1MDB LOSS SHOCKER: 2015 RED INK MAY HIT RM3 TO 4 BILLION, NO WONDER NAJIB, ARUL PLAY HIDE & SEEK WITH AUDITORS

For the financial year ended 31-Mar-2014, 1MDB declared a loss of about RM 665 million.

Now, what do you think the loss, or if you’re a delusional Presidential blogger – the profit instead, would be in 2015?

The answer to that sir, will shock you,

1MDB has several problems to address in the Accounts for Financial Year 2015.

The biggest headache they will face is the issue on the Cayman Islands money.

As detailed in note 18 (ii) - Investment in Segregated Portfolio Company of 1MDB’s 2014 Annual Financial Statement, USD $1.22 billion of the "US $2.33 billion" (kununnya) has been used for debt interest payment, working capital and payments to Aabar as "refundable deposits" pursuant to a Settlement Agreement to extinguish Options Agreement.

These refer to the “units” Ahmad Husni Hanadzlah was talking about at the start of the year. By 1MDB's own admission, 52% of those "units" are not there anymore.

Siapa kata total debt = RM 41.8 billion!

Siapa kata RM 6.1 billion masih tersimpan di dalam Brazen Sky!

Units dah melayang lah bro!

That is why 1MDB’s earlier picture about how the utilisation of the RM 42 billion was totally bogus.

They listed RM 6.1 billion as being in Brazen Sky (i.e. Hanadzlah’s Units). From their own financial statements, we know that this is not the case because USD $1.22 billion has been spent.

1MDB claims that part of the payment to Aabar was as “refundable deposits” to terminate the Option agreement to subscribe to Edra Energy’s shares.

The amount involved is not a small amount, we are talking about USD $1.22 billion or RM 4.5 billion.

But then, why did 1MDB had to go and further borrow USD $975 million from a consortium of banks led by Deutsche Bank? And why was this borrowing not listed in 1MDB’s “Kemana perginya RM 42 billion” chart.

Well, with the additional borrowing it should be “Kemana perginya RM 46 billion”, and if you add the additional RM 1 billion given by the Government, then it becomes “Kemana perginya RM 46.9 billion”, and if add the depreciation of the Ringgit in 1Q15, it should be "Kemana perginya RM 48.9 billion", and if you take into account current exchange rates as of today, it should be “Kemana perginya RM 52 billion.

This makes the amount paid to extinguish the Aabar Option very large indeed – anywhere to the tune of RM 4 – RM 5 billion.

Interestingly, Deloitte was a “korang cherdik” (you know what I wanted to say right) auditor by saying that 1MDB did not need to recognise a liability on the termination of the option because they could not estimate it.

I thought accounting 101 is that you recognise a liability when you know that there present obligations which will require future sacrifices.

Nevertheless, 1MDB can no longer run away and play games.

The options have been extinguished, funds totalling RM 7 billion were involved and the question now is how much was the final cost.

If we take a conservative estimate of about RM 4 billion (that’s if the Auditor actually signs off , which itself should be a cause for celebration), then this amount needs to “expensed”.

This will make 2015's Finance cost a staggering RM 6.5 billion as compared to RM 2.4 billion.

This would mean a pre-tax loss of anywhere between RM 3 to RM 4 billion for financial year 2015.

You get a figure of RM 3 billion if you assume they could get revaluation gains and other operating income of RM 2.4 billion, which I think is a stretch. If the other operating income and revaluation gains amount to a more credible RM 1.4 billion – then you get an RM 4 billion loss.

That sir is the reason they are playing all this wayang and refusing to release their 2015 accounts.

Whether it is smart or bangang – I do not know.

(For the benefit of those who raised the point, the RM 2 billion loan mentioned in the leaked memo refers to the Tranche 2 of the Refinancing of the Syndicated Bridging loan. AK paid for this - for OSTB) - http://spin-kings.blogspot.my/