From Apanama

We have known more about 1MDB and the once notorious Cayman Islands in the last one week than in the last one year or so.

We know now that the notorious Cayman Islands also boasts big names and corporate giants, including the HSBC, in their list of clients and fund managers parking their money (in all kinds of currencies) in the offshore financial centre.

Thanks to the sudden realisation that effective communication and proactive media engagement is vital. The price to pay for such lackadaisical attitude must be high.

FYI, all those humungous funds to the tune of billions and trillions are not parked in Cayman Islands physically or in gold bullions. The figures may just appear on computer screens and the attraction to go ‘Cayman Islands’ could just be the tax structure and ‘no questions asked’ framework. Whether this is good or bad is another issue.

Ok, Cayman Island is an offshore financial centre and 1MDB decided to park some big funds there, but why not park the funds in our very own Labuan offshore financial centre? I asked an investment bankers and he shot back ‘ bro, we can’t compare a Myvi to a Mercedes…could we? I rest my case.

Repeated calls (via previous postings) have been made to those who are supposed to be in-charge of the Prime Minister’s communications and the PM himself to come out and explain all about 1MDB before the mud hardens. But all such calls not only fell on deaf ears but those who highlighted the matter were branded as anti-government, anti-Najib and even anti-Rosmah writers and bloggers.

It must be admitted that the ‘dirty’ image 1MDB is trying to vehemently shake off today is there due to the epic failure of the media team. The media team often repeated mantra was about what CANNOT be done and not about how best to explain the situation.

The media team’s failure is blaming the man instead of trying to convince him on the need to be transparent.

I guess this happens when you have one too many yes-man and seat-warmers around you. The least they could have done was to point to Cayman Islands on the map. Many a journalist wouldn’t mind a familiarisation tour, I’m sure.

1MDB’s CSR programmes like community projects in rural Sarawak or how many village heads and JKKK guys were sent to the Holy land was never an issue. Attempts to sidetrack main concerns, by repeatedly highlighting CSR, appeared more like sinister moves to camouflage. A big bulk of the suspicion was self generated, apart from the fact that the auditing job changed hands a couple of times.

Well, its good that finally more information is trickling out about 1MDB, especially often repeated endorsement, validation and explanation as to why Cayman Islands is not all that notorious.

I hope my ex-boss, who would most likely be the scapegoat in 1MDB’s media failure, again, doesn’t get offended coz I’m well aware of his predicament. (… and no, he didn’t ask me to write this 😉 as Datin Seri Rosmah Mansor didn’t ask me to promote her to be the next Prime Minister – as in my recent posting)

BTW, 1MDB chairman of the Board of Advisors decision to take DAP’s Tony Pua to task is indeed a good move.

If Tony Pua is man enough, then this would be another golden opportunity for Prime Minister Datuk Seri Najib Tun Razak and all his men in 1MDB to clear the air once and for all.

Try not to place the burden of ‘communicating’ squarely on the shoulder of the media team again for they may even consider taking the media for a Haj pilgrimage instead of explaining issues at hand.

Note: A gentle reminder to those on media overdrive to unmask Cayman Islands and all those scary stories about 1MDB. Stick to facts and try not to make general demeaning statements against critics. You may end up creating more troubles for the PM. Thank you.

p/s I thought Kancil was smarter

For more on this story go to: http://www.apanama.my/1mdb-cayman-islands-and-our-very-own-kancil/

See iNews related stories with the one we published November 20 2014 “Rafizi to write to Bank Negara, A-G on 1MDB’s Cayman funds” at: http://www.ieyenews.com/wordpress/rafizi-to-write-to-bank-negara-a-g-on-1mdbs-cayman-funds/

Related:

Najib should not set bad example to other Ministers by using threat of legal suit against Tony Pua to evade accountability and should make Ministerial statement to answer teeming questions on 11 aspects of the multi-billion ringgit 1MDB scandal in Parliament on Monday

By Lim Kit Siang for Malaysia

The Prime Minister, Datuk Seri Najib Razak, should not set the bad example to other Ministers by using the threat of legal suit against the DAP MP for PJ Utara Tony Pua to evade accountability and he should make a Ministerial statement in Parliament on Monday to answer teeming questions on 11 aspects of the multi-billion ringgit 1MDB scandal, viz:

1. Why did the Government issue a “letter of support” for 1MDB’s US$3.0 billion (RM9.6bn) bonds issued in Mar 2013 which not only explicitly binds the Government to repay the debt in the event 1MDB fails to do so, but surrendered legal jurisdiction to the Courts of London? Despite the denial that the letter represents an explicit “guarantee”, why isn’t this amount recorded as a Federal Government contingent liability since Malaysia is legally bound to repay the debt in the event of 1MDB default?

2. Why did 1MDB pay an average of more than 10% in “certain commissions, fees and expenses” to raise its loans – US$3.0 billion (Mar 2013) and US$1.75 bilion (May 2012), when other developing nations such as Uruguay pay as little as 0.1% to raise US$2.0 billion? Even Penerbangan Malaysia Bhd which raised US$1 billion recently paid only 0.5% in such fees.

3. Why did 1MDB divert US$1.1 billion of its US$3.0 billion raised by its subsidiary, 1MDB Global Investment Limited to repay the former’s own debt and cover its operating expenses? The “Use of Proceeds” of the US$3.0 billion bond as stated in the investors’ prospectus was to invest in a 50:50 joint venture with Aabar Investment. Additionally US$1.56 billion is parked at an unknown investment fund overseas while the proposed joint venture is still-born after 18 months.

4. Why did 1MDB agree to accept a corporate loan guarantee by International Petroleum Investment Corporation (IPIC) of Abu Dhabi on behalf of 1MDB’s US$3.5 billion of bonds with such onerous terms – 40% security deposit and a 10-year option to acquire 49% of 2 1MDB subsidiaries. The 10-year option is worth at least US$250 million. As a result of the loan’s 5.99% interest, the IPIC guarantee and the 10% of “certain commissions, fees and expenses”, the effective cost of fund to 1MDB for the US$3.5 billion loan is a staggering 13.98%.

5. Why did 1MDB invest US$1 billion in a joint-venture with PetroSaudi in 2009, a company with no track record and dubious origins and subsequently converted the investment into a US$1.2 billion loan, which was subsequently increased to US$1.7 billion? Although 1MDB claimed the loan as been redeemed in full and the proceeds parked in Cayman Islands, it must answer for the risks taken as well as the complete lack of transparency and good governance as these sums were entirely funded by debt.

6. Why did 1MDB invest the US$2.32 billion proceeds from the redemption of Petrosaudi loans in 2013 in an opaque investment fund with Bridge Capital Partners in Cayman Islands, an unknown fund manager with questionable origins and no comparable track record?

7. Why did the Ministry of Finance hastily acquire a 1MDB subsidiary, SRC International Sdn Bhd in March 2012 which has then just received a RM4 billion loan from Kumpulan Wang Amanah Pesara (KWAP) guaranteed by the Federal Government?

8. Why did 1MDB overpay for its power assets – Genting Sanyen (RM2.38bn) and Tanjong Energy (RM8.5bn) which required an immediate impairment of RM1.2 billion out of its recorded goodwill of RM2.6 billion? As a result of the high price of acquisition, The Edge Weekly has estimated an annual return on investment of only approximately 5%, lower than the cost of funds to acquire these companies.

9. Why did the Ministry of Energy, Green Technology and Water reverse it policy of open tenders for new power plants to directly and hastily award a 50MW solar-power plant and a 2,000MW gas-turbine power plant to 1MDB before even the tariffs are agreed upon?

1. Why did the Federal Government sell super-prime land to 1MDB at heavily discounted prices – Bandar Malaysia (RM1.6 billion) and Tun Razak Exchange (RM194 million), allowing 1MDB to revalue their properties by a whopping RM5.22 billion in less than 5 years?

1. Why did international auditing firms – Ernst & Young and KPMG quit their lucrative work with 1MDB in 2009 and 2012 respectively? Why hasn’t 1MDB subsidiaries submitted their financial statements to the Companies Commission despite some being overdue by more than 2 years?

Although the current budget parliamentary meeting is to end on Thursday, 27th November 2014, it will the height of irresponsibility for Najib as Prime Minister, Finance Minister and Chairman, 1MDB Board of Advisers to evade and avoid accountability for the numerous questions that have been raised over the 1MDB scandal and which have not been satisfactorily explained by the Deputy Finance Ministe, Datuk Ahmad Maslan. Najib should in fact arrange for a full debate in Parliament to be held on his Ministerial Statement on 1MDB.

For more on this story go to: http://blog.limkitsiang.com/2014/11/22/najib-should-not-set-bad-example-to-other-ministers-by-using-threat-of-legal-suit-against-tony-pua-to-evade-accountability-and-should-make-ministerial-statement-to-answer-teeming-questions-on-11-aspec/