Current Bandar Malaysia RFP likely to suffer same fate as its failed sale to Iskandar Waterfront Holdings and subsequent imaginary sale to Dalian Wanda Group

In my parliamentary question on 8 November I had asked the Ministry of Finance (MoF) for a simple update on the progress of Bandar Malaysia’s search for a new master developer.

Tony Pua minta Menteri Kewangan menyatakan berapa syarikat telah menyerahkan cadangan muktamad dalam tender semula projek Bandar Malaysia. Berapa antaranya adalah syarikat Fortune 500 dan bilakah keputusan tender tersebut akan diumumkan?

The new tender process for Bandar Malaysia’s developer comes following the spectacular collapse of the RM7.41 billion deal with the Iskandar Waterfront Holdings (IWH)-led consortium to acquire a 60% stake in Bandar Malaysia in May 2017.

Following that was another dramatic public relations disaster when the Prime Minister, Dato’ Seri Najib Razak failed to seal an improved multi-billion dollar Bandar Malaysia deal with China’s Dalian Wanda Group.

In attempt to save face and salvage the project, Bandar Malaysia’s owner, the MoF, launched a new request for proposals (RFP) to collect bids for a new master developer for the project.

The new RFP also included more stringent criteria including that the developer needed to be an affiliate of a Fortune 500 company and must have cumulatively generated RM50 billion in revenue in the last 3 consecutive years.

In the Finance Minister’s answer to my question, he only restated information which were already made known to the press for months. He said that the RFP process had been completed and listed out the same criteria that had been said before. He added that 8 companies had met these criteria and that a final decision will be announced soon.

The reply shows that all is clearly not going to plans with the re-bidding process of Bandar Malaysia.

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.

The RFP was finally launched on July 5, with a deadline on July 20.  The Singapore Straits Times had reported on July 25 that 7 Chinese state-controlled entities and two Japanese firms were in competition for the project. They included China State Construction Engineering Co Ltd, China Communications Construction Company (CCCC) from China and Daiwa House Industry Group and Mitsui Fudosan Co Ltd from Japan.

Then on August 23, Tan Sri Irwan Serigar updated Malaysians with his announcement that “6 companies have shown interest and visited the Bandar Malaysia project site”.

“We took them for a site visit and they need to submit their proposal by the end of this month,” he said.  However, Irwan said the government does not know how many companies, out of the six, will actually submit their proposals based on the RFP for the project.

Now, it is now 4 months after the RFP was announced and we have had no further updates as to who might become the master developer for the Bandar Malaysia.  All we have from the media and parliamentary responses is there are 6 to 8 companies who were perhaps interested in the project.

The delay and inconsistent announcements made however, points to a simple conclusion.  The Bandar Malaysia is no nearer to finding a new suitor than it did when it terminated the failed agreement with the IWH-led consortium.  The so-called interested parties were either not that interested, or were not willing to offer anything close to MoF’s over-priced valuation of Bandar Malaysia.

The MoF should stop daydreaming and start getting real.  The previous Bandar Malaysia “open tender” resulted only with the IWH-consortium winning the bid but failing to secure the necessary financing for the valuation to complete the transaction.   It follows to ask why would any global company in the right mind, offer anything more for Bandar Malaysia especially when they also know that MoF is rather desperate to make the sale?

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Is Treasurer-General and 1MDB Chairman, Tan Sri Irwan Serigar aware of a third ‘secret’ Letter of Support for 1MDB’s US$975 million borrowing from a Deutsche Bank-led consortium in September 2014?

The latest suit filed by the United States Department of Justice (US DOJ) last month exposed a new allegation Dato’ Seri Najib Razak signed a ‘secret’ Letter of Support for 1MDB to secure a US$975 million loan from a Deutsche Bank-led consortium in September 2014.

The US DOJ suit stated that Dato’ Seri Najib Razak, referred to as “Malaysian Official 1 (MO1)”, “on behalf of the Government of Malaysia, provided a Letter of Support to Deutsche Bank in connection with the $975 million loan.”

This would have been a third Letter of Support issued by Dato’ Seri Najib Razak as the Finance Minister to effectively guarantee borrowings by 1MDB.  The letters had stated that “in the event 1MDB… fails to provide the required funds, Malaysia shall then step in to inject the necessary capital into the Issuer or make payments to ensure the Issuer’s obligations are fully met”.

The DOJ suit further noted that “internal Deutsche Bank records reflect that 1MDB officials opted to provide a Letter of Support signed by MALAYSIAN OFFICIAL 1, rather than some form of guarantee by 1MDB… at least in part because a letter of support did not require Bank Negara or Cabinet approval. At the request of 1MDB, all references to the Letter of Support were removed from the Facility Agreement.” 

I had submitted a question to the Finance Minister to confirm the existence of the letter in the current parliamentary sitting.  However, the question has been inexplicably rejected by the Speaker on the ultra-flimsy grounds of presumably questionable assumptions (“sangkaan”).

I had last week issued a statement via a press conference seeking answers from Dato’ Seri Najib Razak himself as to whether he had indeed issued this “secret” Letter of Support and whether he had the authorisation from the Cabinet and Ministry of Finance to do so.

However, the questions posed have been met with utter silence, whether from the Prime Minister himself or from his Cabinet cheerleaders.

I can fully understand why the Prime Minister might want to remain absolutely silent so as not to incriminate himself with any answers he may provide.

Hence, I now pose the same questions to the Treasurer-General of the Ministry of Finance, Tan Sri Irwan Serigar who has also been appointed as the Chairman of 1MDB just a year ago.

As the Treasurer-General of Finance Ministry, is Tan Sri Irwan Serigar aware that the Minister of Finance had signed a third Letter of Support for 1MDB in September 2014?  The official reply provided by the Minister of Finance in March 2016 stated that there were only 2 such Letters of Support issued in March 2013 for US$3 billion and another in March 2015 for US$150 million.

Was the reply which would have been prepared and approved by the Treasurer-General mistaken? Or was he, horrors of horrors, completely unaware that a third ‘secret’ Letter of Support had actually been issued by the Finance Minister, Dato’ Seri Najib Razak.

Secondly, even if he was not previously aware of the ‘secret’ letter, Tan Sri Irwan Serigar, as the Treasurer-General and 1MDB Chairman, must surely investigate.  Has he called Duetsche Bank to verify the existence of the Letter of Support as alleged by the US DOJ?

If Tan Sri Irwan fails to do the simple task of calling up the Bank to confirm this information, then he has betrayed the trust of Malaysian tax-payers as the most senior financial civil servant in the country today.

If he is unable to protect the financial interest of the 30 million Malaysians in the country, then he is completely unfit to continue in his position, both as the Treasurer-General and the 1MDB Chairman.

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Tan Sri Irwan Serigar, as both the Treasurer-General and 1-year old Chairman of 1MDB must investigate and explain the scandalous misappropriations exposed by the US DOJ

The updated second asset seizure suit filed by the United States Department of Justice (US DOJ) under the Kleptocracy Asset Recovery Initiative contained even more outrageous exposés on how 1MDB funds have been misappropriated to those who are in power as well as their associates.

Besides hundreds of millions more in the acquisition of luxury properties around the world and prized art masterpieces, the US DOJ is seizing The Equanimity, one of the most luxurious ships in the world costing more than USD250 million belonging to Jho Low.

Even more scandalous was more than USD200 million spent on precious jewelry including more than USD30 million for a rare pink diamond necklace for Datin Seri Rosmah Mansor.

Besides some of the juiciest scandalous details befitting tabloid headlines around the world, the DOJ also took pains to elaborate how the funds exceeding USD5.6 billion have been laundered by 1MDB officials, Jho Low and his associates.

The previous DOJ suit in July last year has already outlined how USD1.83 billion invested with Petrosaudi International, USD1.367 billion paid to a fraudulent British Virgin Islands incorporated Aabar Investments and US$1.56 billion from 1MDB Global Investment Limited transferred to bogus investment funds, were laundered.

The updated suit published for the first time how an additional USD855 million borrowed from Deutsche Bank was raised and laundered in 2014 via another fraudulent Aabar Investments incorporated in Seychelles.

The exposé which reads like a Robert Ludlum political thriller, detailed how 1MDB managed forged documents including audited financial statements, created multiple version of agreements for the very same transactions, lied to financial officers and authorities and outrageously pledged worthless securities as collateral to secure its US$975 million loan from the Deutsche Bank-led consortium.

Tan Sri Irwan Serigar was only appointed as the Chairman of 1MDB last year to replace disgraced Board of Directors who resigned en-mass. He was not involved with any of the above shenanigans. He, who is also the Treasurer-General, the most senior Finance Ministry official in the country, must take the bull by the horns and uncover all the skeletons in the closet.

The 1MDB management was quick to dismiss the US DOJ allegations as “not backed by evidence”.  Surely, as a most experience civil servant, Tan Sri Irwan Serigar would not take the management denials at face value, especially in the face of such a detailed exposé of how the 1MDB funds were siphoned.

All it takes is for Tan Sri Irwan Serigar to call for an emergency 1MDB board meeting and demand for the relevant bank statements to be presented to discover if the US DOJ was only exposing the truth or they have been misled by all the international banks in the world who cooperated with the investigations.

Will Tan Sri Irwan Serigar do the right and honourable thing for the sake of Malaysian tax-payers, whose money he has been entrusted to manage?  Or will he succumb to the very reason why the previous Chairman and Board had to resign in disgrace, the failure to perform their fiduciary duties to keep a rogue management in check, to prevent fraud and abuse, especially to the scale of tens of billions of ringgit.

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