The spiraling bogeyman story

As it has been the past month or so, 1MDB and Group Executive Director Arul Kanda Kandasamy quite quickly respond to the unsubstantiated allegations and issues brought forth in the sinister connotation to confuse and riddicule the general public.

Media statement issued by 1Malaysia Development Berhad on 23 June 2015

For immediate publication

Asset acquisitions driven by long-term view

1MDB notes a recent Wall Street Journal article suggesting that 1MDB had overpaid for the acquisition of its energy assets. As we have previously stated, we only acquire assets when we are convinced that they represent long-term value, and to suggest that any of our acquisitions were driven by political considerations is simply false.

The fact of the matter is that these claims are a repetition of old allegations that have been driven by political opponents of the Government, including the former Prime Minister Tun Dr Mahathir Mohamad. They have never been substantiated nor supported by evidence, just as Tun Mahathir has never produced any evidence for his claim that RM42 billion was missing from 1MDB, because the reality is that this RM42 billion is debt backed by RM51 billion of assets.

1MDB takes a long-term view of value when entering into transactions; not just for the company, but for the country, as befits our 100% ultimate ownership by the government of Malaysia. The acquisition price we paid was based on this long-term view, as well as advice received from independent valuation advisers, and the prevailing market conditions at the time. On this basis, we believe that the value paid upon asset acquisition – which may have involved a premium in certain instances, as is common when acquiring another business – is commensurate with the existing and future potential of the assets.

It is important to note that since acquiring the first energy asset in 2012, 1MDB has built a leading international independent power producer in Southeast Asia. The portfolio currently comprises 13 power plants in five countries, along with the rights to construct further gas and solar-powered plants. Today, Edra Energy is the second largest independent power producer in Malaysia, and the largest in Egypt and Bangladesh, with additional operations in Pakistan and the United Arab Emirates. In total, it has gross installed capacity under management of 6,619 MW with an effective capacity of approximately 5,594 MW.

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The onslaught will still go on simply because many parties want to see Prime Minister Dato’ Sri Mohd. Najib Tun Razak resign or be toppled through the sinking of the strategic investment company 1MDB.

This is the more sophisticated ‘Malay Spring’, which was funded and planned by organisations all the way up to personalities like George Soros.

After all, almost twelve years ago a statesman proclaimed “The Jews rule the world by proxy”.

Published in: on June 23, 2015 at 14:00  Comments (13)  

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13 CommentsLeave a comment

  1. On civil matters allegations need to be justified, otherwise liable for libel.

    1MDB is a government, public money and citizens’ votes matter. When “reasonable” allegations are made, especially when valid questions are asked, the onus is on those responsible and those interested in the votes to provide the justifications.

  2. Sure… just give blanket motherhood statements. Sophisticated thievery, that is all it is.

  3. 1MDB is Najib’s creation and the non transparency nature of its dealings and operations have now come back to haunt Najib and all involved in 1MDB. The ‘ Phantom of the 1MDB Opera’ is real and will continue to haunt. Many would not believe that outside forces have a hand in Malaysia’s political quagmire. After all Najib relies much on foreign elements like APCO and several other foreign advisers to help him run Malaysia despite the presence of many local talents who could intellectually zapped Najib’s foreign advisers. The whole mess is Najib’s own doing. He has governed poorly. Hence it is not difficult to dislike him and he is one of the most disliked men in Msia right now.

    • Fully agree with you.

      Too many clear lies and contradictions, to underline poor governance.

      This damage is done and permanent, whatever cover-up can be manufactured in next few months.

  4. Not even in US, do one find business dealing to be transparent. There must be some form of confidentiality.

    For a sovereign fund, its transparency must follow the structure. 1MDB is owned by Government so it could only be completely transparent to the Government stakeholders.

    It is unrealistic for public to know EVERYTHING!

    • Betul. Tapi mesti di kasi tahu yang relevan.

    • Literally, the Government are the stakeholders. Otherwise, the rakyat who the Government represent. Big stakes – the votes.

      Gnerally, when no suspicions of hanky panky, when shareholders – even the ones holding just 1-2 shares – get dividends and capital appreciation, ok. 1MDB – nyet, zilch. Instead, massive debts.

      There was talk of emails of PetroSaudi and/or relevant others were hacked and quite a lot of the Sarawak Report allegations sounded plausible.

      When Tun Dr Mahathir weighed in with very pertinent questions, even the average rakyat becomes interested and wants to know. 1MDB and Najib kept quiet, now blown into a huge scandal.

    • When the US energy giant Enron imploded into a huge scandal, among the reasons given were: political cronyism, greed, shady business, conflict of interest between the two roles played by Arthur Andersen (the audiitors), etc, etc.

      At first nobody knew, nobody complained. Everybody accepted the auditors’ report every year. Yet Enron went bankrupt.

      Here, 1MDB had sacked their auditors during the years of intensive business activities, one audit firm did the audit work only a few months, then told to pack off, replaced by another. People like TDM must have known about these. Confirmed by the PAC last week.

      So, inevitably, questions were asked, suspicions grew whether the auditors were replaced because they were asking penetrating questions on shady deals or unfair rates, unverified valuation, unjustified payments, etc. Under these circumstance, the public need to know a substantial amount of things.

  5. this is such a STUPID statement from 1MDB. Any junior corporate finance guy will know that a value of a concession asset is totally based on its discounted net present value of its cashflow. How much value of net cash left in Genting Sanyen? RM2.3 billion for a 75% equity. Even after 10 years extension the IRR for 1MDB’s investment will not be more than 7%. Considering their cost of fund 6.7%. This is a Big Time shitty deal.

    And Genting is laughing all the way to the bank with RM1.9 billion EI profit. Go fu*k your bitch if you say this ain’t a fraud!

    • “….value of a concession asset is totally based on its discounted net present value of its cashflow. How much value of net cash left in Genting Sanyen? RM2.3 billion for a 75% equity. Even after 10 years extension the IRR for 1MDB’s investment will not be more than 7%.”

      Correct.

      Also, there is no such thing as “the Government are the stakeholders and only they need to know” because the money ultimately is held in trust for the rakyat.

      That also applies to TH & FGV.

  6. Arul tu loyar. Dia tak consult ka?

  7. 1MDB keep on saying that “Tun said that RM42 Billion was missing” bla bla bla…

    Saya tak pernah terbaca bila pulak Tun kata RM42 Billion missing.

    Tun knew, like all of us do, that RM42Billion was debt that was amassed. You also confirmed a number close to that in one of your charts.

    Then Tun did a small back of envelope calculation, like my kids can do too, that the RM42 Billion hutang somehow does not match the monies paid for all the assets declared. And something like RM27 Beliyon was not accounted for.

    Jawab la yang tu ! Boleh ke ?

    As for the assets now worth RM 51 Billion, wow how come interest payments pun tak terbayar.

    Alllo bro, MOF just lend u money and that is money from our pockets, the people. Hormat sikit lah rakyat Malaysia dengan jawapan yang terang sikit. Bukan auta you know who.

    Kalau betul lah asset tu dah pun bernilai RM51 Billion, why not we just liquidate NOW. Tak perlu bayar interest lagi. We do not need this kind of business putar belit lagi.

    Oh no.. dont tell us it is in 52 beliyon ‘units’ later…

  8. Poor BD

    Brick and Rocky also tried very hard to defend 1MDB. All 3 bloggers used to have much credibility in the past.

    But lately these bloggers were perceived to be trying to “tegakkan benang yang dah basah” over 1MDB.


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