1MDB: Let due process take its course

We've been given one story after another about the monies borrowed by 1MDB and all these stories contradict each other.

COMMENT

by Matthias Chang

It has been reported that the 1MDB President and Group Executive Director “has assumed full responsibility over a ‘miscommunication’ that led the Finance Ministry to amend a parliamentary reply” on the firm’s recent dealings.

This followed accusations that Prime Minister Najib Razak had lied to Parliament regarding 1MDB’s transfer of funds from the Cayman Islands to the Singapore branch of Swiss bank BSI.

Arul Kanda Kandasamy was quoted as saying, “As the president of the company, I take full responsibility for this misunderstanding, and will ensure better communication with all stakeholders.”

Let’s recall what Arul Kanda had previously said about the US$1.103 billion cash that was deposited in Singapore.

“Although the entire sum (in the Caymans) has been redeemed in full, only the first tranche of US$1.22 billion (RM4.33 billion), which was redeemed last year, has been repatriated.

“The cash is in our accounts and in US dollars. I can assure you. I have seen the statements.

“People need to understand that the first tranche has been fully spent in September last year to service the debt interest payments, working capital as well as payments to Abu Dhabi’s Aabar investments, estimated at RM830 million.

“I said the remaining sum has been redeemed. I never said anything about repatriation of funds. There’s a very sensible and simple reason for that. We are keeping the money in US dollars as we have US$6.5 billion (RM23.06 billion) in bonds out there, for which interest payments come up to nearly US$400 million (RM1.4 billion) a year.”

The above statement was corroborated by the Prime Minister cum Finance Minister.

The Finance Ministry, in a written reply on March 11 in response to Tony Pua’s query as to why the second tranche of US$1.103 billion had not yet been repatriated, said the remaining cash was being held by BSI in Singapore and would not be brought back to Malaysia.

Bank Negara regulations

The minister claimed that this was owing to regulatory restrictions by Bank Negara, which made it allegedly difficult to bring the money back into Malaysia.

“The decision to use a bank in Singapore was done in order to smoothen the transaction as regulations set by Bank Negara Malaysia require for transactions above RM50 million to obtain its approval,” he said.

How can there be any miscommunication by Arul Kanda when the issue is so simple, namely, what was deposited in the BSI bank in Singapore?

But while Arul Kanda called it a “miscommunication”, the Second Finance Minister, in a press statement in May, called it a “mistake”.

It was reported in the Malay Mail Online:

“Putrajaya admitted today that the US$1.103 billion (RM3.91 billion) redeemed from 1Malaysia Development Berhad’s (1MDB) Cayman Islands account had been mistakenly described as ‘cash’ instead of just ‘assets’ by the investment firm.

“Explaining the matter, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah confirmed his ministry’s clarification earlier this week that the redemption, now parked in Singapore’s BSI Bank, is in the form of ‘units’ and not US dollars as previously claimed by 1MDB CEO Arul Kanda Kandasamy.”

But was this a “miscommunication,” a “mistake” or just an outright lie?

We demand that Arul Kanda reveal to the whole country what specific documents he referred to when he said that US$1.103 billion “cash was deposited” in the BSI bank.

We demand from the Prime Minister that he declare what specific documents he relies on to show that there are now “units” placed with the BSI bank.

We demand to know from Arul Kanda, the Prime Minister and the Second Finance Minister whether the set of documents that supports the assertion that mere paper “units” were all that had been placed with the BSI bank in Singapore was exactly the same set of documents that Arul Kanda relied on when he declared that cash amounting to US$1.103 billion had been deposited with the BSI bank.

This is to enable the entire world to determine conclusively how, and in what circumstances, it is possible for such an experienced and qualified banker as Arul Kanda and equally qualified Prime Minister and Second Finance Minister to “miscommunicate” or make a “mistake” as to the nature of the documents.

Likewise, we must also demand that Bank Negara declare whether these three personalities can be excused on the grounds of “miscommunication” or a “mistake”.

In his press statement, Arul Kanda also said that all the relevant documents had been handed over to all the relevant authorities.

We demand to know what these documents specifically are and whether they are the documents relied on in March 2015 by Arul Kanda and the Prime Minister.

The rakyat is fed-up with this song and dance routine. We are given one story after another about the monies borrowed by 1MDB and how they have been utilized and all these stories contradict each other.

Enough is enough. Bring those responsible to justice so that all the evidence can be in the public domain and due process can take its course.

Matthias Chang is a Barrister and once served as the political secretary of Dr. Mahathir Mohamad