Pua: Arul Kanda’s disclosure raises more questions

1MDB Chief comes out of the blue for no rhyme or reason with ‘answers’ no one wants.

KUALA LUMPUR: Pakatan Rakyat, wants 1MDB Chief Arul Kanda Kandasamy to stop being coy with the truth and start answering questions in full.

1MDB cannot regain the trust or confidence of the people, it warned, by just merely giving half-baked answers and pretend to itself that it has managed to quash all doubts and criticisms.

“It certainly does not ‘clear any confusion’, but instead it encourages even more suspicion and speculation as to why 1MDB was so evasive, said Petaling Jaya Utara MP Tony Pua.

“Arul Kanda’s disclosure of where the RM42 billion of 1MDB debt went, not only disclosed nothing new, it raises more questions.”

He was commenting on Arul Kanda issuing a statement with a graphical presentation late on Wednesday, “out of the blue”, to “quash” allegations that there was money missing from 1MDB.

He quoted the 1MDB Chief as saying:

“We provide a summary of what the RM42 billion has been used for, information that is fully disclosed in 1MDB’s audited and publicly available accounts from March 31, 2010 to March 31, 2014. We trust this clarification will help to clear any confusion on this matter.”

None of the figures (in the summary) are new as we have already derived as much from the March 2014 Financial Statements, pointed out Pua. “None explain the criticisms which have been rained on 1MDB to date.”

“The questions I have been asking, both in and out of Parliament, over the past two to three years include what exactly was the RM6.1 billion of investment in Brazen Sky which was earlier purportedly parked in Cayman Islands.”

Why is it that despite Arul Kanda announcing that all of Brazen Sky’s investments have been “redeemed”, there’s still no cash at all in the BSI Bank Singapore?

“This is despite Arul Kanda assuring us in February that the cash was sitting safely in the bank,” added Pua.

He recalled that he had also repeatedly asked for details on the RM5.1 billion invested by 1MDB Global Investment Limited. “Najib Abdul Razak, the Finance Minister who was also Prime Minister, consistently and repeatedly refused to list the investments made by 1MDB GIL. He even refused to disclose where the fund was managed or located.”

He went on to assure that the Opposition was fully aware that 1MDB has RM5.1 billion “deposited” with Aabar Investment. “However, our question has always been on why did 1MDB agree to such onerous ‘loan-shark’ terms to secure a USD3.5 billion guarantee from Abu Dhabi’s International Petroleum Investment Corporation (IPIC)? “

“Why borrow and get to use only 60 per cent of the funds?”

Hence, said Pua, “the revelation by Arul Kanda essentially revealed nothing that we don’t already know. The questions which we asked however remain completely unanswered.”

Worse, he said, his disclosure raised even more questions on 1MDB.

He noted that Arul Kanda had detailed that the RM5.8 billion for financial expenditure included RM4.5 billion for cost of finance and working capital, RM0.9 billion for foreign exchange cost and RM0.4 billion for taxes. “Is Arul Kanda trying to tell us that 1MDB took additional loans to pay interest on its loans and taxes?”

“Is he confirming that the returns from whatever assets purchased with the earlier loans couldn’t even cover interest and tax expenses such that 1MDB had to borrow an additional up to RM5.8 billion to pay for them?”

Does that not imply, he asked, that the whole 1MDB investment strategy was an absolute disaster and the management was at best, completely incompetent, or at worst involved in fraud and embezzlement?

In the statement, Arul Kanda “disclosed” that RM18 billion was for purchasing independent power producers, RM1.7 billion for purchasing land, RM5.8 billion for financial expenditure and RM16.4 billion for investment funds which constituted the RM41.9 billion of debt.

For the RM16.4 billion investment funds, the further breakdown was RM6.1 billion in Brazen Sky, RM4.2 billion in deposit with Abu Dhabi’s Aabar Investment and RM5.1 billion in 1MDB Global Investment Limited (GIL) funds.