A Bridge Too Far

The bridge over troubled water is now secured and the traffic for the path is opened, to move on and forward as the storm subsided and the sun is here.

 Bloomberg story:

Abu Dhabi Debt Deal to Help Clear Path for Malaysia Election

by Pooi Koon Chong

Mon Apr 24 2017 05:00:01 GMT+0800 (MYT)

Mon Apr 24 2017 14:09:10 GMT+0800 (MYT)
Malaysia said to reach agreement with Abu Dhabi over 1MDB spat
Country must hold general election by around middle of 2018
Malaysia Said to Reach Agreement With Abu Dhabi over 1MDB
Barely two years after he was engulfed in a scandal over a Malaysia state fund, Prime Minister Najib Razak is set to clear another hurdle to putting the furor behind him and calling an early election.
Malaysia is said to have agreed to pay Abu Dhabi $2.5 billion as a partial debt settlement for 1Malaysia Development Bhd., in a deal that’s expected to be announced on Monday on the London Stock Exchange.
The initial resolution of the dispute with Abu Dhabi over the finances of 1MDB could help Najib move toward closure on a scandal that at one point raised questions about his ability to hold onto power.

Instead, with an election due by mid-2018 but potentially coming this year, Najib’s grip on power is at an all-time high, said Oh Ei Sun, a senior fellow at the S Rajaratnam School of International Studies and former aide to the prime minister.
The rural Malay voters who form the support base of Najib’s ruling United Malays National Organisation are very “forgetful and forgiving” and may have put the financial woes surrounding 1MDB behind them, Oh said. The prime minister already moved to consolidate his power in a party purge last year.
The brainchild of Najib to attract foreign investment, 1MDB accumulated billions of dollars in debt after its 2009 inception and is at the center of multiple investigations from the U.S. to Singapore in relation to alleged corruption and money laundering. A Malaysian parliamentary committee identified at least $4.2 billion in irregular transactions. Najib and 1MDB have denied any wrongdoing.
“Urban Malaysians are frustrated because they are still angry, but they can do basically nothing about it,” Oh said. “All these years, Najib has assiduously built up UMNO’s support base in rural areas. Rural constituencies will determine the next election” outcome, he said.
Under the deal with Abu Dhabi, Malaysia will also assume the coupon obligations for two dollar bonds issued by 1MDB and co-guaranteed by Middle Eastern sovereign wealth fund International Petroleum Investment Co., a person familiar with the matter said on Saturday. The countries agreed not to pursue legal action before December 2020 as they negotiate a dispute over $3.5 billion linked to the bonds, the person said.
1MDB and IPIC were locked in a tussle that spilled over to repayments on two sets of bonds issued by the Malaysian fund that led to a default in April 2016. The agreement will remove a key hurdle for Malaysia amid investigations from the U.S. to Singapore, Hong Kong and Switzerland into alleged money laundering and embezzlement linked to 1MDB.
The furor over 1MDB, alongside hundreds of millions of dollars that appeared in Najib’s bank account before the 2013 election, set off the biggest crisis for Najib during his time in office. Former Deputy Prime Minister Muhyiddin Yassin and Mukhriz Mahathir, the son of ex-premier Mahathir Mohamad, were expelled from UMNO last year.
Still, Mahathir, who has led a campaign to get Najib out of office, has struggled to lure Malay voters to a new party he has set up. Najib further bolstered his position this month by giving an extra role to his cousin, Defense Minister Hishammuddin Hussein, appointing him a minister with special functions under the prime minister’s office.
With the opposition group fractured by infighting over policies and how best to challenge Najib, the governing Barisan Nasional coalition led by UMNO is predicted by analysts including Wan Saiful Wan Jan, head of the Institute for Democracy and Economic Affairs, to at least retain its parliamentary seats in the next election.
Still, lingering questions over 1MDB may come back after the vote, Wan Saiful said.
“Najib’s position as a prime minister going into the election is confirmed, it’s secured, there’s no question about that,” said Wan Saiful.
“The real problem with 1MDB is it raises the question what will happen to Najib after the election,” he said.

“After the election when the party is a bit more secure, they are more comfortable in their place, UMNO is back in government — they will start thinking: now we have five years to deal with any problems that arise, maybe it’s time to think about whether Najib can continue to lead UMNO or not.”

https://www.bloomberg.com/politics/articles/2017-04-23/abu-dhabi-debt-deal-to-help-clear-najib-s-path-for-malaysia-vote

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Fourth Prime Minister Tun Dr. Mahathir Mohamad used this liquidity issue of 1MDB in serving financial commitments due to ‘mismatch’ commercial problem to openly attack Prime Minister Dato’ Sri Mohd. Najib Tun Razak twenty five months ago and made it scandalous.

It was the basis against many other failed excuses to get Prime Minister Najib ousted from office as the Prime Minister and UMNO President.

Dr. Mahathir escalated the charges against Prime Minister Najib in the strategy of demonisation, in cohort with New Con Jewish controlled foreign media such as Sarawak Report, Wall Street Journal and New York Times and Malaysian Opposition.

Part of the strategy was Dr. Mahathir’s minions to make ‘reports’ to various authorities all over the globe with the excuse of “Embezzlement of state funds, money laundering and severe corrupt practices and kleptocracy”.

Example is when US Attorney General Loretta Lynch announced ‘high powered US authorities investigations’ at the DoJ July last year.

However, new compelling evidence is suggesting that Lynch’s announcement was an extension to the drama, as a consequence of hyped stories by Dr. Mahathir’s minions.

It has been a quarter of a year since the ‘shocking announcement’ by such then the powerful US Law Enforcement official and yet there is no practical progress of DoJ “Returning the monies and assets amassed to the people of Malaysia”.

The 1MDB-IPIC spat matter being solved perhaps provide the much needed proof that the matter was about commercial issues to start with.

Never the less, at large Malaysians are no longer interested with the matter as a political excuse for regime change in the next GE because it has gone far too technical beyond their comprehension and dragging the matter on is almost like trying to feed with a rotting carcass.

Politically, Prime Minister Najib position is more strengthened now especially with lots of people issues have been and are being resolved and seen to be worked on.

The party is strong rallying behind him and he is even forging relations with Dato’ Seri Hj Hadi Awang and PAS.

Prime Minister Najib’s  recent successes in invoking mega projects for socio-economic development such as the free-from-toll Pan Borneo Highway, Saudi Aramco RM7 billion investment in RAPID, tens of billion RM in investment and commercial deals with China and India, is providing the boon for confidence in strategic economic management.

On the other hand, Dr. Mahathir who is seen as Prime Minister Najib’s sharpest opposition has self-proven of his inconsistencies, contradictions and gross indecisiveness in trying to win.

The Oppositions’ serious disarray like the rebellion within DAP, infighting for turf control within PKR, the break up of PAS and now splinter group PAN is without strong grassroots, is more glaring.

That factored in with the alliance of Dr. Mahathir’s new party Pribumi Bersatu and the notion of trying to get party president Tan Sri Muhyiddin Mohd. Yassin to be the next prime minister if and when Pakatan Harapan wins majority in the next GE, is more like Russian Roulette.

Regardless, the bridge over troubled water was far and Prime Minister Najib persevierence and resilience managed to steer despite strong undercurrents and faced many storms along the way. Finally the crossing is made.

Prime Minister Najib’s current position should be likened to British Prime Minister Theresa May, exercising carpe diem and called for a June general election three years ahead of time, to get a mandate of her own. Her primary agenda is  to steer her nation forward and do more important work.

Like the 1977 film of the same title about Operation Market Garden based on the book by Cornelius Ryan, the fight for Arnhem bridge by British 1st Airborne Division under Maj. Gen. Roy Urquhart was a bloody one.

The many elements that which proven under the ‘Murphy’s Law’ for Gen. Bernard Montgomery’s not-so-well-planned military operation, was a milestone in the liberation of Holland from occupation by Nazi Germany.

Never the less, the tactics of combining the airborne infantry with mechanised calvary and armour divisions were then a remarkable battle strategy, where in the end prevalent in the objective.

This is a good gift for Israq Mikraj, to commemorate prophet Muhammad SAW’s ascension to the heavens and personally talk to Allah SWT, fourteen hundred years ago.

*Updated 1645hrs

The media statement by 1MDB on the most recent development on the disputed investments and monetisation with IPIC:

Media statement by 1Malaysia Development Berhad

Issued on 24 April 2017

For immediate publication

Settlement of Arbitration Proceedings and Monetisation of Investment Fund Units

We are pleased to confirm that 1MDB and IPIC have agreed on a settlement of the arbitration proceedings at the London Court of International Arbitration.

As per the settlement, 1MDB will, amongst others, make certain payments to IPIC and will assume responsibility for all future interest and principal payments for two bonds issued by 1MDB Group companies due in 2022.

These obligations will be met by 1MDB, primarily via monetisation of 1MDB-owned investment fund units. 1MDB is pleased to confirm that a first tranche monetisation of approximately US$50 million has been received, in cash.

This arbitration settlement and monetisation of investment fund units represents the resolution of a significant challenge, and is a major part of the 1MDB rationalisation plan, which is now at its final stages of conclusion.
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The announcement made at London Stock Exchange by IPIC:

RNS Number : 1128D

IPIC GMTN Limited

24 April 2017

 START

International Petroleum Investment Company PJSC (IPIC), Aabar Investments PJS (Aabar), the Minister of Finance (Incorporated) Malaysia (MoF Inc.) and 1Malaysia Development Berhad (1MDB) are pleased to announce that an agreement has been reached between all parties that provides for a settlement in respect to the arbitration proceedings at the London Court of International Arbitration (the Settlement).

The agreement is conditional on the Arbitration Tribunal making a consent award by 31 May 2017.

Under the terms of the Settlement, IPIC will receive an amount of US$602,725,000 by 31 July 2017 and a further amount of US$602,725,000 by 31 December 2017.

Separately, 1MDB and MoF Inc., undertake to IPIC to assume responsibility fory all future interest and principal payments under the two bonds issued by 1MDB Group companies that are guaranteed by 1MDB and IPIC; (i) US$1,750,000,000 fixed rate 5.75 per cent. notes due 2022 issued by 1MDB Energy (Langat) Limited and (ii) US$1,750,000,000 fixed rate 5.99 per cent. notes due 2022 issued by 1MDB Energy Limited.

The parties have provided suitable undertakings and indemnities in respect of the performance of obligations under the Settlement.

The parties have also agreed to enter into good faith discussions in relation to payments made by 1MDB Group to certain entities.

STOP

This information is provided by RNS
The company news service from the London Stock Exchange

END

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This recent development validated Second Finance Minister Dato’ Seri Mohd Johari Abdul Ghani’s recent answer during the Finance Minister MQT in the recently concluded Dewan Rakyat sitting.