29
Jun
15

Inevitable end of 1MDB and crony capitalism

Crony capitalism is about a company which use coercive powers of government to gain money, market and resources that would not otherwise be achievable in a free market.

1Malaysia Development Berhad (1MDB) is the most troubled crony capitalist company by far.

According to its website, Prime Minister Datuk Seri Najib Razak is the chairman of board of advisers who has been given enormous power but it is impossible for any one person, no matter how wise he is, to anticipate the consequences of 1MDB’s business policies.

Austrian economist Friedrich Hayek once said: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design”.

1MDB has been going on for several years and the consequences finally come as the total worth of so-called assets of RM51.4 billion crony capitalist will gradually come to an end, hopefully.

1MDB is now come under fire mainly because of its profitability, accumulating mountain of debts, controversial business transactions which eventually will become a financial burden to us.

Last week, Moody’s Investors Service analyst Christian de Guzman said there was a worry that Malaysia’s fiscal consolidation may be derailed should the government be forced to assist 1MDB financially.

“We know that support is possibly forthcoming, in fact support has already come in the form of a line of credit to 1MDB earlier this year. The question we’re asking ourselves is if the magnitude of support will eventually derail the trend of fiscal consolidation and that may cause us to re-look outlook” he said.

I think it is fair to say that this is the price we must pay for making huge mistakes by letting our government grow without bounds, extending its tentacles into every aspect of our economy.

And we have allowed crony capitalism like 1MDB to grow along with it.

Ironically, politicians and civil society groups, including the prime minister himself, suggest we need to increase government powers and oversight via Cabinet, Public Accounts Committee (PAC) hearings in Parliament, auditor-general, police and Malaysian Anti-Corruption Commission to investigate the scandal.

Why are we repeating the same mistake again? Why did we not think that the government is the very thing causing the scandal? Too much technical details are being studied until we forget the most fundamental aspect that governments are inherently poor at running a business.

…more
Inevitable end of 1MDB and crony capitalism – Medecci Lineil
2 June 2015 – TMI

28
Jun
15

Everything To Hide

Everything To Hide – Najib Bottles Out Of ‘Tell All Session’ on 1MDB!

Najib has now shown that he is well and truly cornered over 1MDB. There are too many facts that are known and which he simply cannot disprove.

Indeed it is not a question of having ‘nothing to hide’ over 1MDB, it is a question of having nowhere to hide.

Today’s moving drama was the ultimate proof that he cannot stand up to straight questions and that he would rather be seen to run away than be grilled in the limelight over Jho Low and 1MDB’s missing billions.

First, there was what had been clearly meant as a staged Q&A to produce some controlled messaging on this thorny subject, under the guise of a “Nothing to Hide” Session at a friendly NGO.

However, when news got out about the event it became the hottest ticket in town and the crowds arrived early this morning in droves.

It must have been an unusual experience for Najib not to have to pay for his audience. On the other hand it was not at all the sort of audience he wanted.

The would-be questioners included Dr Mahathir himself and several other lethally well-informed critics with some very simple questions, which would have been extremely hard for Najib to answer.

For example: Why did 1MDB tell Bank Negara Malaysia it was transferring USD$1.19 billion into a joint venture with the company PetroSaudi, when in fact the money went straight into a Swiss bank account controlled by his side-kick and wife’s good friend, Jho Low?

Najib clearly cannot think of a suitable answer or he would have come already to Parliament and given it, instead of sending his deputies to waffle indirectly around the subject.

And nor can the Prime Minister offload the blame. He has already tried it, but it didn’t work, because too much is now known about his commanding role at 1MDB.

Najib had made the mistake of appointing himself the sole shareholder and sole decision maker over the fund, plainly in order to give himself the freedom and control he craved over the borrowing and disposal of the subsequent billions that have passed through his pet ‘development fund’.

But this sole power has also landed him with sole responsibility.

After the revelations that 1MDB is floundering in debt after billions were diverted into Jho Low’s bank accounts, Najib tried to pretend he had only a distant supervisory role and all questions on the matter would have to be referred to his juniors.

But this has been revealed as one of several lies that have been told by him and at his behest over past several weeks.

Another crucial lie, which has now been exposed, was that the missing cash from the PetroSaudi Joint Venture was sitting in 1MDB’s Brazen Sky bank account at BSI Bank in Singapore.

It isn’t, as his junior finance ministers have now been forced to admit – there is no cash in that account and nothing that can be translated into cash any time soon, if ever.

…more
Everything To Hide – Najib Bottles Out Of ‘Tell All Session’ on 1MDB!
5 Jun 2015 – Sarawak Report

28
Jun
15

PM and his gatekeepers have betrayed Malaysians on 1MDB Rm42 billion debt

Prime Minister Najib and his gatekeepers have betrayed Malaysians on 1MDB Rm42 billion debt

There is a Malay saying that describes most aptly what is happening in Malaysia today under the Najib administration. It goes like this: Harapkan Pagar, Pagar Makan Padi ( literally it means in English, depend on the gatekeeper, the gatekeeper steals the rice). Yes, Najib and his Cabinet as gatekeepers and their officials have betrayed us on the 1Malaysia Development Berhad (1MDB)’s RM 42billion debt, which is in danger of default.

Crisis of Confidence in Najib’s Leadership

Malaysians have spent countless hours discussing the need to protect this intangible capital called TRUST that underpins personal and social relationships, business and public administration. We recognise the need for our government to be open, transparent and accountable; we emphasized the importance of sound management of our economy and fiscal responsibility; we comment on corruption, fiduciary duty of company directors and public officials.

We raised concerns about our ballooning national debt now close to RM600 billion (and that does not include private sector and household debt), and the Malay economy. We have warned the recalcitrant Prime Minister cum Finance Minister that Malaysia is in a financial crisis. This crazy debt financed spending which is justified as being good for sustained economic economic growth must stop if we are to avoid joining Greece which has difficulties in paying its creditors including the IMF. But Prime Minister Najib chooses not to listen and account for the borrowed funds. In stead his gatekeepers continue to divert our attention away from the problems of 1MDB.

The 1MDB financial scandal involving debt to the tune of RM42 billion by a single entity is already having a negative impact on public and investor confidence in the way the Najib administration manages our country’s finances and makes and executives public policy. The ringgit has already taking its toll against the US dollar on foreign exchange markets. This is because the Najib administration has consistently refused to explain what happened to the proceeds of the RM 42 billion and tell the truth. Even our Auditor-General is taking his time to come out with his report. The top managers of 1MDB too have acted irresponsibly by not turning up for a meeting with the Parliamentary Public Accounts Committee to answer questions on 1MDB activities and financial accounts. The time is now to come clean on 1MDB and other matters, if you have nothing to hide. Don’t treat us Malaysians as dumb and stupid people.

…more
Prime Minister Najib and his gatekeepers have betrayed Malaysians on 1MDB Rm42 billion debt
June 1, 2015 – Din Merican Blog

27
Jun
15

Has MOF hatched a devious scheme to cover 1MDB losses?

The company seems to be inflating its land prices to excuse its RM42 billion debt burden.

KUALA LUMPUR: Petaling Jaya Utara MP Tony Pua has expressed shock over Second Finance Minister Ahmad Husni Hanadzlah’s revised valuation of 1MDB’s real estate properties. “I eagerly followed his live television interview with RTM1 to hear his explanation on where 1MDB’s money went.”

“While there were many other oft-repeated excuses to explain the ‘missing funds’ and his refusal to entertain questions with regards to the enigmatic Jho Low were widely publicized in news reports, the valuations were a new thing.”

He demands to know if the Second Finance Minister was spewing gibberish and just plucked these new outlandish valuations out of thin air to present an optimistic picture of 1MDB. “How were these new valuations arrived at? Or are there more sinister reasons why the values have been massively inflated?”

Pua, who is also DAP National Publicity Secretary, said Husni Hanadzlah has let slip another bombshell during his RTM1 live interview on the valuation of 1MDB’s Tun Razak Exchange and Bandar Malaysia.

As Husni rattled off the list of highly valued assets in 1MDB’s possession, noted Pua, he explained that the 70-acre Tun Razak Exchange (TRX) and 495-acre Bandar Malaysia are now worth RM7 billion and RM11 billion respectively. “He argued that their combined value of RM18 billion will go a long way to prove that 1MDB will comfortably pay off its monster debts over the longer term.”

These revised valuations were shockers because even the previously revised valuations presented in the 31 March 2014 financial statements were only a fraction of the newly disclosed figures, said Pua. “The Tun Razak Exchange land belonging to KLIFD Sdn Bhd was already then revalued to RM2.7 billion. Similarly, the Sg Besi military airbase land sold to Bandar Malaysia Sdn Bhd was then revalued to RM4.29 billion. These numbers add up to barely RM7 billion.”

The question hence is how did the valuations of these pieces of properties leap by 157 per cent in just one year?

Worse, said Pua, these properties were purchased from the Malaysian government at only RM194 million and RM1.69 billion back in 2011 and 2012 respectively. “In less than five years, 1MDB gets to ‘profit’ nearly 900 per cent despite having done almost nothing on these pieces of prime land over the last few years.”

Pua had written earlier on 31 May 2015, in response to Husni’s earlier statement that the TRX and Bandar Malaysia will be made separate “independent” entities owned by the Ministry of Finance. “I had expressed my concern that the Minister’s statement meant that the Federal Government will essentially acquire KLIFD and Bandar Malaysia from 1MDB at very high prices,” said Pua.

Based on March 2014 accounts, he said that he had already warned that if the government pays asset prices of RM7 billion and still relieve 1MDB of their associated loans of RM3.2 billion, then Malaysians will be forking out a total of RM10.2 billion just for these transactions alone.

However, he said that based on the latest bombshell from the Second Finance Minister, the government would now have to fork out a whopping RM18 billion, or as much as RM21.2 billion if KLIFD and Bandar Malaysia’s associated loans are taken into consideration

…more
Has MOF hatched a devious scheme to cover 1MDB losses?
June 5, 2015 – FMT

26
Jun
15

Ex-PetroSaudi director’s arrest ‘suspicious’, says Dr M

The arrest of former PetroSaudi International director Xavier Andre Justo is suspicious and appears planned, former prime minister Tun Dr Mahathir Mohamad said today.

Not ruling out the possibility the involvement of the Malaysian government, he said that “very clever propagandists” were hard at work to “blacken” his face.

“What makes me puzzled is that he didn’t commit a crime in Thailand. He committed the crime in Saudi Arabia.

“Usually, other countries don’t care unless he is a terrorist,” Dr Mahathir told a press conference after a buka puasa event with Perkasa in Kampung Baru.

“I guess he must be a terrorist, that’s why Thailand arrested him. If it was just a matter of defrauding a company, that should be Saudi Arabia’s problem.”

When asked if he was prepared to apologise should authorities prove that the leaked documents on 1Malaysia Development Berhad (1MDB) had been tampered with, Dr Mahathir was non-committal.

“I will see what he says. But the circumstances appear suspicious. It seems planned. Many clever people are involved.”

Dr Mahathir added that he did not know whether Prime Minister Datuk Seri Najib Razak was involved in the matter.

“I don’t know, because we are finding some very clever propagandists working very hard, so now my face is blackened and my legacy all has been destroyed,” said Dr Mahathir.

He also he believed the emails on PetroSaudi, which Sarawak Report published on its website earlier this year, had not been doctored.

“If you look at the series of emails, it was not tampered with,” said Dr Mahathir.

“When we lie, we will get trapped by our own lies. When a follow-up lie is made, it is hard to match it with the first lie.”

Justo is currently in Thai police’s custody for attempting to blackmail PetroSaudi over its deals with MDB, and is expected to be deported once police have wrapped up their investigations, The Nation reported.

The Thai English-language broadsheet today said that as of last night, Justo was still being held by the countries Police Crime Suppression Division (CSD).

The division had on Tuesday announced the arrest of the 49-year-old at a house in the Thai island resort of Koh Samui.

Computers, hard drives and other data storage devices were seized during his arrest.

Justo was reported to have been paid some RM15 million to leave PetroSaudi and is now accused of asking for more money in an attempt to blackmail the oil company over its deals with 1MDB.

Thai media reported that Justo has denied this.

Thai police had also described Justo as an IT executive, but checks on company information available online showed that he had been a director.

…more
Ex-PetroSaudi director’s arrest ‘suspicious’, says Dr M
25 June 2015 – TMI

26
Jun
15

Zero evidence of “distortion” of documents – Sarawak Report

S’wak Report tells critics: Get ready to be sued for libel

UK-based whistleblower stands by their revelations on PSI and 1MDB and say critics should check their facts first before accusing them of ‘tampering’ documents.

KUALA LUMPUR: The UK-based whistleblower site, The Sarawak Report, said in a website posting that it has closely researched the extremely serious and libellous allegations which claim documents relating to its coverage of the PetroSaudi-1MDB joint venture were “tampered” and “distorted” in order to “creatively alter” the truth.

“We can now prove that these allegations are demonstrably untrue, by examining the evidence on which they were based,” said the website.

“So, our message to those who have accused us is check your facts before you sound off your accusations and start to worry about libel suits, if you have defamed us or an innocent man who is now in jail.”

The Sarawak Report was claiming in its posting that staff from the Umno-owned New Straits Times were transported to Bangkok on Tuesday in order to photograph the “staged arrest” of an alleged PetroSaudi International (PSI) whistleblower. “They claim that he was the source of millions of emails that have provided The Sarawak Report information about the siphoning of billions of ringgit from 1MDB.”

Indeed, added the website, it was PSI who had lodged the series of denunciations to the Thai police, which formed the basis of the charges that led to the arrest and detention. “PSI has accused their former colleague of taking their data and ‘distorting’ it, supposedly in order to ‘extort’ and ‘blackmail’ the company – a crime PSI claimed took place in Thailand.”

So, continued the website, it was hardly in the capacity of a neutral party that PSI offered the NST an interview with their “expert” interviewee for the story. “This turned out to be an unnamed employee of the UK based ‘cyber intelligence’ firm, Protection Group International, who had allegedly examined the documents uploaded onto the web by The Sarawak Report.”

The website reiterated that it can confirm that there is zero evidence brought forward so far to substantiate the claims of “distortion” made over the past 48 hours by the New Straits Times and taken up by certain media, bloggers and Umno politicians.

Indeed, it said, the little evidence that has been provided by these parties can be shown to confirm the exact opposite, which is that there has been no tampering of documents.

…more
S’wak Report tells critics: Get ready to be sued for libel
June 26, 2015 – FMT

25
Jun
15

Corrupt Malaysia money distorts Melbourne market

In 2013, the private sale of an unassuming five storey apartment block near Monash University in Caulfield stunned local observers.

Even in Melbourne’s booming property market, the $22.5 million price tag for a building designed like an IKEA cupboard seemed well above the odds. That’s because it was.

Named Dudley House by developers keen to imbue it with a sense of grandeur, it seems the last place to host any untoward dealings.

But the sordid tale of this building highlights one reason that federal treasurer Joe Hockey is so concerned about the foreign funds flowing into an already overheated property market, as well as why local and international corruption fighters say Australia has become an investment hot spot for the crooked and corrupt.

An eight-month Fairfax Media investigation has traced suspicious money flows, court files and corporate records across three continents to uncover why Dudley House’s purchase price was so high.

Its sale was part of a global money laundering and bribery scheme engineered by greedy local developers and powerful officials overseas who pocketed $4.75 million in bribes on this single deal.

Fairfax Media has also discovered that some of these same figures are linked to tax haven companies which are also behind the purchase of around $80 million in Australian properties.

By following a complex money trail – which, in a curious twist, includes front companies set up by a Singaporean wedding-cake maker – Fairfax Media has identified the foreign officials who appear to be using Australia as a money laundering hub.

There are also Australian facilitators tied to these suspect dealings, including Melbourne man Peter Mills, who once did a stint in Pentridge prison for corporate fraud. Mills was recently quizzed in a civil court case about whether the $4.75 million generated by inflating Dudley House’s sale price was used “to grease palms” overseas.

His reply was short but surprisingly honest. “Yeah, I think so”.

…more
Corrupt Malaysia money distorts Melbourne market
June 23, 2015 – The Age




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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