It’s just a ‘war of perception’: in one stroke, Najib dismisses still missing RM2.6 BIL, Cayman ‘Units’

From Malaysia Chronicle

The opposition had an advantage in the war of perception over 1Malaysia Development Berhad (1MDB) all this while as they lied, said Prime Minister Datuk Seri Najib Razak tonight.

He expressed confidence that the explanation given by 1MDB president Arul Kanda Kandasamy on Friday to student representatives had clarified the actual situation about the state investor.

“He has already explained, this is a war of perception. The reality is different. We have listened to the explanation given.

“It is now clearer, the solution is there, it is still not lost. The assets are there. A company from China is buying (the asset) at RM17 billion. It can be solved,” he said.

“So if we understand all this, we will not be carried away. Because, they (the opposition) want to fight us through the war of perception.

“If we present facts, they will lose. If we use logic, they will lose. If we use rational, they will lose. They do not fight using facts, they use lies,” said Najib at the National Undergraduates Leadership Conference in Kuala Lumpur.

Najib said Umno’s stewardship of Malaysia was a “success story.”

“Under Umno we can see the country continues to develop and move forward. We are far from being a failed state. Malaysia is a success story which we can all be proud off,” he said.

As a results, Malaysia now competes with developed economies and the desire not to lose to developing economies like Vietnam which had signed the Trans-Pacific Partnership.

“Our competitors now are Korea, Europe and other developed countries. That is why we must tell ourselves we can succeed” he said.

“If Vietnam is brave to join TPP, surely Malaysia is brave enough to do the same. Don’t tell me we are only good at cheering.”

TPP is a US-led trade initiative which has 12 members, including Malaysia.

All have agreed to the pact but individual members are yet to ratify it.

US President Barack Obama believes the pact has the strongest anti-corruption standards compared with any other trade deal. – TMI

IMAGE: PM Najib

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Related story:

Who is lying now, Najib? – Sir Wenger Khairy

From The Malaysia Insider

Prime Minister Datuk Seri Najib Razak has called those opposing 1Malaysia Development Berhad (1MDB) liars because the explanation given by the state-owned investment arm president Arul Kanda Kandasamy had clarified the actual situation.

Najib said that was because a Chinese company had agreed to buy over 1MDB’s subsidiary Edra Global Energy’s assets at RM 17 billion (RM9.8 billion in cash, RM7.2 billion in assumed debts).

I take offence to that because perhaps Najib has listened to too much spin and numbers, he might be confused between fact and reality.

So let me try to help him, over here.
It seems quite a daft statement to make considering that through the sale, 1MDB would sustain a holding period loss of about RM 2.5 billion – because the price of RM9.8 billion is less than the price of RM12.5 billion to RM12.8 billion paid for the initial equity.

It is less than the difference between the interest cost of approximately RM1.4 billion paid and the dividends of RM2 billion received.

When US$1.75 billion (RM7.36 billion) was raised to finance the acquisition, another RM1.75 billion lost is sustained because as Tun Dr Mahathir Mohamad has quite aptly said, “you lose RM1 for every US$1 borrowed” due to the deprecation of the ringgit from RM3.2 to RM4.2 to a US dollar as it trades currently.

So how does losing RM 3.75 billion on the Edra transaction actually amount to anything to boast about?

But even that was beside the point because the Edra assets were tangible power stations in Malaysia and some desalination plants around the world. Everybody knew they existed – you could even go and throw stones at the plants if you wanted to.

The issue with Edra was that 1MDB overpaid, which was now proven. Adding to that, they foolishly created a mismatch in currency exposure by borrowing in US dollars for a ringgit asset.

The issue with the proceeds from the so called “redemption” of the investment in Petrosaudi International is another matter. It is in the form of mythical units invested through a Cayman Islands vehicle by a fund manager now being investigated by the Australian Securities and Investment Commission (Asic).

The total amount was supposed to be US$2.3 billion – but we have been given the complete run around as to whether this amount represents cash or units, whether it has been redeemed, sold or sold with payment deferred or now held as an asset for a debt for asset swap.

Perhaps the prime minister can set this straight – where is the Cayman Islands money? Maybe the answer to that will also help answer what happened to the US$$700 million – of course, only if the answer is not “sub judice”, or even as the Americans would say, “the right to plead the Fifth”.

And in the meantime, perhaps Najib could gently nudge 1MDB to update their debt figures.

RM42 billion was the interest bearing liability as of March 31, 2014. It is now December 2015 – a more recent estimate of 1MDB’s total debt is perhaps the least that he can do, since 1MDB now claims it argues based on “facts.” – December 7, 2015.

* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insider.

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