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1MDB – More disclosures, more shocks

Citizen Nades – More disclosures, more shocks

FOR a company which has been and still making headlines for the wrong reasons, 1Malaysia Development Berhad (1MDB) continues to be defiant in the aftermath of the report by Public Accounts Committee (PAC) which was tabled in Parliament last Thursday.

The name-calling has not ceased and the salvos fired at opposition lawmaker Tony Pua (who is also a PAC member) have not stopped. When Pua remarked that he was only “80 per cent” satisfied with the PAC report, the retort was “you can’t be 80 per cent pregnant.”

On Monday, Reuters reported from London that Abu Dhabi’s state-owned International Petroleum Investment Company (IPIC) said neither itself nor its unit Aabar Investments PJS has any links to a British Virgin Islands-incorporated firm named in the PAC report.

“Both IPIC and Aabar confirm that Aabar BVI was not an entity within either corporate group,” the news agency quoted IPIC saying in a statement on the London Stock Exchange, referring to Aabar Investments PJS Limited (Aabar BVI).

1MDB’s retort and response was baffling indeed. It came out with its guns blazing (yet again). The company, it said, paid substantial sums to Aabar BVI and these payments have been recorded in the publicly available and audited financial statements.

“Accordingly, 1MDB finds it curious that IPIC and Aabar have waited until April 2016 to issue such a statement,” it said.

1MDB also said that company records show documentary evidence of the ownership of Aabar BVI and of each payment made, pursuant to various legal agreements that were negotiated with Khadem Al Qubaisi in his capacity as managing director of IPIC and chairman of Aabar and or with Mohamed Badawy Al Husseiny, in his capacity as CEO of Aabar.

But what is public knowledge is that both these men left their posts suddenly and without explanation last year and 1MDB cannot claim to have no knowledge that the money did not reach IPIC or Aabar.

As early as September last year, the Financial Times reported that IPIC was trying to get to the bottom of an apparent US$1.4 billion mismatch in its dealings with 1MDB.

Citing people familiar with the case, the newspaper said IPIC was seeking clarification about the fate of the money, which 1MDB said it paid out but was never recorded as received in IPIC’s own financial statements.

“IPIC’s probe is part of a wider Abu Dhabi audit of the institution’s long entanglement with 1MDB, which has come under growing scrutiny since corruption allegations engulfed both the Malaysian fund and Najib Razak, the country’s embattled prime minister,” the London-based pink-sheet reported.

So, what exactly is going on? Did 1MDB remit billions to a company which had no links with its joint-venture partner? Were the PAC members and Malaysians taken for a long expensive ride? Until the Reuters report emerged, Malaysians were convinced that they were given correct answers.

Not any more. The 1MDB saga has taken several twists and turns. Another significant weave has taken place which has put the company in yet another coil. It is no longer “stale” or “recycled information” – words which the company often uses when it chooses not to address issues.

First, is it not incumbent upon any company to check the audited accounts – the balance sheet and the P & L statements – of any company it has dealings with.

Second, 1MDB failed to take all precautions including a due diligence exercise on the recipient of its funds.

Third, 1MDB does not want to acknowledge that it had been remitting monies to the wrong Aabar – unintentionally or otherwise. Shouldn’t the board and the senior management be held accountable for such a major glitch for which taxpayers have to foot the bill?

Fourth, if IPIC and Aabar had not received the monies, where is it now? Who has “stolen” billions of ringgit from 1MDB?

Fifth and more importantly, what is 1MDB going to do? Is it going to write off these amounts (read billions) as bad debts and “move on” as some leaders have suggested?

…more
Citizen Nades – More disclosures, more shocks
R. Nadeswaran
12 April 2016 – The Sundaily

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