Wednesday, July 15, 2015

And There Still Isn't a 1MDB Denial !

1MDB did not deny that the Financial Statements submitted to its lending banks were tampered.

I read with some amusement, 1Malaysia Development Bhd (1MDB)'s rant against my accusations that the scandal-ridden company had tampered its March 2014 financial statements submitted ‎to its lending banks.

1MDB said, "it is unclear to 1MDB on what basis YB Tony Pua, a third party who is not a banker to 1MDB - nor privy to the company's internal dealings, is making such unsubstantiated and damaging allegations against 1MDB."

The heavily indebted company further added, ‎"in any event, interaction between 1MDB and its bankers, including confidentiality obligations, are governed by contract and national law."

It is now clear that the standard operating procedure for 1MDB if it is unable to answer straightforward questions is to first, discredit the critic or source and second, to cite "confidentiality obligations".

A simple read of 1MDB’s 3-paragraph statement will leave anyone crystal clear that there was no denial of the very serious tampering allegations. The “confidentiality” argument doesn’t even hold water because we are not asking for the documents to be revealed but whether the documents have been tampered.

1MDB further lamented that "‎such actions impact the day to day operations of 1MDB, a 100% government owned company, and the implementation of the 1MDB rationalisation plan."

However, 1MDB has no one to truly blame other than itself for any further damage ‎to its sullied reputation because it has pointedly refused to bury the allegations with an unequivocal denial.

While 1MDB tried to make light the situation by claiming that no Bank has declared an "Event of Default" on the distressed company, it should not forget that Deutsche Bank has only recently demanded an early repayment for its US$975 million loan because of similar breaches to the loan agreement.

The Singapore Business Times ‎had reported in May this year that the US$975mil loan was secured with 1MDB’s wholly owned Brazen Sky’s US$1.103 billion kept at Swiss private bank BSI Singapore.‎ The report, quoting sources, said the “securitisation document” for the loan has now been deemed “incomplete”, as one of the covenants was allegedly not fulfilled.

If ‎1MDB could mislead banks about its nonexistent cash in its bank account, then it certainly does not stretch the imagination for the company to tamper its Audited Accounts submitted to its lenders.

After 1MDB’s non-statement, there is now greater reason to believe that the audited accounts have indeed been doctored. As stated yesterday during my press conference, if discrepancies are found with the Financial Statements as I have alleged, I call upon the Bank to immediately file Police reports to protect its interest and that of its shareholders.

Tony Pua

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