDB scandal. These included reports filed in December 2014 by then UMNO Batu Kawan Division Deputy Chief Datuk Khairuddin Abu Hassan and more recently, a Pakatan Harapan Youth-linked NGO in July this year.   Hence it is a serious breach of MACC’s duty for failing to look into complaints of corruption.

These submitted reports were to be evaluated before the Commission’s Information Evaluation Committee to determine whether there were elements of corruption or not. If elements of corruption are found, it is imperative that an MACC investigation is opened before being referred to the AG for legal prosecution.

Was the above process conveniently ignored in MACC’s special treatment for 1MDB?  Was this a condition for Datuk Dzulkifly Ahmad to be rapidly promoted to be appointed, less than 2 years ago, to be the Chief Commissioner in the first place?

It is preposterous for an independent commission like MACC to pass on its investigation to other agencies. Each authority has a different mandate to investigate, so it is entirely cowardly for MACC to turn a blind eye and let other agencies look into it.

Until the MACC finally grows a spine and properly considers reports against 1MDB, the commissioner's boastful warnings will remain in Malaysians’ eyes as baseless rhetoric.

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Dato’ Seri Najib Razak is the biggest purveyor of ‘fake news’ by singing 1MDB's praises in his blog but has no courage to debate the mother of all scandals in Parliament

On his blog yesterday, Najib gave us his economic vision for the country ahead of the 2018 Budget announcement on Friday.

However, the entire credibility of his “economic vision” collapsed with the outrageous claim that 1MDB has not only “brought the country good” but “is on track to realise a profit”.

1MDB is currently an empty shell, holding absolutely nothing but some RM40 billion of debts.  How in the world is 1MDB “on track to realise a profit”?!  If this is not a brazen attempt by the Prime Minister to create ‘fake news’, what is?

Dato’ Seri Najib argued that it was 1MDB which solved the lop-sided power purchase agreements attributed to the previous BN Prime Minister.

We are thankful that Dato’ Seri Najib finally admitted that those independent power producers (IPPs) were allowed to profit astronomically from the BN government of which he was part of before.  However, Malaysians are still clueless as to how 1MDB apparently “solved” the above injustice.

As far as we are concerned, Malaysians didn’t enjoy a single sen in benefit as electricity tariffs have only increased and not decreased since 1MDB started acquiring these IPPs.  Worse, the 1MDB’s RM12.1 billion-misadventure in the power sector resulted in multi-billion ringgit losses when it was forced to dispose of its entire energy interests to a China outfit for a mere RM9.3 billion.

Dato’ Seri Najib Razak further told Malaysians to laud 1MDB for its Corporate Social Responsibility (CSR) work including its sponsorship of hajj pilgrimages and scholarships purportedly amounting to RM690 million.

What the Prime Minister failed to tell Malaysians is that the so-called CSR is funded entirely with government-guaranteed debt amounting to more than RM40 billion.

More pertinently, while RM690 million of the debt may have found its way to CSR initiatives, US$732 million or approximately RM3 billion found its way from 1MDB to Dato’ Seri Najib Razak’s personal bank account in Ambank between 2011 to 2014.  The Prime Minister has to date failed to debunk this expose by the US Depart of Justice.

Najib must think Malaysians fools to believe in all his outrageous lies.

If the Prime Minister really thinks that 1MDB has been the saviour of Malaysia, then he should immediately lift the ban on sensitive 1MDB questions raised in the august House.  Instead, he should table a Ministerial Statement to ‘debunk’ all the so-called ‘lies’ by the members of the opposition and allow for a full debate on the 1MDB scandal.

However, if Dato’ Seri Najib Razak chooses not to be accountable in Parliament, then he will prove himself to be the most corrupt and cowardly Prime Minister in the history of Malaysia who relies on the BN-controlled mainstream media to propound his ‘fake news’.

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

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

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

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

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

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

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

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

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

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

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

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

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Did Dato’ Seri Johari Abdul Ghani just blame the Prime Minister for sacrificing US$3.5 billion in 1MDB’s “settlement” with IPIC for “the bigger picture”?

In an exclusive response to Malaysiakini yesterday, Dato’ Seri Johari Abdul Ghani insisted that he has proof that Aabar Investment PJS Limited (“Aabar(BVI)”), an entity incorporated in the British Virgin Islands which 1MDB has already paid US$3.51 billion was a genuine subsidiary of International Petroleum Investment Corporation (IPIC) of Abu Dhabi.

"As far as I am concerned, based on records provided by 1MDB to the Public Accounts Committee (PAC) prior to the settlement agreement, Aabar Investments PJS Ltd (BVI) is a subsidiary of IPIC.  A fact which was confirmed by the Registrar of Corporate Affairs of the British Virgin Islands by its letter dated Aug 11, 2016," he told Malaysiakini.

The question is, if the so-called “proof” is so incontrovertible, then it makes absolutely no sense to concede on a whopping US$3.5 billion or more than RM15 billion based on today’s exchange rates!

Instead of being all gung-ho in being able to win the IPIC-initiated arbitration, the Second Finance Minister said “the matter is beyond [him]” in a subsequent press conference yesterday.  He now made a complete U-turn claiming that the government decided to look after the “bigger picture”.

“At the end of the day, the government felt that they are looking at the bigger picture on this, in terms of the relationship between Malaysian and Abu Dhabi and so on… So I think that’s beyond me. I’m going for the facts, but this is a bigger thing.”

In fact, the Second Finance Minister shifted the blame to the Prime Minister. “The Prime Minister has made the decision for the country. That’s it,” he retorted.

But that’s exactly what Malaysians are worried about – that it’s the tainted Prime Minister who is making the decisions because he is conflicted!

Based on documents revealed by the United States Department of Justice (US DOJ), which were corroborated by the evidence produced by the Singapore prosecution against its rogue bankers, from the funds transferred to Aabar(BVI), Dato’ Seri Najib Razak personally received a sum of US$30 million in his personal bank account in Ambank in 2012.

Worse, his stepson, Riza Aziz received US$238 million via his Red Granite group of companies.  Some US$100 million of the sum was used to produce the Hollywood movie, The Wolf of Wall Street starring Leonardo Dicaprio.

In addition, isn’t Dato’ Seri Johari interested to find out if, despite the incontrovertible “proof” in his possession, that Aabar(BVI) had been fraudulently set up by the officers of IPIC – Khadem Al-Qubaishi and Mohamed Badawy Al-Husseiny, both of whom have been sacked by IPIC – in collusion with 1MDB officers to defraud both the Abu Dhabi and Malaysian governments?

Hence the question must be asked as to whether Dato’ Seri Najib Razak decided to ‘settle’ the IPIC dispute which resulted in US$3.5 billion of additional liability for Malaysians because it is really in the interest of the country or, to prevent IPIC from further exposing and confirming his complicity in the entire 1MDB misappropriation scandal.

Therefore, it is utterly irresponsible of Dato’ Seri Johari to wash his hands off the Ministry of Finance taking on the RM15 billion mega-liability.  Instead of acting ignorant, shouldn’t the Second Finance Minister satisfy himself that the Prime Minister has not made the decision out of self-interest? In reality, was the “bigger picture” a blatant attempt to save Najib and Barisan Nasional from losing in the next General Election?

If the matter is indeed “beyond” him as he pleads, then he might as well resign as the Second Finance Minister.

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Dato’ Seri Johari Abdul Ghani must explain what happened to the US$3.51 billion he had previously insisted had already been paid to IPIC

Last August, Second Finance Minister Dato’ Seri Johari Abdul Ghani said he was very confident that 1Malaysia Development Bhd (1MDB) will win the arbitration in dispute with Abu Dhabi's International Petroleum Investment Company (IPIC), given the documents provided by 1MDB to the minister.

"As far as I'm concerned, I am very confident that we will win (the case), based on the documents that I have, supplied by 1MDB to me," he told reporters after a 2017 Budget focus group meeting.

IPIC had claimed up to US$6.5 billion from 1MDB, including 2 bonds amounting to US$3.5 billion issued by the latter and guaranteed by the former.

Dato’ Seri Johari had insisted that 1MDB has already paid US$3.51 billion to IPIC or its purported subsidiary, Aabar Investment PJS Limited (“Aabar(BVI)”), a company registered in the British Virgin Islands.  IPIC on the other hand, has publicly refuted that Aabar(BVI) is not its subsidiary even though it carries the same name as its own subsidiary, Aabar Investment PJS, a company registered in Abu Dhabi.

1MDB claimed it has already paid Aabar(BVI) the amounts of

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

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

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

"It's too bad for them not to acknowledge that (Aabar BVI), because as far as the record is concerned, the company belongs to them (IPIC).  Now they suddenly say that the company does not belong to them. So we want to see them in court and let the arbitration look at our document," the Second Finance Minister had insisted then.

Even in his open letter to me as recently as last month, Dato’ Seri Johari declared that “as for the dispute regarding the US$3.5 billion, which was paid to the IPIC group of companies by 1MDB, IPIC cannot continually deny that they have received the monies when 1MDB has already paid the same to them. I don't think Malaysians in their right mind will want to just give up on that issue of the payment.”

So the question is, Dato’ Seri Johari Abdul Ghani must now explain why the Malaysian negotiators have “given up” their case against IPIC in their “settlement” announced 2 days ago.

Under the terms of the settlement, despite 1MDB having purportedly paid the US$3.51 billion above to IPIC or its subsidiary, the Ministry of Finance Incorporated (MoF, Inc) has agreed to assume all liabilities arising from the US$3.5 billion of bonds which were previously guaranteed by IPIC.

Given that 1MDB is clearly in no position to pay the debts, Malaysian taxpayers will now have to fork out another US$3.5 billion to bailout 1MDB as part of the above settlement.  This means that we will ultimately pay a whopping total of US$7.01 billion, or more than double the US$3.5 billion of bond borrowings by 1MDB!

What has happened to Dato’ Seri Johari’s gung-ho statement that “we must fight and win this case”?  Why did we capitulate to IPIC’s demands before the fight even began?  Is it because 1MDB has finally conceded that Aabar(BVI) was clearly a fraudulent company to begin with and the US$3.51 billion originally paid has been clearly misappropriated and lost?

More interestingly, just two days before the settlement was announced, he suddenly washes his hands and said he wasn’t “involved in the negotiations. It (is) being done by (the) management and board of 1MDB with PMO’s (Prime Minister’s Office) officers.”

The Second Finance Minister had heroically claimed in his open letter to me that “it would be wholly irresponsible for [him] to shirk off this responsibility and opportunity to serve the nation.”  So may I ask, is agreeing to pay US$7.01 billion for a US$3.5 billion loan the “responsible” thing to do in “serving the nation”?

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1MDB new auditor’s biggest challenge now is to audit and verify the purported sale of 1MDB’s Brazen Sky or its assets to a “undisclosed third party”

The Singapore Straits Times reported that 1MDB is expected to ink an agreement with Abu Dhabi's International Petroleum Investment Co (IPIC) to settle a dispute involving billions of dollars very soon.

In its report, the Singapore daily cited sources as saying the agreement would see 1MDB pay IPIC US$1.2 billion by year end, to settle a loan and accumulated interest from a bailout the IPIC gave 1MDB in July 2015.

It said most of the money would come from the sale of "fund units" from 1MDB subsidiary Brazen Sky to an undisclosed buyer.  Brazen Sky is of particular interest to 1MDB watchers because its account in Singapore's BSI Bank was supposed to be the account used to receive funds from 1MDB's Cayman Islands account.

If the Singapore Straits Times report is to be believed, then 1MDB’s newly appointed auditor, Parker Randall will now be faced with their biggest test to date.  Parker Randall, represented locally by the Malaysian audit firm, “Afrizan Tarmili Khairul Azhar” (aftaas) must carry out the necessary due diligence and audit to ensure that the transactions taking place are bona fide and above board.

Of interest is the fact that until today, 1MDB has failed to provide any form of clarity of these “fund units” worth US$940 million purported redeemed from a Cayman Island investment fund.

1MDB has refused, despite repeated demands from the Public Accounts Committee and the Auditor-General to provide financial statements and documents of 1MDB’s overseas bank accounts and assets, including that of Brazen Sky Limited.

Worse, these assets were purportedly parked in BSI Bank, Singapore which have already had its merchant banking license withdrawn by Monetary Authority of Singapore.  When questioned in Parliament, the Minister of Finance responded that these units were not managed by any fund manager or investment bank, while also refusing to where the “units” have been moved to.

Hence it is critical for Parker Randall or aftaas to confirm the existence and authenticity of the US$940 million worth of “units”.  Most interestingly, despite the fluctuating value of investment assets over time, these fund units appeared to have a frozen value of US$940 million since its redemption in January 2015.

In addition, should Brazen Sky or its assets be sold, Parker Randall must verify that the sale and purchase transaction is a genuine transaction and not another case of paper shuffling which have taken place earlier in 1MDB’s US$1.8 billion investment in Petrosaudi.

It is also important for Parker Randall to confirm and satisfy itself on the identity of the mysterious “undisclosed buyer” of these mysterious Brazen Sky assets as part of its audit verification. The auditors must also trace the money trail of the fund transfers from the mysterious undisclosed buyer into 1MDB before being transferred to IPIC.

The audit is all the more important given the spotlight 1MDB has, which has caused some half a dozen of banks around the world to be shutdown or penalised for facilitating money laundering transactions.

Surely, after Deloitte Malaysia disgracefully resigned from 1MDB for failing to detect any of the above illicit and money laundering activities, Parker Randall do not want to follow the same footsteps and sully its international reputation.

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Did the Second Finance Minister even bother asking the Finance Minister if the latter took money, directly or indirectly from 1MDB and SRC International?

I am disappointed, although not surprised by Dato’ Seri Johari Abdul Ghani’s immediate decline of my invite to speak at my fund-raising dinner.  It would have been perfect opportunity for the Second Finance Minister to convince and implore the voters of Petaling Jaya Utara to not only give 1MDB “a rest”, but even give me “a rest”.

After all, he could have demonstrated his conviction that “the folks of Petaling Jaya Utara elected you as their MP to do better things than just being obsessed with 1MDB”.

He justified his decision to turn down the invite by claiming that "I have to do my job as a minister and I would do the best for the country".

"Even if I had lunch or dinner (with Pua), it would not solve the problem the way he wants, because I am not the Malaysian Anti-Corruption Commission (MACC), Bank Negara Malaysia (BNM), police and investigation agencies. So, let these agencies do their work.  Nowhere in my letter did I mention I want these agencies to stop their investigation," he told Malaysiakini.

Dato’ Seri Johari Abdul Ghani cannot have his cake and eat it too.

He wants to escape the challenge by taking the moral high ground.  He says he wants “to do his job as a minister” and he “would do the best for the country”.

If that is so, now that he is the Second Finance Minister, with all the necessary access to all the documents and transactions within the Finance Ministry subsidiaries – has he figured out why and how 1MDB and its sister company, SRC International lost tens of billions of ringgit?

Has Dato’ Seri Johari even bothered asking the Finance Minister, who also happens to be the Prime Minister, Dato’ Seri Najib Razak, whether he did indeed receive US$731 million in his personal bank account which originated from 1MDB?

Or did Dato’ Seri Johari question Dato’ Seri Najib if he received the RM69 million in his personal bank account which originated from SRC Interntional, as inadvertently exposed by none other than the Attorney-General, Tan Sri Apandi Ali himself?  At the very least, did the Second Finance Minister, in dutifully carrying out his responsibility ask if Dato’ Seri Najib intends to return the RM69 million back to SRC International?

Why should a Second Finance Minister trying to shift his responsibility to “Malaysian Anti-Corruption Commission (MACC), Bank Negara Malaysia (BNM), police and investigation agencies”, when it is also his sworn duty to administer his own Ministry’s subsidiaries?

Isn’t uncovering multi-billion ringgit hanky-panky within his Ministry part of his Minister’s scope of work? Is it because Dato’ Seri Johari not dare to ask because he already knows the answer, but don’t want to rock the boat?

Or is Dato’ Seri Johari taking the position that what has happened in the past, even if it involved billions of ringgit of stolen funds, should be left alone, and his blinkered role is just focus on how to cover up the massive hole which has been created?

Whether the Minister attends my dinner to espouse his position is immaterial.  However, Dato’ Seri Johari’s deeds and actions only goes to show the hypocrisy of his moral high ground and his claims of “doing the best for this country”.  In fact, in his attempt to cover up the stolen funds and keeping the kleptocrats in power without answering for their crimes, he is betraying the country and sacrificing the interest of our future generations.

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Open Letter by Tony Pua, DAP National Publicity Secretary and Member of Parliament for Petaling Jaya Utara to Second Finance Minister, Dato’ Seri Johari Abdul Ghani on Tuesday, 20 March 2017

Dear Minister,

Thank you so much for your Open Letter addressed to me which was issued yesterday.  I am not sure whether I should be honoured to have received such a letter from a Minister for the very first time in my 9 years as a Member of Parliament.

Dato’,

You are extremely unhappy apparently because I called you a “liar” and accused you of “covering up for the Prime Minister”.  I checked my facts again and I’m more than happy to stand by my accusations.

Earlier this year, you told the media repeatedly that the Finance Ministry (MOF) would not take over any of the 1MDB’s debts.  This was a specific response to my question raised in mid-January as to whether the MOF took over 1MDB’s RM800 million loan from SOCSO and RM2.4 billion sukuk.

It was only when I received the convoluted parliamentary reply in the current sitting, I could conclude that MOF did indeed take over these debts.  The sad thing about the reply from the Minister of Finance was that it was clearly written in a way to obfuscate the truth.

You then dug a deeper hole for yourself by arguing that the RM3.2 billion of debt was an “operating debt” belonging to 1MDB’s wholly-owned subsidiary, 1MDB Real Estate (1MDB RE) and hence was not considered as 1MDB’s debt.  I then said that “no Finance Minister worth his salt would argue that the ‘operating debts’ of a wholly-owned subsidiary does not belong to the parent company’s accounting books”.

I also proved with facts published in the Public Accounts Committee (PAC) Report, extracted from the Auditor-General’s (AG) report that more than 87% or RM2.8 billion of the RM3.2 billion of 1MDB RE borrowings never went towards the development of 1MDB’s real estate properties.  Hence I asked why did the MOF not insist that these advances to 1MDB be repaid?

Dato’,

You then went on to tell an audience at a MIDF lunch talk that the Malaysian government couldn’t press charges against 1MDB personalities “without complete information”.  You supported your claim by saying the the Auditor-General and the PAC could not point to anything specifically wrong with 1MDB.

Again, I pointed to specific sections of the PAC Report which clearly concluded that the 1MDB top management has on dozens of occasions – lied and misled the Board of Directors, defied the decisions of the Board or worse, acted without the Board’s authority, all of which are legal offences.  The PAC even asked the authorities to investigate the CEO, Datuk Shahrol Halmi and other officers involved for the above wrongdoings.  However, a year later, Datuk Shahrol Halmi remains comfortably as of today, a Director of PEMANDU agency in the Prime Minister’s Department.

You added in your letter that, “as far as the government is concerned, there is nothing to hide and nothing to cover up.” Then, I ask you, if so, why do you not propose for the Cabinet refusing to declassify the ‘harmless’ Auditor-General’s Report?

However, instead of answering all of the above questions, you ask me to “give it a rest”.

You opined that 1MDB is the most scrutinised entity by all enforcement agencies in Malaysia. However, you fail to also disclose that every single investigating agency was hampered and disrupted.

When the PAC announced that we were summoning Jho Low for questioning, the PAC Chairman was soon replaced by Datuk Hasan Arifin who promptly reversed the decision.  Datuk Hasan, even responded that he has to “cari makan” when asked by the media if the Prime Minister would be summoned.

Despite the diligence of the Auditor-General’s Office, key documents such as 1MDB’s bank statements for its overseas subsidiaries were not handed over to the AG.  Neither did Arul Kanda or Datuk Shahrol hand over many other documents they promised when requested by the PAC.

The biggest farce must be the “Super-Taskforce” investigating 1MDB comprising of the Attorney-General, the Inspector-General of Police, the MACC Chief Commissioner and the Bank Negara Governor  set up by the Prime Minister himself.  Did you forget that just as the then Attorney-General discovered shenanigans relating to the Prime Minister, he was promptly “retired” on spurious ‘health’ reasons?  As if on queue, the new Attorney-General effectively dissolved the “Super-Taskforce” and even went to the extent of instructing the MACC to stop any further investigations on the matter.

Dato’,

You started your letter whining that you are merely working “serve the nation” by taking “positive and proactive” steps.

Perhaps let me gently remind you that there is a difference between ‘serving the nation’ and ‘serving the Prime Minister’, by covering up the scandal so that the truth gets swept under the carpet and the crooks get away scot-free.

Do you not realise that we are now a renown kleptocracy and how damaging that is for our country?  Everyone who has taken an interest in the affairs of Malaysia knows from the documents presented by the United States Department of Justice and the Singapore Courts that US$731 million from 1MDB, found its way through dodgy investment funds and deceptive offshore companies into the personal bank account of Dato’ Seri Najib Razak.

Do you not think that to “serve the nation”, we must work to revive our heavily-tarnished global reputation?  And do you not think that the only way we can remove the kleptocracy label from Malaysia is not by sweeping the truth under the carpet but instead ensure that the kleptocrats are charged and appropriately punished?

In fact, if you really want to take “positive and proactive steps” to help the nation, why haven’t you made a claim for the US$1 billion worth of assets being seized by the United States which were acquired with funds laundered and stolen from 1MDB?  Why is the Government still keeping up the pretences that 1MDB did not lose these billions of dollars?

Dear Minister,

The above are just some of the many reasons why I won’t give the 1MDB issue a rest.  The issue doesn’t deserve to be rested because you and your fellow Ministers have refused to answer simple questions and more importantly, the crooks who audaciously misappropriated more than US$5 billion are still at large.

Any elected representative with any sense of morality and integrity, who believes in protecting the interest of the man-on-the-street and who wants justice meted out to criminals who rob the country will never let the matter rest until the truth is found.

I am sure that my voters in Petaling Jaya Utara and all right-thinking Malaysians would overwhelmingly back my dogged persistence and relentless pursuit to ensure that Malaysia’s corrupt leaders and its kleptocratic government are made accountable for their crimes.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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There’s nothing personal about a Tun Dr Mahathir – Dato’ Seri Nazri Aziz 1MDB Debate

A public spat between former Prime Minister, Tun Dr Mahathir Mohamad and the Minister of Tourism, Dato’ Seri Nazri Aziz has led to a 1MDB debate challenge which has been duly accepted by the latter.

The Tourism Minister even took a dig at his colleague, EPU Minister, Dato’ Seri Abdul Rahman Dahlan, who withdrew at the last minute after agreeing to a highly anticipated debate with the Penang Chief Minister, Lim Guan Eng.

Dato’ Seri Nazri said he would not budge. "Why should I? I am Nazri Aziz, you should know me better, I am not Rahman Dahlan," he told Malaysiakini when contacted.

The Minister’s bravado has apparently put the Najib Cabinet in a panic mode as the debate on 1MDB has been a subject matter which they have taken great pains to hide and cover up.

Even 1MDB CEO, Arul Kanda withdrew from a debate with me last year, after accepting a similar challenge with much bravado – holding a press conference in a hotel to say “Bring it on!”

They are so worried about the negative fallout for the Najib administration that Finance Minister II, Dato’ Seri Johari Abdul Ghani had to declare that the proposed debate between Tun Dr Mahathir and Dato’ Seri Nazri had “nothing to do” with the Government.

How ridiculous is it for the Finance Minister II to claim that the RM50 billion corruption scandal has “nothing to do” with the Government?

The 1MDB debate has everything to do with the Government, and in particular the Prime Minister, Dato’ Seri Najib Razak.  The latter, who is also Finance Minister I, has been found to have received US$731 million which had originated from 1MDB based on the documents and evidence produced by the United States Department of Justice (US DOJ).  The 1MDB scandal has made Malaysia the kleptocratic capital of the world and put Malaysians to shame.

In fact, it is shocking that to date, since the US DOJ filed the suit to seize assets acquired with money laundered from 1MDB in July 2016, Dato’ Seri Najib Razak has not once denied the allegations that he has received the US$731 million misappropriated from 1MDB.

Dato’ Seri Johari Abdul Ghani tried to argue that the matter had purportedly already been “debated extensively in Parliament”.

He told the reporters that “the report that (was) prepared by the auditor general, (the) public accounts committee (PAC), have been deliberated extensively in Parliament, all questions have been answered in Parliament.”

However, the Finance Minister II failed to also clarify that the Parliament Speaker has forbidden any answers on questions relating to the 1MDB US DOJ suit, preposterously claiming “subjudice”.  At the same time, the then newly appointed PAC Chairman, Dato’ Hasan Arifin took pains to unilaterally make amendments to the PAC Report and refused any attempts during the meetings to investigate links between the scandal and the Prime Minister.  Worse, if all questions on 1MDB has allegedly been answered, then why is the Cabinet hiding the Auditor-General’s Report under the Official Secrets Act (OSA)?

Even the Finance Minister II himself failed to answer questions raised in Parliament on the scandal during the last sitting.

Hence with the utter failure of the Parliament, the next best thing Malaysians can hope for to gain the truth is via a debate. And one between the former premier and one of the harshest critic of the Najib administration, versus one of the most senior Minister’s in Najib’s cabinet could not have come at a better time.

In fact, if the Government has nothing to hide, we call upon the Cabinet to insist that the debate be broadcast live on RTM or TV3, for there could not be a better opportunity for the Najib administration to destroy the opposition’s allegations on 1MDB and clear its tainted reputation.

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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.

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New exposés during Singapore trial revealed how SRC International had similarly misappropriated funds using the same dubious investment funds as 1MDB

Malaysians are now thoroughly familiar with how 1MDB has misappropriated some US$7 billion of investment funds, of which approximately US$731 million has ended up in the Prime Minister’s personal bank account at Ambank, as exposed by the US Department of Justice (DOJ).

One of the key modus operandi which was used by 1MDB to launder the funds was to first move the money into seemingly legitimate investment funds. Subsequently, these funds will then pass through the money to special purpose vehicles created by Jho Low and his associates to be utilised or further disbursed to third parties.

For example, the 2013 and 2014 financial statements of 1MDB which were previously audited by Deloitte Malaysia, showed that nearly US$1.6 billion were invested in overseas funds without the provision of any details.

From the US DOJ filings, we now know that 1MDB, via its subsidiary, 1MDB Global Investment Limited, had in 2013 invested the funds with Devonshire Growth Fund (US$646 mil), Enterprise Emerging Markets Fund (US$415 mil) and Cistenique Investment Fund (US$531 mil).  From these funds, a total of US$1.265 mil was transferred to two British Virgin Islands incorporated companies, Tanore Finance Corporation and Granton Property Holdings, owned by Eric Tan Kim Loong, an associate of Jho Low.  From Tanore, US$681 million was transferred to Dato’ Seri Najib Razak.

For SRC International which was funded with RM4 billion from Kumpulan Wang Amanah Persaraan (KWAP), the March 2014 financial statements audited by Deloitte Malaysia had disclosed a whopping sum of RM3.81 billion categorised as “investment portfolio outside Malaysia”.

Other than a US$60 million failed investment in Mongolia’s Gobi Coal and Energy Ltd which we have discovered via past parliamentary replies, Malaysians have been left in the dark as to where and what exactly these funds have been invested in.

Malaysians’ worst fears were realised when the Switzerland Attorney-General issued a public statement on 5 October 2016 that “the sum of US$800 million appears to have been misappropriated from investments in natural resources made by the SRC sovereign fund.”

“Secondly, it is suspected that a ‘Ponzi’ scheme fraud (i.e. paying the returns on initial investments from funds obtained from subsequent investors rather than from legitimate revenue from the investments) was committed to conceal the misappropriations from both the SRC fund and from 1MDB,” he further disclosed.

Last week, we have received confirmation from the Singapore courts where the trial of former BSI banker, Yeo Jiawei was being held, the money from SRC International have been launder throught the same vehicles used to mask the transfer of the 1MDB investment funds above.

Testifying at his own trial, Yeo said the scheme devised was for SRC International, to invest in a fiduciary fund called Enterprise Emerging Market Fund (EEMF) in 2011.  This is the same exact fund which was used by 1MDB to misappropriate US$415 million as mentioned above.

He explained that a fiduciary fund was one where the client, in this case SRC, will direct the manager of the fund on what to do with the money invested.

He also informed the court that SRC asked that EEMF extend a loan of US$100 million to a company called Blackstone Asia Real Estate Partners whose beneficiary owner is Eric Tan Kim Loong, like Tanore and Granton.  He further disclosed SRC then gave an indemnity that shielded BSI from responsibility should all the money be lost.

The revelations at the Singapore courts are explosive.  They not only lend credence to the suspicions and allegations that the RM3.81 billion “investments in overseas portfolios” in SRC International have effectively all been siphoned away, just like what has happened in 1MDB; they exposed the fact that these “investment funds” like EEMF received direct instructions from SRC as to how the funds are used and provided an indemnity to the relevant parties.

It above has proven firstly that EEMF, Devonshire and Cistenique investment funds are sham investments which 1MDB and SRC has participated in, secondly and more damagingly, that SRC directly given instructions for the funds to be siphoned to vehicles such as Blackstone.

We call on the Minister of Finance to come clean with the transactions which have taken place in SRC International.  We also call upon the authorities – the Police, the MACC and Bank Negara Malaysia to carry out full investigations, particularly on the Directors an Management of the company for the crimes of theft, criminal breach of trust and money-laundering.

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Bank Negara’s inaction and reticence, in stark contrast with Singaporean authorities' actions to protect the integrity of their banking system, abets the indictment of Malaysia as a global kleptocracy

I had on 31 October asked the Minister of Finance to state the actions taken by Bank Negara over the conduct of Ambank bankers, Joanne Yu and Cheah Tek Kuang for covering up money laundering transactions relating to the 1MDB.

The question was raised because The Wall Street Journal (WSJ) had on 6 September 2016 made very specific allegations against Ambank Malaysia and its officials of facilitating and abetting money-laundering when billions of ringgit was transferred into the bank accounts of Dato’ Seri Najib Razak.

In making the allegations, the prestigious financial paper substantiated the claims with private conversations between senior Ambank officials with Low Taek Jho, who was carrying out the transactions on behalf of the Prime Minister.

The Prime Minister had given Low access to his accounts, according to investigative documents sighted by WSJ. His primary contact at AmBank was Joanna Yu, the banker he had warned via BlackBerry to communicate discreetly. Cheah Tek Kuang, a senior AmBank executive and adviser to the bank’s chairman, handled the account personally, the BlackBerry messages indicate.

According to WSJ, Low sent hampers of food to Yu and lunched with her at noodle shops, according to the phone messages. He kept reinforcing the need for secrecy: “v v important no one should know in ambank besides u or cheah or get hold of statement,” one message said. “Cause if it gets on internet where funds were from then headache.”

Yu even made recommendations on which US correspondent bank – Wells Fargo or JP Morgan will raise less questions involving the transfers.

These messages clearly indicated a conspiracy by the above parties to at best, hide the transactions from scrutiny, and at worst, blatant masking of the illicit transactions as legitimate ones.

In his written reply, Dato’ Seri Najib Razak appeared to confirm the above allegations when he said that “Bank Negara has undertaken investigations on financial institutions relating to 1MDB under Financial Services Act 2013, Islamic Financial Services Act 2013, and Anti Money Laundering Act 2001… Based on the investigation results, enforcement actions have been duly executed by Bank Negara with the power provided to it under the law.”

However, we were never informed of what actions have been taken against Ambank or the bankers who have facilitated these illicit transactions.  In fact, as far as we are aware, both Joanne Yu and Cheah Tek Kuang are free men.

Cheah Tek Kuang who was the Group Managing Director of Ambank until his retirement in 2012 remains an advisor to the Chairman’s Office the Bank according to publicly available records.  He is also the Chairman of Berjaya Sports Toto and an Independent Director at IOI Group.

If Bank Negara has indeed taken action against him for abetting money laundering offences, can he still be Chairman and Director of publicly listed companies?

Bank Negara’s absence of any visible actions against Banks and its officers who were complicit in money laundering offences is in stark contrast with the actions taken by the Singapore authorities to defend the integrity of their banking system.

Former private banker Yak Yew Chee, who dealt with Jho Low and 1MDB has been jailed 18 weeks and fined S$24,000 for forging reference letters vouching for the Low family and for failing to report suspicious transactions involving tens of millions of dollars coursing through BSI bank in Singapore.  Yak will also surrender S$7.5 million to the State “to demonstrate his genuine contrition”.

Another former private banker with the Swiss BSI Bank, Yeo Jiawei is currently on trial over four charges for perverting the course of justice and another seven counts for money laundering, cheating and forgery over the same Jho Low and 1MDB-related scandal.

Unfortunately, the new Governor of Bank Negara Malaysia, Datuk Muhammad Ibrahim’s silence and reticence in tackling the above money laundering scandal will only serve to enhance Malaysia’s reputation as global kleptocracy.

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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.

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Has Malaysia become the new rogue nation of this world?

Malaysia has always prided itself to be a progressive nation which built its foundations the principles of justice and moderation.  Even before our own independence, we have always been on the on the right side of history, fighting the Axis powers during the World War II and was part of the coalition to halt the rise of communism in Southeast Asia.

Even during the worst of times during the Mahathir’s era of an authoritarian regime, we have never been regarded as a basket case like Cambodia, Burma, Iraq or God-forbid, North Korea.

Our leaders have been reasonably well-educated and speak with the right tones to ingratiate ourselves well in a world led by the United States, Europe and Japan.  Even our current Prime Minister, Dato’ Seri Najib Razak had tried extremely hard to be part of international elite fraternity with his constant, albeit rhetorical preaching of the “global movement of moderates”.

Who can forget, how hard our Prime Minister tried to be buddies with President Obama and how proud he was when he had the rare opportunity to have a round of golf with the American President in Hawaii not too long ago in December 2014?

How quickly things have changed in less than 2 years.

In July this year, the United States Department of Justice (DOJ) has labelled Malaysia a kleptocracy, with the single largest seizure of assets purchased with funds laundered in the United States which were misappropriated from 1MDB.  While Dato’ Seri Najib Razak was not an owner of the assets to be seized, the DOJ explicitly disclosed that he received US$731 million of these misappropriated funds in his personal bank account in Malaysia.

Despite the severity of the accusation by the US Attorney-General, Dato' Seri Najib has refused to deny the allegations and has chosen to remain silent.

Instead today, Dato’ Seri Najib Razak has decided that it is now in his best interest to pucker up to mighty China.  After all, China doesn’t pass judgement on who they deal with, regardless of whether it’s a rogue nation like North Korea or a Western counterpart like United States.  China’s investments for influence policy reaches out far and wide to third world countries all around the world, especially in Africa like, Nigeria, Sudan and Angola.

After the much-hyped promise of Middle-Eastern petrodollars-led investment boom in Malaysia failed to materialise, the Prime Minister is turning to Beijing to not only jumpstart our economy, but also to help him clean up his multi-billion dollar 1MDB mess.

It is one thing eschewing open tenders for mega-projects in the past to local Malaysian cronies of the ruling parties.  Now, the Prime Minister has decided that we should eschew open tenders and award mega-projects at inflated prices like the RM55 billion East Coast Rail Link to Chinese state-owned companies without any tender, or even the pretence of one.

Dato’ Seri Najib has decided to award of the above project to China Communications Construction Company Limited at a price more than double the price per kilometer of rail ever awarded in Malaysia with borrowings from China’s Export-Import Bank.  It is a clear attempt to siphon cash to payoff 1MDB’s outstanding debts, especially those embroiled with Abu Dhabi’s International Petroleum Investment Corporation.

In exchange, Dato’ Seri Najib yields to Chinese geo-political and economic supremacy.  When the United Nations Arbitral Tribunal ruled that “there was no legal basis for China to claim historic rights to resources within the sea areas falling within the ‘nine-dash line” in South China Sea, Malaysia has strangely refused to endorse the ruling despite the fact that we are ourselves laying claims on parts of the Spratlys archipelago in the area.

Worse, Malaysia together with Cambodia, has frustrated the attempts by ASEAN nations to recognise the ruling which had resulted in a meaningless water-down statement with regards to the disputes in South China Sea.

Yesterday, as if to hammer the nail into the coffin, the Prime Minister wrote in his special column in China Daily chastising the West including the “former colonial powers”, that “it is not for them to lecture countries they once exploited on how to conduct their own internal affairs today.”

It is a not so subtle statement to tell these Western powers that how Malaysia is a kleptocracy today isn’t any of their business.  If they are not happy with him, he is more than happy to embrace China, who couldn’t care less about how the Malaysian government leaders plunder the nation.

Dato’ Seri Najib Razak’s stand has much bigger implications to Malaysia than merely an attempt to play off one Superpower against another.  The Prime Minister’s brazen foreign policy switch will lead Malaysia, intentionally or inadvertently, down the road of becoming a rogue nation, globally snubbed and internationally derided.

As basket cases like Burma, Vietnam or even Iran redeems themselves with greater rapprochement with the international communities, it is frightening that a Prime Minister, consumed with the need to save himself is taking actions which will lead us down the slippery slope.

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Is Dato’ Seri Najib Razak’s strategy to deal with Malaysia’s entrenching reputation as a global kleptocracy to remain silent like a mouse?

Malaysians have been demanding answers from Dato' Seri Najib Razak on the 1MDB-related scandal, that is the RM4 billion SRC International, which is the former subsidiary of 1MDB.  Similar to 1MDB, the money which was borrowed from KWAP has been invested in mysterious and unknown funds overseas.  No one, including anyone from the Ministry of Finance (MOF) knows where the money has disappeared to.

The Prime Minister and the Attorney-General have also stubbornly refused to respond to the clear-cut evidence which have shown that SRC International has transferred, via intermediaries, at least RM67 million into the personal bank account of Dato' Seri Najib Razak.

However, it appears that Dato' Seri Najib cannot remain silent forever as, like 1MDB, the international authorities are catching up to the SRC International laundering scams.

The Swiss Attorney-General Office (OAG) has publicly stated that investigations revealed that substantial amounts of money were allegedly misappropriated from former 1MDB subsidiary SRC International and that fraud was committed based on a form of “Ponzi” scheme to cover it up.

Dato' Seri Najib Razak can no longer choose to remain silent in the face of another international investigation over funds which he controls.  He must come forward and disclose if the allegations made by the Swiss authorities are frivolous or are they substantive, which will require an open and thorough investigation in Malaysia.

In addition, Dato' Seri Najib Razak must state if he will provide full cooperation with the Swiss authorities who are demanding and requiring information from their counterparts in Malaysia.  Or is he going to merely pay lip service and ignore the requests?

At least in 1MDB, for the longest time, there were "faces" who responded to questions and queries, like Datuk Shahrol Halmi and Arul Kanda.

The question Malaysians have is, who is or are running the show in SRC International?  As far as we are aware, the Managing Director of SRC International, Nik Faisal Ariff Kamil has disappeared off the face of Malaysia together with another fellow Director, Datuk Suboh Yassin.  And yet despite their disappearance, they have remained Directors in SRC International over the past year or more.  In fact, when asked, the Prime Minister had responded in Parliament that there is no need at all to appoint new Directors or a new management team.

It is a testament to the failure of Malaysian institutions, entrusted to safeguard the people's money as well as law and order, that nothing concrete has been done to uncover another massive embezzlement of RM4 billion of funds from a state-owned subsidiary.  What have the police, Bank Negara Malaysia, MACC or the Attorney-General's office been doing?  Have they been closing both eyes because the scandal involved the Prime Minister himself?

If Dato' Seri Najib Razak believes that the Swiss allegations are frivolous and untrue, then he should immediately demand the Auditor-General commence a new report specifically on SRC International and table the report to Parliament.  If not, there is no longer any credibility to his administration which will be etched in history as the single biggest den of thieves.

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The Police’s ring-fenced investigations into 1MDB points to scapegoating former Director and CEO Datuk Shahrol Halmi for the multi-billion dollar scandal

The Inspector General of Police (IGP) Tan Sri Khalid Abu Bakar disclosed on Friday that the police have completed the first phase of their investigation into 1MDB, which is restricted to the five recommendations by the Public Accounts Committee (PAC) as ordered by the cabinet.

As pointed by DAP Parliamentary Leader, the “five recommendations” by the PAC has nothing to do with police investigations as they relate to corporate reorganisation of the heavily indebted company.  For example, the PAC recommended that the 1MDB Board of Advisors be dissolved, that the Ministry of Finance assumes ownership of the property assets under the company and that 1MDB “should avoid excessive debt”.

The only request by the PAC in its report, which was not part of the five recommendations, was for 1MDB’s former Director and Chief Executive Officer, Datuk Shahrol Halmi and others who were involved to be investigated by the authorities.

This leads Malaysians to believe that the ring-fence imposed by the Cabinet and willingly accepted by the IGP, is nothing more than a strategy to place the entire blame for the multi-billion dollar scam on the shoulders of Datuk Shahrol Halmi.

It clearly appears that Datuk Shahrol will be made a scapegoat to ease the pressure on the Prime Minister, Dato’ Seri Najib Razak who has failed to take any concrete action at all against any party for the losses suffered in what the UK Guardian named as the “world’s largest financial scandal”.

The powers that be would certainly hope that with Datuk Shahrol’s incarceration, a mere pawn in the wider scheme of things, they would be able to wash their hands off the scandal and close the lid on the ugliest chapter of Malaysia’s history.

However, by doing so, the Police would once again make complete fools of themselves, no different from the Altantuya murder scandal in 2006.  Chief Inspector Azilah Hadri, and Corporal Sirul Azhar Umar who were members of the elite Unit Tindakan Khas assigned to the office of the then Deputy Prime Minister Dato’ Najib Razak, were found guilty of murdering the Mongolian woman.  However, no motive was ever presented by the police and the prosecution, or found by the Malaysian Courts when they were condemned to death sentences.

In 1MDB’s case, if only Datuk Shahrol were to be charged and found guilty, the similar question could be asked – what motive is there for Datuk Shahrol to carry out the multi-billion dollar global embezzlement exercise?

Datuk Shahrol, who was referred to as “1MDB Officer 2” in the US Department of Justice suit to seize US$1 billion of laundered 1MDB assets, was never disclosed as an individual beneficiary of the stolen funds.

The beneficiaries of the loot were Low Taek Jho, Riza Aziz, Khadem Al-Qubaisi and Mohammad Badawy Al-Husseiny.  In addition, a “Malaysian Official 1” who could only refer to Dato’ Seri Najib Razak, received a whopping US$731 million from the embezzled proceeds.

I have no doubt that Datuk Shahrol is guilty of participating and facilitating in the massive scam to defraud ordinary Malaysians and should be charged for abetting the heinous crime.  However, he is but a cog in the wheel of the 1MDB scandal.  It will be the greatest travesty of justice, similar to the Altantuya murder, where the real conspirators and crooks who had benefited immensely from the crimes are let of scot free.

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Has the PM’s Department decided to award the East Coast Rail Link to China Communications Construction Company (CCCC) for an inflated cost of RM60 billion without any tender?

The Sarawak Report has exposed new documents which alleged that the Malaysian Government is in the midst of finalising a new contract to award China Communications Construction Company (CCCC) for a whopping sum of RM60 billion.  The East Coast Economic Region Development Council had previously expected the cost of the project to be ‘only’ RM30 billion.

Malaysians are taken aback by the speculated cost for the project and cannot be blamed for giving Sarawak Report the benefit of the doubt because the whistle-blower website has been proven right time and again, especially with regards to its reporting of the multi-billion dollar 1MDB scandal.

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 RM60 billion, the 620km ECRL will cost a monstrous RM96.8 billion per kilometre to construct.  That would mean that the ECRL will cost 120% and 143% more than northern and southern double-tracking projects respectively!

The massively inflated alleged cost of the ECRL without a tender exercise lends credence to the Sarawak Report documents which detailed how the “excess” was to bailout the debt-stricken 1MDB.

The documents reveal that CCCC, upon the award of the inflated contract, will via a nominated “credit-worthy” company pay 1MDB the sum of US$850 million (RM3.4bn) for the purposes of repayment for International Petroleum Investment Corporation (IPIC) advances, and assume the debt of 1MDB subsidiaries amounting to US$4.78 billion (RM19.4bn) inclusive of interest which had been guaranteed by IPIC.

These payments are clearly meant to go towards the settlement with IPIC which has taken 1MDB to the London arbitration court for the amount of US$6.5 billion.

More interestingly, part of the sum from the inflated cost will go towards acquiring substantial stakes in fugitive Low Taek Jho-linked companies, Putrajaya Perdana Bhd and Loh & Loh Corporation Bhd for US$244 million and US$71 million respectively.

In addition, there is a proposed payment by CCCC to a “consultancy/strategic/comms services” company and another “nominated company” for the amounts of US$65 million and US$200 million respectively.  The payment for the unnamed mysterious “nominated company” was to be made upon the official signing of the ECRL contract expected in December this year.  Hence, it appears that even in the exercise of a desperate bailout, generous commissions will be paid to certain parties, perhaps to continue their lifestyles of luxury and debauchery.

In effect, the Najib administration is merely ECRL as an excuse and an outrageous cover up to mask additional borrowings of RM30 billion in order to repay the billions embezzled from 1MDB.  Most tragically, it means that ordinary Malaysians as the Government will finance the entire ECRL project with more crippling debt.  We are merely covering up a gigantic hole by digging ourselves an even bigger hole.

We call upon Dato’ Seri Najib Razak to confirm or deny that the award of the contract to CCCC is in the works, and provide transparent and accountable justifications for the award in the absence of any competitive tender exercise.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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