Tuesday, May 26, 2015

The Mystery of SRC International's Missing RM3.81 Billion

If Bank Negara Malaysia (BNM_) has already received the investigation report from Monetary Authority of Singapore (MAS), why haven’t there been any action taken at all?

The Minister of Finance has responded to my question with regards to SRC International’s investment in Gobi Coal & Energy Limited on 20 May 2015.

"Jumlah pelaburan SRC Interntional Sdn Bhd dalam syarikat Gobi Coal & Energy Ltd (GCE) adalah sebanyak USD60 juta yang mewakili 9% pegangan saham dalam GCE."

As highlighted by my statement in last month, London Stock Exchange listed company, Origo Partners Limited valued their 14% stake in GCE at only US$13.4 million in June 2014.

This means that SRC International’s 9% stake in GCE would be worth only US$8.6 million (RM31 million) today or a 85.6% drop in the value of investment. This represents a loss of US$51.4 million (RM185 million) to the company.

More importantly, the Ministry of Finance’s reply debunked the impression given earlier that the bulk of SRC investments were placed in GCE. In fact, the US$60 million or RM216 million investment in GCE only represents a small fraction of the RM4 billion of borrowings from Kumpulan Wang Amanah Persaraan (KWAP).

However, the reply by the Ministry raises another crucial question as the GCE investment valued at RM31 million today, represents only 0.8% of the RM3.81 billion of SRC International’s “investment portfolio outside Malaysia”.

The question hence arises, where did the rest of SRC International’s RM3.81 billion go?

In the light of the questionable “level 3 assets” of RM13.4 billion in SRC International’s former parent, 1Malaysia Development Bhd (1MDB) which appears to have gone missing, Malaysians are also interested to know if RM3.81 billion, most of which are also classified as “level 3 asset” are missing.

The Ministry of Finance must immediately disclose what are the RM3.81 billion of “investments” to prove that they are not trying to hide another multi-billion ringgit scandal. The failure to be transparent will only further erode the confidence of ordinary Malaysians in our public institutions and the Najib administration.

Tony Pua

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