1MDB - A RM20 BILLION FINANCIAL MELTDOWN WAITING TO HAPPEN? WHY YOU SHOULD VOTE PAKATAN IN & NAJIB & BUMNO/BN OUT, OUT, OUT TO OBLIVION!

Malaysians have plenty to worry about 1MDB's bond issues totalling some RN20 billion to-date. According to KiniBiz(CLICK HERE), there are allegations that 1MDB's secretive and over-the-odds ways of pricing bonds and raising funds and investing may well be laying the foundation for a giant ponzi scheme sting.

Originally, 1MDB was called TIA (Terengganu Investment Authority). The Federal Government was supposed to pay TIA the royalties due from Petronas to Terengganu, to be invested in a sovereign fund, for the benefit of its people. Najib then hijacked the idea, cancelled TIA and created 1MDB, a Federal entity under his control, now supposedly a sovereign fund for the benefit of all Malaysians. 

This of course completely ignored and bypassed Khazanah, the Government's investment arm, since that's exactly what it is supposed to do - invest Taxpayer's money in viable projects for the benefit of all Malaysians. But then cunning, thief-minded and serially lying Najib did not wish for TIA, with its billions of ringgit, to be managed at State level in a transparent and accountable manner. Our former Agong and King of Terengganu had already as far back as 2008 shown his independent mind by refusing to accept UMNO's preferred candidate for the post of Menteri Besar (Chief Minister). By moving it to Federal level, Najib could manipulate the funds in total secrecy without worrying about Terengganu and Royal whistleblowers.

When IMDB's CEO, Directors, "Advisors" and Trustess (one of whom is PM Najib) all bleat the same tune - that the accounts have been audited by an international firm, and filed in accordance with company law - we have much to worry about. Not only because these accounts filed with the ROC (Registrar of Companies) are in the abbreviated form. Such accounts do not tell us who the bonds were issued to at fanciful discounts and interest rates, why funds were raised overseas at interest rates way above international norms or why foreign countries are issuing default guarantees and at what reward to them. These audited accounts cannot explain why 1MDB paid over the odd premiums (billions of ringgit) to acquire IPP's (Independent Power Producers) owned by UMNO-linked cronies and that are due to expire in a few years,when by holding out they could have it for a song!

Most importantly, it does not tells us if 1MDB was forced to appoint a certain local bank controlled by the brother of a prime minister, with exclusive rights to its bond issues. Tellingly also, 1MDB's detailed audited accounts are not posted at its website at http://www.1mdb.com.my/.

Consider that PKFZ was also audited by reputable audit firms; yet today our Government is staring at the possibility of a total bailout bill of RM12.4 billion, having already forked out RM4 billion to save blunders and crony and crooked dealings by UMNO and MCA at Ministerial and Cabinet level, and fraud at corporate level. 

Remember too that when the sub-prime and CDO crises hit the United States of America in 2008, necessitating a US$700 BILLION bailout of Wall St. and banks, the CEO's of Lehmann Brothers, Goldman Sachs, Morgan Stanley, Merril Lynch, AIG, Citibank, Fanny Mae and Freddy Mac etc, ALL, without fail, also claimed their accounts had been audited by the "Big Four" and filed in full compliance of all laws. But in USA Congressional and Senate hearings, evidence of massive fraud and financial mismanagement surfaced. All the CEOs had to offer, while lying blatantly with a poker face, is that they had been sincere in their dealings and decisions i.e. $700 billion dollars of it. If sincerity were gold, there would be another Klondike-like stampede among the "financial experts" in USA and Europe to trade and gamble on it, while blaming China if they lost money.

Here is another huge reason to worry about. Najib and 1MDB are courting the same "financial experts" in their clandestine wheelings and dealings. Thieves of a feather, surely flock together? And who is PM Najib most relying on - Goldman Sachs whose CEO Lloyd Blankfein, at the height of the USA CDO crisis, saw no conflict of interest in speedily short-selling the very shares he was urging his clients to buy at huge premiums!

And the sure kiss of death? Our PAC (Public Accounts Committee) pronounced that "1MDB acounts are healthy and in order". CLICK HERE. This is the PAC also under the chairmanship of Datuk Seri Azmi Khalid which determined that there was no hanky-panky in the RM8 billion Scorpene Submarine purchases contracts despite the gruesome murder of Mongolian Altantuya. CLICK HERE. The PAC also found nothing wrong in defence purchase of MIG fighter aircrafts totalling over $2 billion, where some $300 million of commissions were diverted by a procurement agent and ex-thief Minister of Melaka, to a fake off-shore company to deceive his partners!

The simple balance sheet facts about 1MDB are as follows:

1. Paid Up Capital - RM1 million

2. Total Bonds issued to-date - RM20 Billion

3. Total Investments and Cash/Profits - RM20 billion

From this, it is clear that:

1. The money that Petronas/Najib promised TIA, some RM2-4 billion a year, has not been paid into 1MDB's bank account. Where has it all disappeared to?  What on earth is Najib doing, allowing 1MDB to gear up at the rate of 20,000 times its paid up capital of RM1 million?

2. Why were all these bonds issued overseas? Surely, with 6% annual bond interest, Najib could have created a 1M Trust Sovereign Fund exclusively for Malaysians to invest in. Which Malaysian would not want to invest in such a fund, out of sheer patriotism? After all, not even the EPF pays 6% interest to its shareholders. More worryingly, Indonesia's central bank sold 10 and 30-year US$ denominated bonds 3 weeks ago with a yield of 3.5%. What on earth was 1MDB doing floating 6% bonds, and that at a discount of 20%?

3. Why raise funds in US$ overseas for ringgit denominated investments and development projects in Malaysia, such as the  RM26 billion TRX (Tun Razak Exchange) and the 196-hectare Bandar Malaysia mixed -development real estate development?

4. With bond interest averaging 6%, 1MDB will have to generate at the bare minimum, about RM1.2 billion a year to service debt. What is 1MDB's projected income and profit over the next 20 years, to justify debt vs minimum acceptable returns of 10% on its investments? IMDB's CEO is of course playing around with semantics by claiming it has no loans. A rose by any other name, smells the same. Call it bond or loans, it is ALL DEBT which is guaranteed 100% now by us, the Taxpayer.

5. By signing up with indecent haste the old and expiring IPP's, Najib has seemingly tied the hands of the incoming Pakatan Government (yes, I predict Pakatan will win GE 13 by a huge majority). With 55% electricity reserves, we do not need old or new IPP's. Since all IPP's require a guaranteed power purchasing contract with Tenaga to operate, once again Tenaga will be robbed blind to the tune of RM 15-20 billion a year purchasing electricity from IPP's it does not and will not need! But Najib, in his vindictive crony oriented endeavours, forgets that such transactions can be reversed if they are not in the public interest, fraud is proved or inducements (illegal commissions and bribes) paid to certain parties to bulldoze through the acquisitions.

6. Questions have also been posed to the CEO and Board of Directors of 1MDB if the off-shore incorporated PetroSaudi Corporation is the real McCoy, or as in the case of MIG fighter planes and ex-Thief Minister of Melaka, a fake entity created and headed by nominees, for the benefit of UMNO and its cronies.

7. It should worry everyone that among 1MDB's "advisors" is Nor Mohd Yakcop, now chief of the EPU (Economic Plundering Unit) under PM Najib's control. Nor Mohamed was the man who was sacked in the early '90's as chief forex trader of BNM (Bank Negara Malaysia) for creating losses said to be ranging anywhere from RM6 billion to RM30 billion!! With then PM Mahathir's connivance, the losses were originally illegally hidden in the accounts by netting off against revaluation surpluses from gold and other assets. The scandal only came to light when Lim Kit Siang of DAP (Democratic Action Party) astutely discovered the huge hole in BNM's balance sheet and forced Mahathir to admit the fiasco in Parliament. One may well ask what Nor Mohamed is doing back in Government, especially since no RCI (Royal Commission of Inquiry) has been held to determine if massive fraud was involved in a case which nearly wiped out all of Malaysia's reserves!!

8. We should nor forget how Sime Darby had to write-off over RM4 billion in its power & energy forays in Saudi and the Middle East. All the JV contracts were one-sided and drafted in Arabic which were badly translated, and proper due diligence was sacrificed to satisfy "more speed, less haste national service" calls by Badawi and Najib. Sime lost its case in the Saudi courts. Something like this is likely to surface if any of 1MDB's overseas investments in JV with PetroSaudi, Abu Dhabi or Qatar goes sour. Najib is bending so low in courting the Arabs as to shamelessly expose his total nakedness.

There are literally hundreds of questions that worried finanial analysts and Malaysians would like the answers to vis-a-vis 1MDB and its furtive operations. By stonewalling and hiding behind carefully worded PRspeak and civil service/civil serpent mentality waffle, 1MDB is not endearing itself to us. They can tell us (their 100% funders and owners) the truth, nicely and voluntarily, in a forthright manner, or be prepared to be dragged off in chains later (as soon as next month) and forcibly be made to talk! The choice is your, 1MDB!

Donplaypuks® with our RM20 billion, man!