Pua: If USD1b from Arabs is not a loan, what is it?

1MDB chief Arul Kanda has denied that the USD1 billion from the Arabs was “a loan, debt or bailout”.

KUALA LUMPUR: Assuming that 1MDB Chief Arul Kanda Kandasamy’s statement can still be trusted, that the USD1 billion payment to 1MDB from its so-called Arab partners was not a loan, noted Petaling Jaya Utara MP Tony Pua, “we are still completely clueless why International Petroleum Investment Company (IPIC) would be willing to make a payment of USD1 billion for a clearly indeterminate transaction”.

All Malaysians have was Second Finance Minister Ahmad Husni Hanadzlah’s earlier statement that “the agreement will also include further measures to comprehensively address the various financial asset and liability transactions between the parties, further details of which will be announced in due course”.

Husni Hanadzlah had earlier informed the public that he will be tabling a restructuring report to the Cabinet.

However, added Pua who is also DAP National Publicity Secretary, all the Ministers received was some vague proposals without providing the complete picture about IPIC paying USD1 billion upfront while waiting for some form of agreement to be arrived “in due course” over what it will cost Malaysians. “This certainly doesn’t stand up to being a ‘complete report’ which the Second Finance Minister promised.”

Questions arise:

How did the Cabinet unanimously and blindly agree to and support the decision to accept a very mysterious USD1 billion payment from a foreign government for transactions which were unknown or not finalized?

Why was there absolutely no questions asked by any Cabinet member as disclosed by Tourism Minister, Nazri Aziz?

Was it because they understood perfectly the proposed “restructuring plan” which was tabled and hence there was no necessity to ask questions?

Or was it because they were intimidated by Prime Minister Najib Abdul Razak’s less than subtle threat “ … if somehow, some of you feel uncomfortable with this, please hand in or write (your resignation), and I will understand”?

“This was despite all the hoo-haa expressed by various Ministers prior to the Cabinet meeting that there needs to be proper accountability, transparency and clear explanations,” added Pua. “If they themselves don’t know or understand the proposal or issues, how can they expect the man-in-the-street to understand?”

Pua lamented that it was clear that Cabinet members were self-serving, more interested in protecting their ministerial positions, than to protect the interest of billions of ringgit of Malaysian taxpayers funds and liabilities in 1MDB.

Husni Hanadzlah disclosed last Friday that “1MDB has entered into a binding agreement with IPIC and its subsidiary Aabar Investments” where the former will make a “payment” of USD1 billion, on or before 4 June 2015.

“This USD1 billion payment will be used to repay a USD975 million (RM3.5 billion) loan, in advance of its due date, to a syndicate of international bank lenders,” according to the Second Finance Minister’s statement.

“I had then asked what was the cost of this payment to the Malaysian government, and whether this was a loan or an advance to 1MDB,” recalled Pua.

Following that, he reminded, Arul Kanda denied that the USD1 billion was “a loan, debt or bailout”.

Arul Kanda said: “Further to the Ministry of Finance’s statement on 29 May, we have noted with concern claims from certain quarters suggesting that the USD1 billion payment from the International Petroleum Investment Company of Abu Dhabi was a loan, or involves 1MDB assuming further debt.”

“That is absolutely not the case. This is a business transaction; not a loan, not any kind of debt and not a bailout.”

Again, asked Pua, if the USD1 billion was not a ‘loan’ from the Abu Dhabi investment arm, then what is it and how did the Cabinet members give its endorsement to the plan?