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Friday, July 10, 2015

WEAPON OF MASS DESTRUCTION: 1MDB’s collateral damage

WEAPON OF MASS DESTRUCTION: 1MDB’s collateral damage
IN MY over 40 years in journalism, some 37 years of it reporting on the nation's affairs, I can't think of one issue that has done greater collateral damage to the country than the 1MDB debacle.
What was supposed to be the government's strategic investment fund, with assets among others prime government land, which it acquired for a song, and ironically having bought some aging independent power producer (IPP) plants at exponential prices, it has kept the rakyat on the edge of their seats for months.
1MDB is bad news but bad news is just the adrenalin that keeps the media on its toes and the people in suspense as the drama unfolds following one revelation after another of its wheelings and dealings. Although over-reporting seems to be the order of the day, no one can say it's boring stuff. Far from it.
The ringgit has dipped to its lowest value in 16 years and some analysts attribute this to the doom and gloom surrounding 1MDB, which within just a few years has been saddled with debts worth RM42 billion.
The latest twist did not come in the form of yet another allegation from opposition MPs like Tony Pua and Rafizi Ramli – who first gave us a sneak preview of the debacle – but from overseas.
New York-based The Wall Street Journal, one of the world's top newspapers reported on Tuesday that billions of ringgit of 1MDB funds went into the personal account of Prime Minister Datuk Seri Najib Abdul Razak at a local bank around the time the country held its last general election.
This startling scoop was a sequel to what the newspaper reported a few days earlier that 1MDB money was used to fund the 2013 general election, where the ruling Barisan Nasional led by Najib was returned to power with its smallest majority of seats in Parliament ever and after losing the popular vote count to Pakatan Rakyat.
The WSJ report had the effect of a mini-earthquake in a country unused to such serious allegations against its prime minister, with online and social media painting the town red as the news reverberated within financial and political circles.
Najib as expected fought back with a prompt denial against what he calls wild allegations aimed at forcing him to resign but he went off-tangent somewhat when he rubbished the report by saying that he has never taken funds for personal gain.
I say so because in the first place, WSJ had never accused the prime minister of using the funds for personal gain, an explanation which columnist Joceline Tan says has raised "more questions than answers".
Najib's lawyers are preparing a lawsuit against the newspaper which insisted that it had solid proof to back up its story.
The allegations have led to the creation of a task force jointly headed by four top regulators and law enforcers: Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz, Attorney-General Tan Sri Abdul Gani Patail, Inspector-General of Police Tan Sri Khalid Abu Bakar and Malaysian Anti-Corruption Commission chief commissioner Tan Sri Abu Kassim Mohamed.
This is the first time that such a high-powered team has been set up and the four Tan Sris quickly issued a statement that it had frozen six bank accounts and was investigating 17 others.
Some online portals reported that three of the six accounts frozen were Najib's but the attorney-general denied that this was so.
The political damage which 1MBD has caused can only be gauged at the next general election over two years down the road but the chorus of calls led by former prime minister Tun Dr Mahathir Mohamad for Najib's resignation is expected to gain momentum.
In the meantime, his party Umno and the BN coalition stand solidly behind the prime minister as he weathers the biggest battle of his nearly 40-year political career.
Datuk Cheah Cheng Hye, the founder of Hong Kong-based Value Partners Group Ltd and who is dubbed Malaysia's Warren Buffet, offered some interesting views on the way ahead for Malaysia in a newspaper interview over the weekend. Although he did not specifically refer to 1MDB, the timing of the interview more than meets the eye.
The Penang-born magnate, who started as a cub reporter with The Star in the early 1970's, said it is necessary for Malaysia to impose a clear separation between politics and business affairs of the country.
1MDB was set up during Najib's term as prime minister. Besides being finance minister, he chairs 1IMDB's investment panel.
"Since 1957, politics and economics have become so intertwined that a political patronage has emerged, resulting in the country being left behind by others. The country needs to be a more competitive economy," he said.
He prescribes that Malaysia needs to greatly reduce the government's role in the economy and abolish as much as possible the permits and approvals required to do business. While building a safety net to assist those in genuine need, the focus should shift to giving private enterprise and the free market the leading role in the economy.
It's also his view that enforcement of anti-corruption measures need to be stepped up, possibly after an amnesty has been declared for past misdeeds.
"Although I left Malaysia decades ago, this is my country of birth and I will always love the country and its people, who are among the most kind-hearted and friendliest on earth," said Cheah.
Sound advice amid calls for stricter compliance with good governance and principles of transparency especially for government-linked companies, which are flush with funds. When they fail, all too often taxpayers' money will be used to bail them out. - Sundaily

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