1MDB’s questionable transactions




10 things 1MDB should disclose

QUESTION TIME Perhaps, just perhaps, 1Malaysia Development Bhd or 1MDB does not understand what it needs to do to convince the public all is well with it. To help it along, here are 10 things that we feel our national self-styled strategic development company can do to soothe frazzled nerves and convince us Malaysians our money is safe.

CIMB Group chairperson and the prime minister’s brother Nazir Razak is not the only one who has been urging 1MDB towards greater disclosure, but he does make some pertinent points.

“I have no solution to it (IMDB) but I think we probably should know – disclose what needs to be disclosed in order for people to have a full picture and allay their worst fears.

“I just said it’s something that’s there, everyone is concerned about it, so you need to allay concerns. Put concerns to rest, that is all,” he told a press conference recently.

Considering that 1MDB continues to assert that everything is okay it really should not take too much for it to allay public concerns over how it started, raised money, invested, its links to various businessmen, etc.

But in case it is stuck for what to disclose, we give below a checklist of 10 things, which will be good place to start. And like Maria said in ‘The Sound of Music’, “Let’s start from the very beginning, a very good place to start.”

Some background first. Let’s extract 1MDB’s mission and vision statement from its website. Mission: A strategic enabler for new ideas and sources of growth. Vision: To drive sustainable economic growth by forging strategic global partnerships and promoting foreign direct investment. It’s a self-styled strategic development company, as described by its latest CEO, its third.

Now let’s look at its business. Property development at two prime sites acquired cheaply from the government – the Tun Razak Exchange (TRX) and Bandar Malaysia. And Energy; buying over established Malaysian power companies, Tanjong Energy, Genting Sanyen and Jimah Energy. And, that’s it.

Next a quick look at its financials from its annual reports: assets of some RM51 billion, liabilities of RM48 billion, borrowings of RM42 billion (RM46 billion if we include some forms of payables which look like debt) as at March 31, 2014. If not for revaluation of properties – acquired cheaply from the government – by some RM4 billion over the years, it would not have made profits at all.

Onwards to Jho Low, the whizz-kid (who may no longer be much of a kid any more) billionaire who has so much influence over 1MDB decisions, according to e-mail revelations by Sarawak Report which have not been denied by 1MDB yet and whose companies reportedly received at least US$1 billion from 1MDB.

The other development from Sarawak Report is that some US$1.1 billion in 1MDB’s funds from Cayman Islands, said to be kept in Singapore, may not be there because the records for those are said to be falsified.

That should be enough background. On to what 1MDB should be disclosing

Apr 29, 2015 – Malaysiakini
By P Gunasegaram
10 things 1MDB should disclose


The fables of GST according to Ahmad Maslan

GST WATCH: Deputy Finance Minister Ahmad Maslan is at it again. This time accusing traders who raise prices as being pro-opposition and out to tarnish Barisan Nasional.

“Traders who support the opposition will not lower prices and without ethics they stoke public anger because the Goods and Service Tax (GST) is a Barisan Nasional government policy,” he posted on Twitter.

Is there any empirical survey to support the notion that pro-opposition traders are the ones increasing prices? Or do these traders merely exist in the psychedelic fantasies of a delusional court jester out to save a sinking ship.

The simplistic notion that GST is better than Sales and Service Tax (SST), all because the tax rate is lower is simply wrong. At 6%, GST may seem lower than the 10% SST, but GST is a multi-level tax, that taxes the whole supply chain whereas SST taxes the end-consumer alone.

With GST, everything is taxed unless specifically mentioned as being exempted, while SST only allows tax for items that are stated as taxable. See the difference?

GST has a wider reach, allowing the government to draw in more income at all levels of society.

The notion that all products would be cheaper by 4% is false, because this line of thinking does not take into account the multilevel nature of the GST taxation structure.

Imports from overseas are GST-free, but the moment they enter Malaysia and get transported within our borders, GST applies. And as these goods change hands, GST is applied at every interchange. And ultimately the consumer has to pay the final 6% which is calculated after factoring in all overhead costs.

Can Ahmad Maslan assure us that there was an intentional reduction of cost throughout the supply chain, so that the eventual price of the item is reduced by 4% upon reaching the consumer?

Did the traders ethically decided to do business on a deficit by not taking a profit when the item changed hands throughout the supply chain?

Ahmad Maslan is explaining away a taxation system without taking into account the fundamental reason people do business – to make a profit. At every stage of a supply chain, profit has to be made or else it will drive many out of business.

Complex supply chains would inherently drive prices higher, take for example the construction industry. The supply chains that come together to construct a house would be levied the GST tax at every juncture. And even though the physical house itself may not be levied tax, the contributing push from the cost of production would drive the final selling price of the house up.

The compounded nature of the GST tax itself would offset the fabled 4% discount Ahmad Maslan so proudly proclaims.

So is it really pro-opposition traders who keep prices up?

The very nature of the GST taxation system itself is driving prices up. And traders who supply the eventual consumer are on the receiving end of a supply chain that is forced to pay 6% in tax and still make a profit. Eventually the cost of doing business – overhead and taxes – is passed onto the consumer.

In the end, can any sane person say that GST is good for a nation? A nation already struggling with a dipping economy, low wages and confused ministers who continually insult the intelligence of the very people that suffer under that tax.

The fables of GST according to Ahmad Maslan
29 April 2015 – theantdaily.com


Rafizi: Dr M not interested in ‘best man’

Among Umno leaders, Tengku Razaleigh Hamzah is the best candidate to replace Prime Minister Najib Abdul Razak if Dr Mahathir Mohamad is successful in his campaign to oust the latter.

But is the former premier interested in appointing a leader who has the interest of the nation at heart?

PKR vice-president Rafizi Ramli pointed out that Mahathir’s agenda is rolling on a different track, one that is crooked rather than straight as the “naive” Zaid Ibrahim believes.

“Mahathir has no interest in appointing the fairest among the ranks of Umno to be the next prime minister.

“To him, it is not about putting a leader who can serve the people. That is not in the equation.

“It is about putting someone as prime minister who can take orders and safeguard his as well as Umno’s interests,” he told Malaysiakini.

On that note, Rafizi said Zaid, who has called on Mahathir to name Tengku Razaleigh instead of Muhyiddin Yassin as Najib’s successor, was being politically puerile.

However, he agreed with Zaid that Tengku Razaleigh, who is fondly known as Ku Li, is a cut above the rest in Umno.

“Ku Li was out of power when corruption went out of control during Mahathir’s time. He was sort of shielded from this,” he said.

He also pointed out that the administration in the 70s had a semblance of democracy and rule of law.

“So Ku Li definitely has a greater sense of fairness and rule of law,” he added.

Therefore, Rafizi said, lawmakers with a conscience should not rule out Tengku Razaleigh, but to realise the prospect of the latter becoming prime minister would require courage.

“It can only happen if Ku Li gets the support of component parties in BN and if MPs in Sabah and Sarawak dare to defy Umno.

“Expecting Umno to do it (putting Tengku Razaleigh in the top post) is extremely naive,” he stressed.

Apr 27, 2015 – Malaysiakini
Rafizi: Dr M not interested in ‘best man’


Another US$330 million went to Jho Low, says Sarawak Report

A US$330 million (RM1.18 billion) loan 1Malaysia Development Berhad (1MDB) had issued to PetroSaudi International in 2011 was actually deposited into the account of Good Star Limited, a firm controlled by businessman Low Taek Jho, whistleblower site Sarawak Report claims.

The money was transferred in four separate tranches into Good Star Limited’s RBS Coutts, Zurich account, said Sarawak Report, citing documents from official investigators.

However, approval had only been granted by the regulators for 1MDB to lend the money to its former joint venture partner, PetroSaudi, on the basis that it was to “finance on-going overseas investment in the oil and gas sector”, said Sarawak Report.

It said the rational for the loan approval was “to pursue a strategic and global partnership in the energy sector and promoting foreign direct investment into Malaysia”.

There was no mention made of the company Good Star Limited in the loan application and neither was approval granted for the money to be sent to it, said Sarawak Report.

The investigation also revealed that the USD$330 million, which was sent to Good Star Limited, was officially reported to Bank Negara as having been paid to the PetroSaudi company 1MDB PetroSaudi, it said.

“The question now is who was responsible for providing this misleading information that Good Star Limited was a subsidiary company of PetroSaudi International,” Sarawak Report said.

“Also, why did none of the banks involved in any of these transactions ever see fit to file a suspicious transaction report?”

According to the website’s calculations, USD$1.19 billion of the USD$1.93 billion that 1MDB lent to PetroSaudi ultimately went to Good Star Limited.

Another US$330 million went to Jho Low, says Sarawak Report
26 April 2015 – TMI


Fortifying authoritarian rule in Malaysia

The current session of the lower house (Dewan Rakyat) of the Parliament of Malaysia has just adjourned until mid-May. During that session, international attention focussed mainly on two issues, both of which entailed tension within, and possibly the collapse of, the Pakatan Rakyat (“PR”) Opposition alliance: the fate of jailed Opposition leader Anwar Ibrahim, now serving his second sentence for “carnal intercourse against the order of nature”; and the possibility (now postponed) that the federal Parliament, at the insistence of PAS, the Islamic opposition party and PR component, would legislate to permit hudud punishments (including amputation, stoning and crucifixion).

Less attention was given at the time to the passage through the Dewan Rakyat of laws that clearly demonstrate renewed efforts to entrench authoritarian rule in Malaysia, although that is now changing. When placed alongside the authorities’ palpable disregard for existing legal protections for citizens who engage in democratic criticism and dissent, as we see in the crackdown on Malaysians who express dissatisfaction with Anwar’s conviction, it now seems that Malaysia is experiencing not just a return to rule by authoritarian laws, after a brief but perhaps illusory respite, but also rule by authoritarian lawlessness.

Three and a half years ago, to widespread amazement and acclaim, Malaysian Prime Minister Najib Razak (PM Najib) announced his government’s intention to put Malaysia more firmly on the path to democracy and respect for human rights. He proposed to do this by ending the legal fiction that Malaysia was in a state of emergency, and repealing the draconian laws that had caused Malaysia to feature so often at the lower end of international human rights rankings. To that end, amongst other legislative measures, from September 2011 to the middle of 2012 his government did the following. It repealed the Internal Security Act (“ISA”), which had permitted detention without trial and had often been used against legitimate political opponents rather than suspected terrorists, and replaced it with the Security Offences (Special Measures) Act (“SOSMA”), a law that substituted preventive detention with a shortened period of investigative detention followed by either a criminal trial or release of the suspect, and specifically provided that no one could be arrested solely for political belief or activity. The government liberalised print media laws by removing the requirement for annual renewal of newspaper licences that had contributed so much to self-censorship, and by restoring the power of the courts to review government decisions to revoke or suspend printing and publication licences. And it replaced the section of the Police Act that mandated police permission (rarely granted to government critics) for public gatherings with a Peaceful Assembly Act (“PAA”) that purported to recognise and regulate the constitutional right to freedom of assembly. There was also some relaxation of the laws prohibiting student politics.

In July 2012 PM Najib also promised to repeal the Sedition Act – feared by Opposition politicians, journalists, social activists and progressive lawyers because of its nebulous definition of “seditious tendency” and the government’s well-documented proclivity to use it to silence unwelcome criticism – with a more benign sounding “National Harmony Act”.

Malaysian’s initial enthusiasm for PM Najib’s reforms soon turned to disappointment and then shock and condemnation. The more hard-line Malay-supremacists within his own United Malays National Organisation (“UMNO”), and the assorted ethno-nationalist and Islamist vigilante groups that hover on the fringes of the party, lamented the loss of the ISA and openly speculated that without preventive detention and the Sedition Act, there would be no way to preserve the sanctity of Islamic institutions, the supremacy of the Malay Rulers and the sovereignty of the Malay race (the concept of Ketuanan Melayu). On the other hand, progressive and democratic voices in the Opposition PR coalition, civil society, journalists, academia, and the Malaysian Bar, protested loudly and clearly that the law reforms were a fraud: SOSMA replaced detention without trial with procedures that ensured detention without an adequate trial; the PAA placed more restrictions on public gatherings than the law it replaced; liberalisation of the media laws barely scratched the surface of the problem of direct and indirect government interference with the press; what little was revealed about the proposed National Harmony Act suggested it would be simply a rebranded Sedition Act; and the UMNO-led government apparently had no intention of removing other repressive laws such as the Official Secrets Act and the Societies Act, nor – perhaps most importantly of all – of cleaning up the deeply flawed electoral system that has ensured its own repeated return to power since independence from Britain in 1957.

Fortifying authoritarian rule in Malaysia
Amanda Whiting, Guest Contributor
20 April 2015 – New Mandala


Role of the opposition in a parliamentary democracy

The role of the opposition in a parliamentary democracy – William Leong

I am grateful for the opportunity to debate His Majesty’s Royal Address for the 3rd session of the 13th Parliament.

His Majesty at the beginning of his Royal Address called upon the honourable members of this Parliament to open a new chapter with a new mindset and determination in view of the trials and tribulations faced by the country in 2014. The Honourable Speaker has also repeated this call when he opened the Royal Address for debate.

There is a need of a new mindset for our nation to have a more mature approach to democracy.

The first change in mindset is to recognise that the opposition has an important role to play in the Westminster system of parliamentary democracy. It has been recognised since 1826 that the opposition is an integral part of parliamentary democracy when the parliament in the United Kingdom described non-government members of parliament as “His Majesty’s Loyal Opposition”.

Genuine opposition is a necessary attribute of democracy. It is about the right to dissent in a civilised manner. It is about tolerance and trust in the ability of citizens to resolve differences by peaceful means. Without an effective opposition, tyranny takes over.

It may be the rights of the political opposition that is immediately and visibly removed but the true damage is to the legitimacy of the ruling party to govern and ultimately it leads to the destruction of democratic rights and freedoms of the public generally.

The lack of a strong opposition in Parliament may lead to extra parliamentary opposition in the form of violent protests in the streets.

There is no full political democracy if there is no free and fair elections, a full and unquestioned recognition of the rights and functions of the opposition of the day. This means that there must be political minority rights.

It must be vigilant against oppression and unjust invasions of the people’s rights. It should be allowed to offer political alternatives, to improve parliamentary decision making through debates, reflections and contradictions, it should be given the facilities and opportunities to check on expenditures, question over expenditure and expose to the light of public opinion wasteful expenditure or worse.

It must be allowed to ask questions and illicit information: it arouses, educates and moulds public opinion, it must be allowed to scrutinise every action by the government and in doing so, prevents shortcuts in the democratic processes and procedures of government to keep the government on the straight and narrow path thereby enhancing stability, legitimacy, accountability and transparency in the political process.

It is time to realise that the debate between the government and the “loyal opposition” has practical value and is for the good of the society. It must be recognised that the government and the opposition are not each other’s enemies but each other’s partner instead in their indispensable complement to a functioning democracy.

The role of the opposition in a parliamentary democracy – William Leong
18 March 2015 TMI

When the people
fears their government,
there is TYRANNY;
when the government
fears the people,
there is LIBERTY.

- Thomas Jefferson
All that is necessary
for the triumph of evil
is for good men
to do nothing.

- Edmund Burke
Do you hear the people sing?
Real Poverty Rate in
Malaysia: 22.6%     ...more


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