Tuesday, January 09, 2018

Did 1MDB resort to carefully leaked fake news to The Singapore Straits Times to cover up the fact that the Ministry of Finance forked out another RM2.4 billion to foot the bill for 1MDB’s debt to IPIC?

1MDB proudly announced that they had made their final US$602.7 million or RM2.4 billion settlement payment to Abu Dhabi’s International Petroleum Company (IPIC) on 27 December, four days ahead of their deadline.

The problem is, we all know 1MDB is completely insolvent.  So Malaysians are rightly concerned as to how 1MDB paid its latest instalment of their debt.  All that is stated in the official 1MDB statement is that the payment is funded through its “on-going rationalisation programme”.

No one of course, has a clue as to what the “rationalisation programme” entails.

What is more interesting is the carefully planted leaks to The Singapore Straits Times (SST) to reveal that the funds to repay IPIC came from the sale of investments in financial instruments and stakes held in two 1MDB-related entities that own tracts of land in Penang and Pulau Indah, Selangor. The report merely identified the anonymous buyers as “concerns ultimately controlled by Chinese state-owned enterprises”.

This is not the first time SST had carried out a hatchet stories which helped cover up some of the 1MDB’s financial shenanigans.  When the Bandar Malaysia sale to an Iskandar Waterfront-led consortium was terminated out-of-the-blue by the Ministry of Finance, it was SST which created a media maelstorm by reporting on 9 May 2017 that “Government officials and financial executives close to the situation told The Straits Times that negotiations with the Dalian Wanda Group to take a central role as master developer have reached an advanced stage…”

“Malaysian government officials noted that the new deal would be substantially higher than the previous RM12.3 billion valuation tag for the entire project.  According to financial executives familiar with ongoing talks, Wanda has proposed to use half of the development for tourism and entertainment-related ventures valued at roughly US$8 billion,” the Singapore paper added.

The above proved to be a hoax of course, because when Dato’ Seri Najib Razak met Wanda a week later, he came home empty-handed – without even a face-saving “Memorandum of Understanding (MOU)” signed.

The current SST report is similarly couched in the same language. SST claimed that “Malaysian government officials declined to identify the buyers in the real estate transactions but one financial executive close to the situation said that the equity interests in the 1MDB real estate entities were acquired by "concerns ultimately controlled by Chinese state-owned enterprises". The executive declined to elaborate.”

The SST report was inevitably picked up by nearly all local media outfits.  This clearly served the interest of 1MDB which would want to avoid prickly questions on how they found the funds to  repay IPIC.

The question really is, if 1MDB has really succeeded in disposing of its controversial properties in Pulau Indah and Penang to China-owned state enterprises, why is there absolute silence from official sources?  Dato’ Seri Najib Razak and 1MDB would have been carrying out victory parades for proving their critics wrong, as they did in the past.

Surely if the companies owning these parcels of land were sold for billions of ringgit to foreign investors, from China or otherwise, official transactions would have taken place and the information would be publicly available.

More curiously, these parcels of land in Selangor and Penang were purchased by 1MDB for RM294 million and RM1.1 billion respectively.  Critics were aplenty in citing that both parcels were purchased at inflated prices.  However, even so, the combined purchase amounted to less than RM1.4 billion.

Hence if the SST report were to be true, then it begs the question as to which Chinese state-owned enterprises would pay an outrageous RM2.4 billion for these parcels, which in-turn allowed 1MDB to repay its second loan instalment to IPIC?  Or is it more likely that it is another hoax to evade disclosing the fact that it was really the Ministry of Finance, which directly or indirectly, repaid both instalments amounting to US$1.24 billion to IPIC?

Monday, January 08, 2018

Ministry of Finance Bailout of 1MDB continues unabated with its latest acquisition of 106 Exchange Tower to be built in Tun Razak Exchange

The Edge reported yesterday of the Ministry of Finance’s takeover of the 106-storey 106 Exchange Tower through the company MKD Signature.  The 3.42 acres of land for the project was previously acquired by Indonesian conglomerate, Mulia Group for the sum of RM665 million.

The 106-storey Exchange Tower was initially proof of 1MDB’s success with the TRX project as it was a wholly-owned foreign investment by Indonesia’s Mulia Group. However, news of the transfer of a majority stake ‘back’ to the Malaysian Government goes to prove that there is something extremely fishy going on.

Why is it even necessary for the Government to use tax-payers’ funds to get involved in another mega-property project?  Didn’t the Second Finance Minister, Dato’ Seri Johari Abdul Ghani announced a Cabinet decision to freeze all high-end commercial and residential projects?  Why is the Ministry of Finance participating in the aggravation of the property glut in the country?

More importantly, if Mulia Group had paid RM665 million for the land, the question is how much did the Ministry of Finance pay to acquire the 51% stake in the project?
The complete lack of transparency over the deal which would involve hundreds of millions of ringgit, possibly to the tune of billions, raises suspicions that it is really another one of the series of continued bailout of the debt-stricken 1MDB.

Was there for example, a secret ‘put option’ in the sale and purchase agreement between the Mulia Group and 1MDB, where the latter is obliged to buy back a majority stake from Mulia Group with a higher price at a later date?  And because 1MDB obviously has no money to buy back the stake from Melia Group, was the Ministry of Finance was forced to step in to bailout 1MDB?

It should also be noted that this would be the second tract of 1MDB's TRX land that has been bought by MOF companies. It was previously disclosed in Parliament that MOF-owned company Aroma Teraju had purchased another tract of land at the Tun Razak Exchange (TRX) development in 2015.

Last year, I had asked several times in Parliament for the land area and purchase price of the land by Aroma Teraju.  However my question was repeatly shot down because of the purported confidentiality clause in the purchase agreement was with two companies wholly-owned by MOF.

Why hide behind the veil of secrecy when the parties involved are entirely owned by the Government?  Is it because the Ministry of Finance will look utterly stupid for buying back tiny parcels of land back from 1MDB at sums astronomically higher than the RM230 million paid by 1MDB to acquire the 70 acres from the Government?

We call on MOF and 1MDB to confirm and disclose the details of the purchases of the land in TRX above. As wholly-owned companies under the Government, the public deserves to know what is being done with their own money.

Thursday, January 04, 2018

Mark Twain’s quote, “there are lies, damned lies and statistics” best describes Information and Communications Minister Dato’ Seri Salleh Keruak boasting of Malaysia having the lowest poverty rates in Southeast Asia

Writing on his blog on Wednesday, 28 December, Dato’ Seri Salleh Keruak boasted that the Malaysian economy was in fact very doing very well because our GDP per capita, according to the CIA World Factbook stood at US$27,2000, which was much better than those of neighbouring Thailand, Indonesia, the Philippines, Vietnam, Myanmar and Laos.

More importantly, he claimed that our poverty rate was the “lowest in South East Asia” at 3.8%. He further added that he was grateful because our poverty rates are “drastically lower” than the poorest countries namely Syria, Madagascar and Zimbabwe with poverty rates above 70%.

Have we really gone so low today that we now need to compare ourselves with the poorest countries in the world today to make ourselves feel good for the new year?  What has happened to the times when we pride ourselves to be among the Asian Tigers, being quoted in the same breath as South Korea, Taiwan and sometimes even Singapore and Hong Kong?

What’s more, the Information and Communications Minister can’t even gets his fact right, intentionally or otherwise.  It appears that he has conveniently erased both Singapore and Brunei, with substantially higher GDPs per capita at USD77,500 and USD87,800 respectively off the map of Southeast Asia.

And even when he did get his “facts” right when compared to Vietnam, Indonesia, Thailand, Laos, the Philippines and Myanmar, he also conveniently forgets to convey the fact that our neighbours have been enjoying significantly higher growth rates in the recent years.

Curiously however, Dato’ Seri Salleh Keruak chose to quote the CIA Handbook statistics, instead of the more authoritative World Bank.  If Salleh Keruak were to believe the CIA Handbook statistics, Malaysia should already immediately declare itself a “developed nation”, ahead of the Vision 2020 target.  Does the Minister actually believes that the average monthly income of Malaysians today is in excess of RM9,000?

A check with the World Bank Report – which is consistent with Malaysia’s own Department of Statistics, our GDP per capita is only US$9,500, barely a-third of the Minister’s boast!  So why did the Minister decide to quote an unbelievable source and not that of our own Department of Statistics or the World Bank?

Instead of trying to glorify Malaysia’s superiority to countries like war-torn Syria and Zimbabwe, or even the Southeast Asian backwaters of Laos and Cambodia, Dato’ Seri Salleh Keruak should instead explain why Malaysia has fallen so far behind countries like South Korea and Taiwan?

In 1966, 10 years after achieving independence, Malaysia’s GDP per capita was triple that of South Korea?  The latter overtook us in 1990 and today, based on World Bank figures, South Korea has a GDP per capita of US$27,500 (2016) which is more than triple that of Malaysia today.

Why have we lost competitiveness to our Asian Tiger peers in the 1980s and are now threading water above countries which are rapidly catching up like Vietnam and Indonesia?  This is the real question which Dato’ Seri Sallleh Keruak and the BN administration must answer, and not continuing to pull the wool over the rakyat’s eyes.

Wednesday, January 03, 2018

Only a totalitarian communist-like regime would ban books and art without requiring the authorities to provide any rhyme or reason.

On December 19, Datuk Zaid Ibrahim’s book ‘Assalamualaikum: Observations on the Islamisation of Malaysia’ was banned under the Printing Presses and Publications Act (PPA). As usual, only official reason given for this ban is that the book is "likely to be prejudicial to public order as well as public interest and is likely to alarm public opinion".

The addition of ‘Assalamualaikum’ to the growing list of books banned by the Malaysian government is proof of the government’s outright disregard for freedom of expression and ideas in Malaysia.

According to Zaid, the Home Ministry did not explain or consult him before banning his book nor was he even informed that the book would be banned. It goes to show the immense and arbitrary power that the PPA accords the Home Ministry to ban these without any clear reasoning.

Such curt excuses to ban books certainly harks back to the Stalinist or Maoist regimes where any forms of expression, whether in writing or in art, which are deemed prejudicial to the interest of the ruling elites are banned.

In 2017 alone, 44 gazettes have been issued to ban publications in Malaysia. Among the political titles banned are civil society group G25’s new book Breaking The Silence: Voices of Moderation; Islam in a Constitutional Democracy and reknowed academic Professor Farish A. Noor’s From Majapahit to Putrajaya, which was published in 2005.

The banning of these titles without any clear justification shows that the government exercising totalitarian control over what ideas can be discussed by Malaysians. This goes completely against the values of democracy that our country holds so dear.

In a democratic state, the authors and publishers would be hauled to the Courts to be charged for any criminal offences which may have taken place.  Even if there were no criminal elements involved, the Government must at the very least provide facts and justifications to prove the contents of these books to be wrong.

However, the BN regime will not even pretend to rebut the arguments carried in the book, however feeble the rebuttals might have been.

Just last month I had questioned the government’s censorship of arts following the confiscation of works at the KL Biennale for purportedly containing ‘elements of communism’. It seems that the thought policing of our government will continue with the banning of these books and the continued censorship of our media.

We call upon the Home Affairs Minister to prove that Malaysia is not taking great leaps to undermine democratic principles enshrined in our Federal Constitution, in remaking Malaysia into a communist state.