1MDB Scandal – An Ali-Baba “Scam” Partnership Goes Bust

1MDB financial scandal has accumulated a mind-boggling RM42 billion in debt. This easily qualifies it as the biggest scandal in the history of Malaysia. But why kill the goose that lays the golden egg – asked Federal Territories Minister Tengku Adnan, who happens to be one of prime minister Najib Razak’s bootlickers. If RM42 billions debt is what Mr Adnan considers as golden eggs, that speaks volumes about his intelligence.

It’s a public knowledge that Najib administration loves to be surrounded by idiots and dumb like Tengku Adnan, Zahid Hamidi (Home Minister), Ismail Sabri (Agriculture Minister), Mazlan Ahmad (deputy Finance Minister) and the list goes on. Perhaps PM Najib himself is not that clever too, considering he actually didn’t complete his degree in the UK. By surrounding himself with idiots, that would make him feels like a genius.

In fact, ministers like Mr Adnan, Zahid, Mazlan and Ismail make former premier Mahathir’s band of supposedly idiots such as ministers Samy Vellu, Ling Liong Sik and Lim Keng Yaik look like Einstein. Like it or not, this RM42 billion 1MDB – Mother of Scandals – will not have serious impact on Najib administration. Chances are high that the taxpayers money will be used for another bailout,as usual.

The 191 UMNO division heads (Ketua Bahagian) meeting today is nothing extraordinary but to lick PM Najib’s boots, in exchange for more government projects and favours. The 191 UMNO division heads will go back home with millions richer, while PM Najib will go home a happy man with supports to continue his prime-ministership. Losing RM42 billion is just like losing some Chicken Pepperoni Pizzas during its delivery.

1MDB mastermind is said to be Penang-born Low Taek Jho, or popularly known as Jho Low. Through some complex and sweet promises, he tried to con former chief minister of Sarawak, Abdul Taib Mahmud, who had a cash pile of RM2.23 billion in his now-defunct Utama Bank Group, from the sale of RHB Bank to EPF (Employees Provident Fund). In returns, Mr Taib was promised investments from Middle East and various property projects.

Of course, Jho Low’s game plan was merely flipping projects and in the process made hundreds of millions in cool profits. His Swan Symphone bought a 49% stake in Putrajaya Perdana Bhd from E&O Bhd for RM198 million but sold it for RM332 million – a cool RM134 million profit. Then he bought 45% stake in Loh & Loh Corp Bhd from Vistal Achievement Sdn Bhd for RM111 million and disposed it for RM124 million – a RM13 million in profit.

Jho Low was richer by RM147 million in those two flips alone, and the buyer (or rather sucker) was non other than Taib Mahmud’s Utama Banking Group (UBG). Amazingly, Mr Low further convinced Taib to spend RM456 million and RM350 million in Majestic Masterpiece Sdn Bhd and Global Capital respectively, of which both companies were owned by Jho Low himself. So far, UBG had spent RM1,262 million.

UBG further spent its cash pile by buying shares in Putrajaya Perdana and Loh & Loh that it did not already own for RM343 million and RM205 million respectively. In total, it had forked out RM1.81 billion, with zero investment into Taib Mahmud’s Sarawak Corridor of Renewal Energy (SCORE) or Iskandar projects, as promised earlier. The Taib family was paid RM465 million for a total exit from UBG, ultimately.

Project Uganda was the name given to buy over cash-rich UBG and loans to PetroSaudi. Interestingly, PetroSaudi has very little money. Sarawak-Report has exposed how the powerful Jho Low  took an authoritative role when he assured PetroSaudi Director Patrick Mahony that loans by 1MDB to PetroSaudi needed “no approval” from Bank Negara (Central Bank), which legally is untrue.

PetroSaudi subsequently received US$1 billion in loan from 1MDB in 2010. Jho Low claims the massive loans had been approved by the Malaysian Finance Minister, who happens to be prime minister Najib Razak himself (*grin*). This proves that Jho Low plays vital role in 1MDB, not a minor consultancy task as he had claimed earlier. This also proves the powerful prime minister Najib was involved in the scandal directly.

According to documents exposed by Sarawak-Report, PetroSaudi received US$500 million on July 26th and another US$500 million on September 8th, both in 2010. In the first transaction, PetroSaudi received US$340 million while the remaining US$160 million went to Jho Low’s company, Good Star.Tarek Obaid, as Director of PetroSaudi International (Seychelles), paid USD$260 million into its subsidiary Jarvace Sdn Bhd, which bought UBG.

In short, UBG was acquired by PetroSaudi, which got its capital (loans)  from 1MDB, which in turns got the money from taxpayers’ piggybank. If PetroSaudi was really a “cash-rich” company “owned by the Saudi Royal family” and close to the Saudi Government, as trumpeted by Malaysian government controlled-media, why should it borrowed billion of dollars from 1MDB?

Forget about idiots such as ministers Tengku Adnan, Zahid Hamidi, Ismail Sabri, Mazlan Ahmad and others. What this scandal demonstrates is how theAli-Baba business practice works in Malaysia. Ali refers to the UMNO-Malay-politicians while Baba refers to the Chinese-ethnic-cronies, often working together in projects for self-enrichment. But there’s nothing wrong with such business model.

What’s wrong is when taxpayers money were used, without proper approvals and transparencies, in half-cooked business dealings which eventually would require more public money for bailouts. Actually, former PM Mahathir should know better than to criticise at Najib’s 1MDB scandal. Scandals such as BMF, MAS, UEM-Renong, Perwaja, currency gambling and whatnot were some of Mahathir’s trophies.

The only difference is this – while Mahathir Mohamad’s multi-billion-dollar scandals happened domestically, Najib Razak’s multi-billion-dollar scandals occurred overseas, or to be precise – secretly in Cayman Islands. And just like all the Alis and Babas during Mahathir’s 22-year-rule, the “Baba” Jho Low in 1MDB scandal will walk away a free man. Unfortunately, the “Ali” in 1MDB is Najib Razak himself (*grin*).

What are the lessons learnt from this scandal for Najib-Jho Low partnership? In their future business dealings, perhaps the flamboyant tycoon Low Taek Jho should stop being too high-profile. Maybe due to his look, he tries to compensate it with money, splashing boatloads of them, in order to rub shoulders (and other parts) with the Americans rich and famous. Jho Low should learn from tycoons such as Ananda Krishnan, Syed Mokhtar or Vincent Tan.

 

Nevertheless, one has to admit Jho Low is a genius, single-handedly conned the old fox and seasoned politician former chief minister of Sarawak, Abdul Taib Mahmud of his fortune. If Taib was just an ordinary tycoon without the political strings, we bet our last penny that Mr Low Taek Jho wouldn’t have much problem cleaning up billionaire Taib Mahmud’s coffer, every single penny of them. -financetwitter