- I thank the wsj.com wit' awe my heART!:~~~~~~~~IF not for this diligent news organisation, Malaysians would not have been as well informed of the SHENANIGANS that have transformed the country's development roadmap from moving towards Developed Nation Status towards a REVERSE (in the Malay language, GoStan LOL!) direction leading to an eventual (hoped for by this Blogger and several mateys OK!) ABYSS. Some politicians including MP for Batu SDR TIAN CHUA, have likened Malaysia today to the ASIAN ZIMBABWE.
The 1MDB Affair: Malaysia Delegation in Abu Dhabi to Resolve Dispute
Abu Dhabi fund announced $2.6 billion net loss in filing
ENLARGE
1Malaysia Development Bhd and Abu Dhabi are looking to resolve a dispute over billions of dollars that have gone missing.
Photo:
Agence France-Presse/Getty Images
Abu Dhabi announced on Wednesday that International Petroleum Investment Company is being merged into another fund in the Emirate. Most of the assets of 1Malaysia Development Bhd. have been sold or transferred to the country’s Ministry of Finance.
Meanwhile, a delegation from Malaysia landed in Abu Dhabi this week for talks with senior officials about how to resolve a simmering dispute between the two sides, according to a person familiar with the matter.
(Read two never-before-published letters written by key players here and here.)
The saga involves offshore companies of dubious provenance and huge sums of cash transferred across the world. Investigators in seven countries are probing what some of them believe is one of the biggest corruption scandals in history.
In a filing on Thursday, IPIC gave new details about its dispute with 1MDB. The fund announced a $2.6 billion net loss, amid lower oil prices, and said it was taking a $3.5 billion provision related to guarantees it gave for a pair of 1MDB bonds.
Total funds missing from 1MDB could top $6 billion, including money diverted from three bond offerings and an early business deal, according to a person familiar with one country’s probe.
IPIC was set up by Abu Dhabi in 1984 to invest in energy projects around the world. Over the years, it moved far afield of that original mission by investing in banks, automobile companies and other unrelated businesses. The merger with Mubadala Development Co. will likely see those non-energy investments trimmed down over the coming years, analysts say.
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That British Virgin Islands company has a similar name to the bona fide Aabar Investments PJS, but IPIC has said repeatedly that the British Virgin Islands-registered Aabar was never part of its corporate structure. What complicates the matter even more is the British Virgin Islands company was set up by IPIC’s former managing director Khadem al Qubaisi, who was forced to resign from IPIC last year and has since had his assets in the UAE frozen by authorities. He declined to comment.
1MDB has argued in private negotiations that the role in the British Virgin Islands company of Mr. al Qubaisi and another former executive from an IPIC subsidiary, as well as the existence of a document showing the British Virgin Islands company was owned by the genuine Aabar, prove IPIC should take responsibility for at least some of the missing money, according to people familiar with the matter.
In its filing on Thursday, IPIC said it was also investigating “other companies outside the group’s corporate structure” that were “incorporated in other offshore jurisdictions using variations of the ’Aabar’ name.”
IPIC, 1MDB and the Prime Minister’s office in Malaysia declined to comment. 1MDB has previously said it was unaware of any wrongdoing at the firm, but was willing to assist investigators.
IPIC also contradicted an assertion from 1MDB that the bona fide Aabar had guaranteed about $1 billion worth of 1MDB’s investment portfolio in the Cayman Islands.
Valuations conducted by 1MDB’s auditors on the value of the investments were largely reliant on that guarantee, according to Malaysian investigation documents and 1MDB board of directors minutes from 2012 and 2013. “Both IPIC and Aabar confirm there is no record of any such guarantees being provided by Aabar,” IPIC said in its financial statements.
The dispute between IPIC and 1MDB burst into the open in April, when IPIC declared 1MDB had defaulted on an agreement to repay a billion dollar bailout IPIC provided 1MDB in 2015. 1MDB then refused to pay interest on the pair of bonds IPIC guaranteed, which forced IPIC to make the payments.
IPIC said earlier this month it was seeking the full $6.5 billion from 1MDB and the Malaysian Ministry of Finance through arbitration.
Behind the scenes, the issues began to affect the relationship between the two funds last year, according to two letters from IPIC and Aabar provided to the Journal by an Asian-based third party with knowledge of the matter.
In one letter from July 2015, IPIC’s managing director informed Prime Minister Najib Razak of what IPIC believed to be inconsistencies in 1MDB’s financial statements related to some of the payments 1MDB said it made to IPIC entities.
Referring to a $1.4 billion refundable deposit 1MDB said was held by Aabar, Mr. Al Mazrouei said “I am not aware of any such deposit held by Aabar or any member of IPIC’s group, and no document relating to the underlying transactions provides for such a deposit as far as I am aware.”
The Wall Street Journal reported last year that payments from 1MDB to the Aabar in the British Virgin Islands had gone missing. At the time, 1MDB said the reports included “unproven allegations” and “malicious insinuations.”
Write to Bradley Hope at bradley.hope@wsj.com
DESIDERATA: I have had hoped the constant spotlight on 1MDB, by the international media and a few BOLD Malaysian ones, including the Fifth Estate that encompasses the BLOGGERS, would have moved the EXPOSE ON THE UNRAVELLING of the greatest scandal NegaraKu has witnessed since Independence in 1957. At least 11 foreign countries on the last count have started investigations into 1MDB, mainly on MONEY-LAUNDERING RELATED CHARGES.
I await -- wit' some impatience, hence THE RAGE, remember! --THAT PERFECT STORM CLOUD FORMATION OVER PUTRAJAYA. O Lord, please step up the gears to lessen Malaysians' woes. Amen. -- YL, Desi
