Tuesday, October 13, 2015

Arul Kanda must come clean if 1MDB breached BNM conditions for the transfer of funds overseas

Yesterday, the Sarawak Report published Bank Negara Malaysia’s Letter of Authorisation dated 29 September 2009 to 1Malaysia Development Bhd (1MDB) to transfer and invest US$1 billion in a joint venture with PetroSaudi International Limited.

The letter granted permission for 1MDB to acquire 40% of 1MDB PetroSaudi Limited on the basis of particular information provided by 1MDB in its application.  The key information provided included

that the joint venture will have combined equity funds of US$2.5 billion to be used for investment in various sectors;

that the US$2.5 billion of funds will be deposited with Banca della Svizzera Italiana SA, Geneva while waiting for the prospective investments to be identified;

that the funds will be transferred in tranches to ensure an orderly foreign exchange market

Based on publicly available information today, the state-owned firm has clearly misled Bank Negara in its application to transfer the US$1 billion in funds overseas.
Firstly, the joint venture never raised US$2.5 billion in funds as Petrosaudi did not inject any cash into the joint venture for its 60% stake.  Instead Petrosaudi injected assets allegedly worth more than US$1.5 billion, which was subsequently proven to be fraudulent or non-existent.

Secondly, even the US$1 billion invested by 1MDB was never deposited with Banca della Svizera Italiana SA.  Instead US$700 million was misappropriated directly to Good Star Limited’s account with Coutts Bank, Switzerland, which is in turn controlled by Low Taek Jho, or better known as Jho Low.

Thirdly, the funds were never transferred in tranches but at one go to 2 different accounts, within days of receiving the Bank Negara letter.

1MDB President Arul Kanda has earlier confirmed that the minutes to the 1MDB Board of Directors meeting published by the Sarawak Report to be authentic, which proved that he has repeatedly lied and misled Malaysians with regards to the proceeds from the US$2.318 billion Cayman Island investment.

Arul Kanda must now also confirm if the Letter of Authorisation from Bank Negara published by Sarawak Report is also genuine.

The exposé is of massive importance because it provides clear cut evidence for the investigating authorities and the Attorney-General to charge the responsible officials for criminal breach of trust, abetting misappropriation and embezzlement as well as a host of other crimes under the Financial Services Act governed by Bank Negara. 

At the very least, Mr Tang Keng Chee, the then Executive Director of 1MDB whom the letter was addressed to, and Datuk Shahrol Halmi who authorized the payments to Good Star Limited must be immediately investigated charged for the above crimes.

The question is, will the newly appointed Attorney General, Tan Sri Apandi Ali take the necessary actions, or is his paramount duty to cover up all crimes relating to 1MDB to ensure that none of it will see the light of day in our Courts of law?

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