All eyes on how Najib will ABANDON the 1MDB sinking ship

I remembered the last time I was outside “Bilik Mesyuarat Kabinet” in the Prime Minister's Department.

There was a nice sofa and they served grapes, biscuits and Ferrero Rocher chocolates.

However, I doubt that the 1MDB officials could savour the fine delicacies when they had to face the Cabinet yesterday.

This is not like any other meeting. While you can twist the truth when dealing with reporters and issue half-baked media statements, it is quite something else to try to mislead the Cabinet.

In fact, it is such a serious offence that once upon a time, an ex-minister himself was charged with a similar offence.

Welcome to the next unfolding chapter in the 1MDB crisis.

Over the weekend, the investigative portal, Sarawak Reports, released a deadly dossier of email conversations, internal documents, banking instructions and even Facebook updates behind 1MDB’s fateful business venture with Petrosaudi.

According to Sarawak Report, the deal was a sham and was used by Taek Jho Low to enrich himself to the tune of US$700 million, courtesy of funds raised through a guarantee of taxations of the Malaysian people and revenue from her natural resources.

This revelation effectively seals the current president’s fate in 1MDB.

Arul Kanda has gone on record to say that he has no evidence of Jho Low’s involvement in the management of the fund.

Sarawak Report shows that either Arul was not being straightforward or he is clueless. Either way, the banking sector has lost faith with him.

A syndicate of banks responsible for arranging 1MDB’s bridge loan which was used to finance the acquisition of the power assets from Tanjong PLC refused to extend the loan. 1MDB’s US dollar bonds are trading at substantial discounts to Malaysia’s own bonds – even though it enjoys backing through letter of comfort that makes it effectively an obligation of Malaysia.

The PAC chairman, Datuk Nur Jazlan Mohamed, who had previously steadfastly refused to entertain requests for a public hearing on 1MDB is now leading the charge for an independent audit.

The writing is clear – no doubt Arul is a fine investment banker, responsible for some of the largest Islamic debt deals in the world, but heading 1MDB is just too big a jump.

And to the big things, small things matter as well for this role, for example, being pictured against the backdrop of the Malaysian flag is sure to infuriate some of the senior members of Cabinet.

I wish well for his future endeavours, either locally or internationally. No doubt Arul Kanda will be the most famous St Francis old boy, but he should jump as soon as he can because the 1MDB ship is now straying too close to various provisions in the Criminal Procedure code.

I also totally disagree with any insinuations that the Cabinet has committed itself to be responsible for 1MDB. The case is furthest from the truth.

In December, when Datuk Seri Najib Razak was away, the Cabinet was reported to have discussed 1MDB and came to the conclusion that “1MDB has taken everybody, including this Cabinet, for a ride”.

When an attempt was made to subvert the minutes of the Cabinet meeting, senior ministers protested vigorously (no doubt leading to red faces among those responsible for producing the minutes).

And the Cabinet was adamant in wanting greater transparency over 1MDB. And after hearing 1MDB and Deloitte wax lyrical, the Cabinet did what would indicate that they were only giving a qualified “support” to the fund.

They insisted that none other than the auditor-general audit the firm and that the audit report is tabled at the one place where 1MDB should dread the most – the Parliamentary Accounts Committee.

As I have said time and time again, the approach used to manage the 1MDB is crisis is just fanning the flames. The issue facing 1MDB is both a political, branding and financial issue.

The approach taken to date is to waste credibility to defend positions which are indefensible, for example declaring in Utusan Malaysia that all issues surrounding 1MDB have been settled, giving the appearance that everything is okay when it is far from that and denying Jho Low’s involvement when there are documents, emails and transactions to prove otherwise.

Just imagine how little credibility 1MDB must have that the Cabinet was forced to ask the auditor-general to perform an audit, even after Tan Sri Ambrin Buang himself pleaded not to have the 1MDB issue land on his lap.

From now on, 1MDB enters unchartered territory. The auditor-general is not a department to mess around with.

Those who were previously friendly to 1MDB have turned cold. There are some things that can be done immediately – for example, asking a veteran ex-banker to helm the fund, publishing the full annual report on its website, asking for the resignation of the chairman and other members of the management team.

There are others that would require the PR skills and brains of “bloggers on the disavowed list”. Either way, the time is ticking as the 1MDB hole gets bigger and drags more people into it. - TMI