My Anthem

Friday, April 08, 2016

1MDB owes RM50b, the Sun's frontpage headline SAYS IT ALL!

For me as a newshound, now mainly a BLOGGER, the Sun's headline today (Friday, April 8, 2016) actually CONFIRMS  THAT >>>> all along, what NAjib has been telling us the RAKYAT THat ALL IS WELL WITH 1MALaysianDEvelopment BERhad (1MDB) Is ALL BULLSHIT! 

WE all know DEBTS are as that Values are certain as stated as they occurred at a certain period, while ASSETS are merely estimated values of POTENTIAL VALUES and MAY NOT BE REALISED UNTIL and WHEN THEY ARE SOLD and PAYMENTS RECEIVED.

In the Table titled "1MDB Financial position between 2010-2016"
the final column wrt entry as at Jan 2016 showed: 

ASSETS RM53b  Interest Payment RM3.3b (FY2015) and DEBT  RM50b

THe loudest critic of them all against 1MDB since the scandal broke is that, all along former PRime MInister TUn DR Mahathir MOhamad, had stated in the initial stages the IMDB debts totalled RM42billion, so it was UNDER-STATED.

 I will lead off this post reproducing what DR Mahathir wrote:
when googling, this is the summary paragraph: 23, 2015 - More than 1billion US Dollars were said to be paid to Petro Saudi ... 1MDB revalued all its assets at 52 billion Ringgit. .... Have you heard of the saying ' make hay while the sun shines, oran' ? ... on the front page of the New Straits Times blared, ' IT IS A HEINOUS CRIME SAID THE PRIME MINISTER.

The post in FULL follows:~~~ 

1MDB 100

1. The management of Government finances is governed by laws, rules, regulations and practices. Companies also have similar systems but Government manages huge sums of money, basically the people’s money and it is imperative that the managers follow the laws, rules and regulations.
2. Corruption prevails in almost all Governments. But usually they involve relatively small sums. The work of auditors are supplemented by special anti-corruption authorities to ensure that as little as possible of Government money is misused, abused or basically stolen by the people authorised to manage it.
3. Governments can lose money through bad investments. We would know where the money is lost. But when huge sums of money disappear, then those entrusted with its management must answer for the disappearance. Disappearance is different from just losing. Disappearance is about money lost which cannot be traced. This can be because of corruption or theft.

4. In Malaysia the PM and DPM usually hold one extra portfolio. Usually the Ministry of Home Affairs and Ministry of Defence alternate between the two. Occasionally while waiting for suitable candidate, the Ministry of Finance is held by the PM. Dato Sri Najib however prefers to keep the Ministry of Finance under him all the time. He has appointed a second Minister of Finance. This is his prerogative of course, but he must ultimately be responsible for what happens to the country’s finances.
5. The first requisite for the management of Government money is the yearly budget. Prepared by the Ministry of Finance from feedbacks by all ministries and departments, the budget is first presented to the Cabinet. If passed it is then presented to Parliament.
6. Government is expected to spend money according to the budget. If the yearly budget cannot meet an urgent need of the Government, a supplementary budget can be presented by Cabinet to Parliament. Drafts of the budgets are prepared by officers of the Ministry. Government raises money through taxes and fees of all kinds. Government may own special businesses such as Petronas, which may contribute to the budget.
7. In Malaysia there is also off-budget-funds which may not be presented to Parliament but are still subject to scrutiny and approval of the Cabinet.
8. Cabinet papers are secret of course. But in the case of 1MDB the presentation to the Cabinet and approval by it seems to be unclear. There seems to be attempts to hide behind official secrecy.
9. What we do know is that 1MDB has as its advisor the Prime Minister and Minister of Finance. It is inexcusable that the management which is appointed by the PM would reject his advice. So like the British Advisor of old, the advice of the Advisor is a directive.
10. Since then three CEOs of 1MDB have resigned without explanation. Could it be because they could not accept the advice!
11. The Government invested one million Ringgit in the 1MDB. According to known records 1MDB then borrowed from various sources 42 billion Ringgit.
12. A company with 1 million Ringgit capital with no assets cannot borrow 42,000 times its capital with no collaterals. That 1MDB is able to do so is because of Government guarantees.
13. In other words it is Government which is borrowing the money. If 1MDB loses money, the Government will bear the loss. Yet the operation of 1MDB is not overseen by Government officers responsible for the management of Government funds.
14. Why has the 1MDB become controversial? What is wrong with 1MDB?
15. From the beginning it was wrong. It started off as an off-budget and it was not put before the Parliament.
16. The money was borrowed. So it is not sovereign wealth but sovereign debt.
17. The bond raised by Goldman Sachs costs more than is usual for Government borrowings. The interest rate at 5.9% was too high. Government loans usually attract about 3% or below.
18. In addition 10% commission went to Goldman Sachs which means that 1MDB gets only 90% of the money borrowed yet has to pay interest on 100%, raising the interest rate to 6.6%. Averaging at 6%, yearly interest on 42 billion Ringgit is about RM 2.5 billion. Since 2009 there has been no income from all the assets. And 1MDB had to borrow RM2 billion to pay the interest. The loan is now RM42 billion.
19. Total initial borrowings amounted to 42,000,000,000 (42 billion Ringgit). As far as can be ascertained the investments are as follows:
a. Purchase of Tanjong Energy (now known as Powertek Energy Sdn Bhd) from Ananda Krishnan for RM 8.5 billion. This is higher than market price. The licence was about to expire.
b. Purchase of Genting Sanyen Power (now known as Kuala Langat Power Plant) for RM 2.3 billion. Again high above market price. The licence was abut to expire.
c. Purchase of Jimah Energy for RM 1.2 billion.
d. Purchase of 70 acres of land in Jalan Tun Razak for RM320 million i.e: RM64.00 psf. Land last sold in the area was at RM7,000 psf.
e. Purchase of 495 acres of land in the former Sungai Besi TUDM airport (now known as Bandar Malaysia) about RM 363.5 million i.e: at RM 91.00 psf. Estimated value RM1,000 psf.
f. Purchase of 234 acres land in Air Itam in Penang RM 1.38 billion i.e: at RM135.00 psf.
20. It should be noted that TRX land is close to land recently sold at RM7000.00 psf. Assuming the market price is RM3000.00 psf the true value of this land is 6 billion Ringgit. The Government has therefore lost 5 billion plus because 1MDB paid only RM320 million.
21. With regard to the Sungai Besi Airport land, 1MDB paid 363.5 million Ringgit for 495 acres – i.e at RM91 psf. Assuming market price for this land is RM1000 psf. the Government lost approximately 20 billion Ringgit.
22. The land in Penang is of poor quality and has more than 1000 squatters. Yet 1MDB paid RM1.3 billion i.e at RM 135 psf.
23. These are all the purchases that are known. They all add up to RM14.7 billion. So there is approximately 27 billion Ringgit left.
24. More than 1billion US Dollars were said to be paid to Petro Saudi without verification as to the value of this company or its assets.
25. Where is the rest of the money?
26. A certain amount was registered in the Cayman Islands. What was the money used for? What was brought back to Malaysia. What was brought back and deposited in a Swiss bank in Singapore. Why? Where was the money brought back from? Why is this money not used to pay the RM 2 billion interest. Why did Bank Negara allow the first tranche to be repatriated to Malaysia and not the second tranche. Now the Swiss bank has told the Singapore authorities that the document did not originate from them and does not represent a true account of the assets of 1MDB. So where is the money said to be registered in the Cayman Islands and is now brought back.
27. Clearly 1MDB is not getting any return from its investments. Not only is it losing money but the Government has lost money when 1MDB paid only RM683 million for TRX and Sungai Besi. Total loss incurred by the Government is approximately 25 billion Ringgit.
28. 1MDB revalued all its assets at 52 billion Ringgit. That is because Government land was brought at far below the market price. It can only use this money to repay loans if it succeeds in selling them off as land or after development. Progress on TRX is very slow and there is no work on Sungai Besi land. No money will be generated during development; only outflows.
29. It is this disappearance of a huge amount of borrowed money by 1MDB and the inability to answer questions regarding what happened to the funds that disqualifies Najib from being Prime Minister of Malaysia.

DESIDERATA: AS I copied&pastried at just 30minutes b4MIDNIGHT "When I write bestA",  for the benefit of my dear ER ...NO, I don't gain a single sen doing this OK!.., DEsi is not very ORiginal in the prior sentence, let's gift benefit where IT BELONGS! IS THIS LINE (in BLUE whey!) FAMiLIAR?

I just noticed the last word ends with "LIAR"! So very apt!

There were already 100 comments as I copied this post from chedet's; please surf to the gOod doctor's webblog to read and add to the Comments, not here/hear! ``YL, DEsi

100 thoughts on “1MDB”



I surfed to the SUN online, but I couldn't copy its FRontpage report as in the PRINT edition, "so Minta Maaf, ia! "


I will just copy the HEADLINES of the main stories flowing from the PAC's report, from the SUN as in PRINT Copy. (I also have the Star's print copy, and IF TIME PERMITS, I will also later repro the headlines here/hear!...)

  Page 4: '1MDB board failed in its duty'


Page 5 (with 3reports): 


No wrongdoing under my watch, says Shahrol

Najib: Action if malpractices found in report

 1MDB directors offer to quit 


DESIDERATA: I like to think myself a man of his word, a rare species nowadays among Malaysians, as the 1MDB has EXPOSED MANY PROTAGONISTS' BACKSIDES. FRont and side sides too! 

2. TO keep my promise, please surf to similarly titled POst PART II of April 9; terima kasi', xie xie, TQ YOU!


3. I have taken the liberty of HIGHLIGHTING in RED (THus coloured) the more significant points to help

my ERs' thinking process so they don't have to tax their grey matter too much;

DEsi is not only a man of his word, he's also a man who plays (prays? ala PhuaCHEWkang?) around wit' his words, so bear and share (his burden) OK! V V are awe socialist!


Now the good doctor who is the "FLAVOUR of the YEAR" had once labelled Socialists as "Communist"; I will try my best to change his MINDA a byte (as we do interact a byte as BLoggers/BUMmers...)to have a badder description of people like Desi and Sdr Dr Syed Husin Ali -- we are DEFINITELY NON-COMMUNIST; some are socialite, maybe! YL, Desi, knottyaSsusual


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