How did 1MDB make its “equivalent” of US$350 million payment to IPIC?

1MDB proudly announced that it has successfully made partial payment for the outstanding sum to Abu Dhabi’s IPIC, after twice having the deadline extended.

The beleagured company said “1MDB is pleased to announce that pursuant to the amendment dated  August 8, 2017, to the settlement deed with Minister of Finance (Incorporated) Malaysia and IPIC, 1MDB has now remitted to date, the equivalent of US$350 million to IPIC.”

When reading any statements from 1MDB, it is always like trying to solve an Agatha Christie murder mystery.  You need to scrutinise the statement for curious or incriminating clues.

For example, in this case, why did 1MDB say “the equivalent of US$350 million” as opposed to just a straightforward “US$350 million”, or whatever the amount is?

Normally, one would perhaps phrase “the equivalent of US$350 million” if the payment was not remitted in US Dollars but perhaps in this case in Ringgit Malaysia?  This clearly lends credence to the allegations that no Bank wants to process payments relating to 1MDB transactions for fear of partaking in a money laundering exercise, especially since US Dollar transactions would require re-routing via US Banks.

The Malaysian Insight had earlier also reported that the remittance was carried out via Maybank Bhd.  Does this mean that 1MDB circumvented its US Dollar remittance “technical problem” with Bank Negara granting approval for the remittance to be issued from Malaysia in Ringgit (or any other non-US Dollar currency)?

This mystery further begs the question – how did 1MDB get its money in Malaysia?  By all public pronouncements from 1MDB and by Ministers in Parliament, 1MDB certainly doesn’t have “the equivalent of US$350 million” or nearly RM1.5 billion in cash sitting around in its local bank accounts.

That’s when you refer back to 1MDB’s 24 April 2017 IPIC settlement announcement for more clues. Then, 1MDB explicitly stated that the company’s “obligations will be met by 1MDB, primarily via monetization of 1MDB-owned investment fund units”.

The last we know, these investment fund ‘units’ were held in the now-defunct BSI Bank, Singapore.  The last known value on the balance of these ‘units’ was US$940 million.

Hence, one would certainly like to ask 1MDB, if the source of the “equivalent of US$350 million” came of the sale of these ‘units’ overseas?  If that were so, wouldn’t the investment disposal proceeds not be in US Dollars?

That’s when you go back to 1MDB’s latest statement, hoping for an easy answer.  However, like any good 1MDB statement, you will never get an honest and straightforward answer.

1MDB disclosed that “all funds paid to IPIC are from proceeds of the on-going rationalisation programme”.  This time, it’s just as important to make inference from what is not stated, beyond what is actually stated.

Notice how in the current statement, 1MDB no longer makes any reference to the “monetization of the 1MDB-owned investment fund units”, which was previously included in all of 1MDB’s past responses on the issue, including two separate Finance Minister’s replies to me in Parliament.

If 1MDB’s “equivalent of US$350 million” payment to IPIC was not the proceeds from the ‘units’ sale, then where did the money come from?  1MDB has after all, sold or transferred all of its assets – both energy and real estate, and have already used such proceeds to pare down their humongous debt and interest payments.

Hence, the US$350 million question now is, did this money come from the Ministry of Finance, directly or indirectly via some convoluted “rationalisation” schemes?  1MDB and Dato’ Seri Najib Razak must come clean on the matter, especially since 1MDB has another US$300 million and US$603 million to pay by 31 August and 31 December respectively.