My Anthem

Sunday, July 10, 2016

"Keeping the Rage" on 1MDB: PART 1












Sarawak Report reveals details of 'auditor-general’s report on 1MDB'

131 comments     Published     Updated
ctable and law abiding government of Malaysia," she said.
 
DESIDERATA: This PART 1 behins a series on updating my EsteemedReaders to "Stay the Rage" on the 1MDB issue, and also simultaneously, on DS Anwar Ibrahim. A fellow blogger SteadyAku plus other BLOGGERS like the host of "malaysianunplugged...."  are similarly engaged on this LANDMARK SCANDAL happening under whom I call THE CLUELESS CEO. Out of necessity, I am Cutting&Pastrying from OTHER COURCES for my UPDATES and my ER are advised to visit the ORIGINAL SITES, especally for the COMMENTRS. Cheers, ENJOY THE READING, KEEP THE RAGE! Keep WellA! ~~ YL, Desi
 
******************************************************
 
 

Friday, 8 July 2016

PART II:SARAWAK REPORT UNVEILS THE AUDITOR-GENERAL'S REPORT ON 1MDB KEPT SECRET UNDER OSA BY PM NAJIB ABDUL RAZAK.




7  July 2016

We continue our examination of Malaysia's secret Audit Report into 1MDB.....

Bank Of Malaysia's Damning Letter To The Parliamentary Accounts Committee

Bank Of Malaysia's Damning Letter To The Parliamentary Accounts Committee

Signed by the Deputy of the Bank Negara
Signed by the Deputy of the Bank Negara
Appended to the Auditor General’s report and pivotal to his findings is a damning letter from the Bank Negara (BNM) sent to the PAC, which explains in detail the disgraceful circumstances surrounding the removal of US$1.83 billion from 1MDB under the guise of a joint venture with the firm PetroSaudi between 2009 and 2011.
Written by the Deputy Governor of the Bank BNM on 23rd March, the letter outlines why the bank had issued its demand to 1MDB to return the entire amount. 

We attach the English translation below.
It has to be read in the light of a second letter from the Bank sent on 6th April, which has already been reported, confirming that the sole beneficial owner of Good Star Limited was indeed Jho Taek Low, who was acting as Prime Minister Najib Razak’s official advisor to 1MDB.  A huge chunk of the ‘public investment’ was therefore siphoned into Low’s private company, as has long been argued by Sarawak Report.

False and inadequate information was provided to BNM


Of key note in this crucial letter from the bank are the points that 1MDB failed in its duty to provide full and accurate information to the Bank to explain the purpose for its removal of these public funds abroad.
The letter says that there were three separate applications to export cash “(Sept 29, 2009 (first permission), Sept 6, 2010 (second permission) and May 20, 2011 (third permission)” and it alleges that 1MDB essentially lied to the bank or withheld information in order to get that permission to send the money abroad:
 “BNM can conclude that 1MDB had received permissions … amounting to USD1.83 billion, without providing complete material information, or through misrepresentation of relevant information, for the purpose of [influencing] BNM’s evaluation of 1MDB’s application.
This is a damning indictment of 1MDB’s deceitful and criminal tactics, which is dealt with in full by the letter below. 
 However, it also raises questions about the controls within the Bank itself and why it accepted half-baked and unsubstantiated excuses of this nature?
Were the supposedly independent guardians of the nation’s wealth themselves overly influenced and swayed by the political clout of the man managing the fund – ie Najib himself?
YB Dato,
Information Regarding Cancellation of Permission to 1MDB Under Exchange Controls Act 1953
We refer to your letter dated March 18, 2016 regarding the above mentioned matter.
  1. Applications for permission under the Exchange Controls Act 1953 (AKPW) (which has been abolished and replaced with the Financial Services Act 2013 [APK]) requires the applicant to present the application to BNM alongside information, supporting documents, detailed explanations regarding the transaction and purpose of transaction. All considerations on applications under AKPW or APK requires BNM to always demand for information and comprehensive information from the applicant.
  1. For applications for foreign investments, the applicant is not only required to complete the relevant documentations (Form 6b, 9A and 9C) online, but the applicant is also required to provide relevant documents and information regarding the proposed investment. Normally, BNM will contact and deal directly with the applicant to obtain the details and purpose of the investment either before or after the application is made. This ensures that BNM has a complete understanding of the proposed investment before a permission can be granted. It also allows BNM to exercise its mandate to protect Malaysia’s balance of payment and value of our currency.
  1. On your question, raised in the letter dated March 18, 2016, […] based on information received from 1MDB following the issuance of instructions under APK and information voluntarily supplied by foreign institutions and authorities, BNM can conclude that 1MDB had received permissions on Sept 29, 2009 (first permission), Sept 6, 2010 (second permission) and May 20, 2011 (third permission) for the purpose of investments abroad, amounting to USD1.83 billion, without providing complete material information, or through misrepresentation of relevant information, for the purpose of [influencing] BNM’s evaluation of 1MDB’s application.
  1. Details of the 3 permissions to 1MDB and information received by BNM can be summarised as follows:
  1. The First Permission was granted to 1MDB to invest, using foreign currency, to acquire a 40% stake in 1MDB PetroSaudi Limited, British Virgin Island (JV Co), amounting to USD1 billion, for the purpose of investments in the energy, agriculture, real estate and tourism sector. BNM had given this permission based on information provided by 1MDB that the funds will be used by the JV Co for the purpose of investments in those sectors and that the investment will bring Malaysia economic benefits.
1MDB had declared to BNM that the USD1 billion was used to acquire a 40% stake in JV Co which would be remitted by 1MDB to the JV Co’s account, maintained with Banca dela Svizzrera Italiana SA, Geneva and that the USD1 billion was a portion of a working capital of USD2.5 billion which will be invested by the JV Co in the abovementioned sectors. On Sept 30, 2009, 1MDB informed BNM in writing that the funds will be remitted to the JV Co’s account maintained in another bank – JP Morgan (Suisse) SA and RBS Coutts Bank Ltd. BNM acknowledged the change in a letter on the same day. However, BNM was informed by Duetsche Bank Malaysia Bhd on the change in recipient of funds to PetroSaudi, BNM stressed that the change must not go against the original purpose of the investments which have been given permission.
BNM realised that USD700 million from the USD1 billion funds that was given permission was remitted by 1MDB to an account owned by Good Star Limited (GSL) at RBS Coutts Bank Ltd and not the account belonging to the JV Co in Switzerland or PetroSaudi’s account. The transfer of funds to GSL was made by 1MDB on behalf of the JV Co to repay the JV Co’s debt of USD700 million which was advanced to the JV Co by 1MDB’s JV partner which is PetroSaudi Holdings (Cayman) Ltd. This material information was not communicated by 1MDB to BNM during the application for the First Permission although 1MDB had prior knowledge and was informed of the JV Co’s debt and had an intention of using a large portion of the funds to repay the debt before the application for the permission was made through BNM.
Apart from the change of recipient of the remittance (from the JV Co) to GSL, 1MDB has hitherto failed to provide any documentary evidence or source documents to demonstrate that the JV Co has invested in the energy, agriculture, real estate and tourism sector, which was the purpose of the First Permission by BNM. During the material time, BNM was persuaded by 1MDB to believe that the funds will be used for the purpose of investments in the energy, agriculture, real estate and tourism sector through the JV Co and will benefit the JV Co.
Based on information voluntarily provided by foreign authorities, the ultimate beneficial owner of GSL is an individual who has no relations to PetroSaudi International Ltd, which is the shareholder of PetroSaudi Holdings (Cayman) Ltd. On May 28, 2015 the Malaysian Anti-Corruption Commission (MACC) and BNM had written to the Attorney-General’s Chambers to seek Mutual Legal Assistance from Switzerland for the purpose of obtaining evidence.
  1. The Second Permission was for 1MDB to provide loans in foreign currency to the JV Co through the subscription of Murabaha Note that was issued by the JV Co amounting to USD500 million (equivalent of RM1.6 billion). The bank had given this permission based on information provided by 1MDB in which the funds amounting to USD500 million will be used by the JV Co to finance a portion of the cost of acquiring a 4% equity stake in a public listed company in France (French Company) which is involved in the generation and distribution of energy. In their application, 1MDB informed BNM that the investment was in line with the strategic mandate given by the Government of Malaysia to 1MDB for the development of the nation’s energy sector.
However, 1MDB has since confirmed that the USD500 million was not used by the JV Co to finance a portion of the cost of acquiring a 4% equity stake in the French Company, as stated by 1MDB to BNM during the application for the Second Permission. In a letter dated May 29, 2015, 1MDB had told BNM that the JV Co had an absolute right to use all funds received from 1MDB. This is a material information that was not revealed by 1MDB to BNM during its application for the Second Permission.
  1. The Third Permission was for 1MDB to provide an additional loan in foreign currency to the JV Co through the subscription of Murabaha Notes that were issued by the JV Co amounting to USD330 million. BNM had provided permission based on information supplied by 1MDB to the Bank, that the USD330 million will be used by the JV Co to finance its oil and gas projects.
However, the funds amounting to USD330 million was transferred to GSL and not the JV Co as previously stated by 1MDB to BNM. 1MDB did not inform the bank of this material information although 1MDB had prior knowledge that the funds will be channeled to GSL and not the JV Co, which is before the application was made to BNM. 1MDB has hitherto not provided any documents and source documents to demonstrate that the JV Co has invested in the oil and gas sectors with the funds agreed by BNM.
The above explanation is our feedback regarding the questions raised by you. We are always ready to provide further explanations regarding the above matters if needed.
Thank you.
Sincerely,
Nor Shamsiah Yunus
Deputy Governor

Did BNM succumb to overwhelming pressure?


Zeti - Did the Governor of the independent Bank Negara have insufficient powers to hold 1MDB accountable?
Zeti – Did the Governor of the independent Bank Negara have insufficient powers to hold 1MDB accountable?
This frank and detailed account raises questions about the robustness of BNM’s own internal checks, when faced with what was clearly an overwhelming political pressure from the Minister of Finance himself.
Clearly, on a number of accounts the bank proceeded owning to deliberate misinformation by 1MDB, including the understanding there would be an injection of a further US$1.5 billion from PetroSaudi into the joint venture as well.
Neither was the “material information” that US$700 million had been tagged as a loan by PetroSaudi onto the subsidiary which it then injected into the joint venture (with a provision for an immediate repayment) communicated to the bank or to the Board of 1MDB.  Again, at the time the second permission was granted, BNM was informed that 1MDB was investing in a French power generation company, which was false.
However, there is no indication that papers were supplied to support the bogus claim by 1MDB nor that once this problem was discovered the matter was actively pursued by the bank until the scandal broke in the media and investigations were launched last year.
Likewise, with regard to the loan for US$330 million, which went straight to Jho Low’s Good Star Limited, supposedly to purchase oil and gas projects, which again never materialised.
Bank Negara documents do show that efforts were made by its regulators to pursue 1MDB for updates on these projects.  
However, their communications were arrogantly ignored or sidelined for many months by the powerfully protected management, who under the secret  Section 117 of the company considered themselves to be working solely and directly to the Minister of Finance, Najib Razak.
The letter below:
Screen Shot 2016-07-07 at 16.23.34Screen Shot 2016-07-07 at 16.24.00Screen Shot 2016-07-07 at 16.24.17Screen Shot 2016-07-07 at 16.24.32

No comments:

 

No comments: