Tuesday, August 18, 2015

Consumed By The Laws of the Jungle

Once again, 1MDB’s “rehashed” and “recycled answers” failed to answer the simple questions posed by allegedly “unproven” recycled questions.

I appreciate 1Malaysia Development Bhd President, Arul Kanda’s recognition that “public scrutiny and questioning by YB Tony Pua is important to establish the truth”.

However, he once again claimed that I have made “repeatedly unproven, recycled and reused allegations”. While I have made many allegations against 1MDB previously, the current matter being raised isn’t an allegation but a repeated request for clarification which 1MDB has failed to provide.

The latest response by 1MDB yesterday is the best testament that Arul Kanda makes a habit of repeating recycled and reused “clarifications” which never answered the questions posed. Worse, it is a less-than-disguised attempt to obfuscate the facts.

I had very simply asked, what has become of the supposed US$1.1 billion which was “redeemed” from Cayman Islands as announced by Arul Kanda himself on 13 January 2015? Since it is not “cash” as originally claimed, Malaysians are interested to know what are these so called “units” which is held in a Singapore bank, and what are the bank assessed value of these “units” post-redemption.

The response we received from 1MDB instead was “1MDB invested a total of US$1.83 billion with PetroSaudi as murabaha notes, and ultimately received US$2.318 billion of fund units, representing a gain over time of US$488 million.”

Arul Kanda further added that “the valuation of the fund units was undertaken by the fund administrator and is clearly described in 1MDB’s audited financial statements.”

The 1MDB President however, cleverly failed to highlight (again) the fact that the last financial statements was for the year ending 31 March 2014. That is nearly 17 months ago and well before the Cayman Islands investment was supposedly redeemed in January this year.

Is Arul Kanda trying to tell Malaysians that he has no clue what the redeemed “units” held in BSI Bank Singapore are really worth today? Is that also the reason why the “units” cannot be disposed or liquidated despite being classified as “investment assets for sale” in the 1MDB financial statements?

Is that the reason why the Malaysian government has been forced to grant 1MDB with RM950 million of emergency loans, as well as billions of ringgit of direct and indirect guarantees for additional loans and advances this year?

The above question isn’t of course the only question that the 1MDB President is unwilling to answer honestly. Many transactions took place after the 31 March 2014 financial year end. However, 1MDB has refused to provide any “open book” disclosures on these transactions. They include simple information like what is the latest outstanding debt in 1MDB?

More pertinent but unanswered questions are like how much as 1MDB paid to Aabar Investments PJS or International Petroleum Investment Corporation (IPIC) to buy back the options which were granted to them? These options were granted as part of the agreement for the latter to guarantee 1MDB’s US$3.5 billion of loans in 2012. Is it true for example that US$481 million is still outstanding payable to IPIC as disclosed by the latter’s financial statements as at 31 December 2014?

Therefore while Arul Kanda describes such “monkey business” by me does not benefit anyone as “Malaysia is not a jungle”, I certainly beg to differ.

With the Public Accounts Committee crippled and no commitment given Dato’ Seri Najib Razak on the time frame to reconstitute the PAC; with the previous Attorney General sacked for attempting to charge the Prime Minister for corruption as alleged by the BN Strategic Communications Director, Dato’ Seri Rahman Dahlan; with the Special Taskforce investigating 1MDB dismantled; with dissenting Ministers removed from the Cabinet; Malaysians certainly cannot be blamed for concluding that we have been consumed by the laws of the jungle.

If I don’t remain the persistently pesky monkey on 1MDB’s back, then 1MDB will be able to get away with providing evasive non-answers, pretending that everything is dandy and above board without any accountability.

At the same time, Arul Kanda must not forget that he is an employee of a wholly-owned government subsidiary and must be transparent and accountable to the Malaysian tax-payers. He continued failure to do so will not only cast himself in poor light, he will damage the reputation of the Prime Minister and destroy the image of Malaysia to the global financial and investment community.

Tony Pua

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