(Comments by Sarawak Headhunter in red)
(The Star) – Allegations on 1MDB ranging from Terengganu oil almost
being used as collateral and Tabung Haji deposits used as a bailout to
claims that investment returns went into controversial businessman Jho
Low’s accounts have all been answered.
ALL
the answers are merely recycled bare denials, as if anyone and everyone
must take 1MDB's word for everything. 1MDB has absolutely no
credibility left and this book is a feeble attempt at shoring up its
rotten foundations.
A book titled Siapa Kata Tidak Dijawab (Who Says It’s
Unanswered), in explaining the Terengganu issue, said that in 2009,
discussions between the federal and state governments were held over the
issue of contribution of each party to Terengganu Investment Authority
(TIA) where the initial plan was for it to have a paid-up capital of
RM11bil.
“In September 2009, TIA became a federal agency and was renamed 1MDB.
Therefore, there is no issue of 1MDB trying to use the state’s oil and
gas as collateral,” it said.
There
is no question of using the state's oil and gas as collateral, since
these are all vested in Petronas, rightly or wrongly. There was probably
a half-cocked idea to use Terengganu's royalty share from oil and gas
as collateral or leverage (such as by capitalising future earnings, like
Daim did with the future toll revenues of PLUS), thus enabling the
immediate "unlocking" of billions of ringgit of future revenue.
Since
the state government, who had rights to the royalty, would have been
averse to the idea, having no control over those revenues and
potentially losing out in the future, this idea probably had to be
aborted.
So of course now there is no such issue. But it certainly would have been an issue at the time.
The book also explained that the purchase of land by Tabung Haji was
not a bailout, pointing out that discussions to buy a plot of land at
Tun Razak Exchange went on as early as 2013 and that Tabung Haji was
interested as the company wanted to be involved in the development of an
international financial hub.
What
happened to this so-called "international financial hub"? Has that also
been aborted or merely waiting for the bailout of 1MDB to take place?
Given 1MDB's present dire position, everything that it does which
involves other government agencies such as Tabung Haji could rightly be
categorized as a bailout, irrespective of the actual intentions of
Tabung Haji.
It clarified that Tabung Haji did not buy the lot to develop
“Signature Tower” but had bought a lot – at a discounted price of
RM2,860 per sq foot and located at a prime area in TRX – to develop some
serviced apartments.
This
raises more questions than answers. What has the development of
serviced apartments got to to with the avowed interest of wanting "to be
involved in the development of an international financial hub"?
What price did 1MDB buy the land for? Is the price really at a discount if it is above the current market value?
In the book, it was also denied that any money from 1MDB had gone
into Low’s accounts or that of any third party, after PetroSaudi
returned US$2.318bil to the company which comprised initial investment
of US$1.83bil and US$488mil in revenue.
Show
then where the money actually went to. Mere denials are insufficient.
What happened to this money that had purportedly been returned? Where
did it go to and in what form is it now?
“1MDB received a short-term loan of RM950mil from the Government in
March. This was needed while waiting for asset monetisation to be done,”
it said on why the company needed government help.
When
will this "asset monetisation" take place and in what form? Why doesn't
1MDB have sufficient cashflow to meet it current obligations? Isn't
this a classic case of insolvency? In spite of denials, isn't this RM950
million loan also a bailout?
On why it needed a rationalisation plan, it was explained in the book
that this was important to drastically reduce 1MDB’s debts and to
ensure its business plans in the energy and real estate sectors could
proceed.
Why
is such drastic reduction of 1MDB's debts even necessary if in the
first place it had been properly incurred? Can its business plans really
be "rationalised" now if there was something wrong from the start? What
is really wrong with 1MDB? Can its purported "rationalisation plan"
save 1MDB? Wasn't 1MDB rational to start off with?
Under the rationalisation plan, the company will merge its
activities, increase corporate administration and monetise its assets to
reduce debts.
How
is such "monetisation" of 1MDB's assets going to reduce debts without
incurring more debts? Will it be another case of digging a bigger hole
to cover up an already big hole?
“To date, the plan has shown success where the company’s debts had
been reduced by RM3.6bil. A deal with International Petroleum Investment
Company (IPIC), our Abu Dhabi-based partner, will reduce another
RM16bil from the debts,” it said.
Will
the terms of this deal be in favour of 1MDB or IPIC? Will it be
sufficient to save 1MDB or merely to buy time? Does this deal require
any government guarantees? Will this deal be disastrous like all its
other deals? Why is 1MDB not being open about its deals? What have they got to hide? Dp they really even have a deal at all?
See also Sarawak Report: "Binding Agreement" or "Engaged In Discussions"? - 1MDB's Multi-Billion Dollar Muddle http://www.sarawakreport.org/2015/08/binding-agreement-or-engaged-in-discussions-1mdbs-multi-billion-dollar-muddle/
See also Sarawak Report: "Binding Agreement" or "Engaged In Discussions"? - 1MDB's Multi-Billion Dollar Muddle http://www.sarawakreport.org/2015/08/binding-agreement-or-engaged-in-discussions-1mdbs-multi-billion-dollar-muddle/
On the development of TRX, a joint venture with Australian company
Lend Lease was signed in March to develop 6.8ha of land and Indonesia’s
Mulia Group had purchased land to build “Signature Tower” at RM665mil,
while for Bandar Malaysia, 1MDB received proposals from over 40 local
and international companies and an independent consultant was appointed
to conduct a feasibility study for plots of land in Air Itam in Penang
and Pulau Indah in Klang.
Until
the terms of all these deals are clear, there is no assurance that any
or all of them in their entirety can save 1MDB from becoming a collosal
disaster and burden on the government in particular and the Malaysian
economy in general.
The book said that although 1MDB was facing challenges, concrete
steps had been taken to ensure that the company achieved its objectives,
settled its debts and the Government and people benefited from
programmes outlined by it.
Of
course, this could all be wishful thinking. Burial in concrete is a
hallmark of the mafia. The Malaysian people await with bated breath.
Al Tugauw
Sarawak Headhunter
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