1MDB – the dishonesty and the deceit

We have always believed that those who defended 1MDB, in order to protect their own position or self interests, or simply being paid to do it, will lose their credibility and integrity eventually.

And it is sad that those who defending them would resort to evading questions, indulging in dishonesty and telling lies.

For the past couple of weeks, one by one these people are exposed.

We take from the most recent:

1) Contradictory answers in Parliament by Finance Ministry and 1MDB:

1MDB won’t confirm what they were doing with the money they received

1MDB today said its USD150 million (RM556 million) loan from Finance Ministry-owned Export-Import Bank of Malaysia (Exim) were utilised, but did not specify details.

THIS DOES NOT INSPIRE CONFIDENCE AT ALL

In a press release, 1MDB president Arul Kanda said the proceeds were used in accordance to the terms of agreement, which is to: “finance the general corporate purposes including but not limited to the working capital requirements, future capital expenditures and equity infusion of the energy business within the 1MDB group of companies”. (In other words: bla bla bla)

However, Arul did not elaborate on the contradictory claims by two deputy finance ministers on how the fund were used.

Chua Tee Yong told the Dewan Rakyat that the sum was used to finance the purchase of land in Pulau Indah, Selangor at RM20.80 per square feet. The deal was inked on February 10.

He also confirmed that Putrajaya issued letters to support 1MDB’s loan application.

However, Ahmad Maslan told the Dewan Rakyat that he was unaware of this, as the money was supposed to be used for for the maintenance of power plants and operations involving energy export.

Petaling Jaya Utara MP Tony Pua argued that he had sighted documents during the Public Accounts Committee meeting which confirmed that the loan was meant for 1MDB to buy land.

He added that this meant that Exim had violated its own mandate, which is to promote international trade.

Both 1MDB and Exim are owned by the finance ministry. Prime Minister Najib Abdul Razak is the finance minister and the final decision maker of 1MDB.

This gives rise to the possibility of conflict of interest.

Sad that Chua Tee Yong’s credibility is diminished while Ahmad Maslan’s credibility sunk even lower. As for Arul Kanda, his press statement is testament to the only strategy 1MDB could play right now – give vague answers to confuse everyone and hope there will be no more questions.

2) Prime Minister and his favourite mantra: “Wait for the AG report” now means absolutely nothing.

“WAIT FOR THE AG REPORT!” *LAUGHS*

The public were force fed with the idea that the AG Report will quickly settle all questions and suspicion on any wrongdoings in 1MDB. The Prime Minister gave the impression that all will be over soon as the AG will complete their investigation by end of June.

But lo and behold just a few days ago the PAC announced that the preliminary AG Report will not be released to the public.

The Prime Minister himself had stated in his blog in May:

“c. We are expecting the release of the preliminary report by Auditor General very soon. In the mean time, please do not speculate and form conclusions without the information that will be laid out by the Auditor General, who will provide a detailed report into 1MDB’s finances.”

What kind of dishonesty is this? Did the Prime Minister all along intend to lead the crowd with false promises?

“Wait for the AG Report” has now turned into “Wait For My Another Lie”.

To make matters worse, the light at the end of the tunnel which was promised to come soon was quickly doused by an insinuation by the PAC themselves that the investigation could take nearly a year to complete.

Nur Jazlan said the parliamentary committee was part of the legislative arm and had powers and responsibilities according to law, to investigate any government-owned company that used the people’s money or any public funds.

“And this investigation on 1MDB is not the first the PAC, led by me, has done, we have launched proceedings on the klia2 project last year,” he added.

“Taking that example, the PAC took almost a year to complete the report which was eventually presented to the Dewan Rakyat last November.”

It seems the rakyat have been taken for a ride by the people behind 1MDB and those who are in charge with billions of our money. Do you think these people have anymore credibility and integrity?

An MP from Raub once wrote in his blog when the Prime Minister is not being truthful:

You people out there, you have no chance at all against a PM who misled and is not truthful in parliament. What’s not telling the truth to the ordinary folks mean to him? That would be too simple. The people will think of him a liar.

3) Bank Negara exonerates Tun Dr Mahathir regarding the ringgit slump:

Ahmad Maslan, the deputy finance minister in charge of defending 1MDB had blamed Tun Dr Mahathir’s attacks on 1MDB is the cause for the fall of ringgit on June 14. A few days later, he changed his statement. Now he said that Tun Dr Mahathir’s attack on 1MDB is only one of the 3 factors for the fall of ringgit.

But today, Bank Negara itself denied what Ahmad Maslan had been saying all along.

Ringgit slump: Bank Negara exonerates Dr M

Bank Negara has refuted recent media reports blaming former premier Dr Mahathir Mohamad’s criticisms of the Najib-administration for the Ringgit slump.

In a press release today, Bank Negara said the current volatility of the Ringgit was caused both global and domestic developments, which does not involve politics.

“Global developments would include the investor expectations relating to monetary policies of major central banks and the trends in crude oil and gas prices.

“Domestic factors include concerns about government linked entities and ratings related issues.

“While external developments are beyond the control of any open economy, every effort needs to be undertaken to bring about resolution to the domestic issues that confront our economy,” said the central bank.

Noting that Malaysia has sound economic fundamentals and growth prospects, the central bank said the performance of the Ringgit will be stable once these issues are resolved.

Bank Negara added it will never be drawn into any political agenda and will focus on its mandate to maintain monetary and fiscal stability.

Although Mahathir was never named in the press release, it was clear that Bank Negara was referring to Deputy Finance Minister Ahmad Maslan’s recent attempt to pin blame on the former premier.

Imagine that. A deputy finance minister lying to the public and defaming the former prime minister just to make the current Advisor of 1MDB look good. How low will these people go just to defend 1MDB?

4) Two previous auditors for 1MDB were indeed terminated, not rotated:

During a TV interview, when Finance Minister II was asked why did 1MDB changed auditors, he replied that it was just a normal rotational exercise for external auditors. We knew then it was a lie. And today it was indeed exposedby the PAC that those auditors were indeed sacked:

1Malaysia Development Bhd (1MDB), which was formed in 2009, has so far sacked two external auditors, first Ernst & Young (EY) followed by KPMG, according to the Public Accounts Committee (PAC).

EY was terminated before it completed the audit on 1MDB’s accounts for the financial year ended March 2010 (FY10). KPMG, which took over in September 2010, was alleged to have had to rush the auditing job. The former auditor signed off the FY10 accounts one month after it was appointed.

KPMG was dismissed in December 2013, PAC chairman Datuk Nur Jazlan Mohd told reporters after chairing the PAC probe into 1MDB, with officials from KPMG yesterday.

Nur Jazlan said the committee wanted to know the reason behind the termination of KPMG as an auditor,during the period when most major investments were made by 1MDB, including deals with PetroSaudi International Ltd and Brazen Sky Ltd. Brazen Sky is a subsidiary of 1MDB.

Poor Husni. This 1MDB fiasco is way over his head and as the official spokesperson for 1MDB issue, he had made a bigger mess by diminishing trust and wrecking public confidence. As far as public is concerned, it is Finance Minister I who should be answering questions.

5) Husni Hanadzlah said 1MDB’s loan interests is up to RM2.7 billion per year:

Debt-ridden 1Malaysia Development Bhd (1MDB) is paying up to RM2.7 billion a year in interest payments alone to its bankers for the RM42 billion debt it had accumulated over six years, the Finance Ministry said today.

Finance Minister II Datuk Seri Ahmad Husni Hanadzlah told the Dewan Rakyat today that 1MDB pays between RM2.4 billion and RM2.7 billion a year in interest payments.

But in another statement, 1MDB claimed that Tun Dr Mahathir was factually incorrect about RM3 billion loan interests and that is only RM2.4 billion for its RM42 billion debt.

It seems both Finance Ministry and their wholly owned subsidiary can’t even get their figures right. And on top of it all, they did not address Tun Dr Mahathir’s concern about the spiralling debts and interests cost:

14. But more loans were raised from local as well as foreign banks. In all RM42 billion were borrowed. It is not clear what the terms are. But interest on RM42 billion must come to almost RM3 billion a year. Unless the investment yield fantastic returns, the interest burden would sink 1MDB.

And yes, 1MDB is sinking. Otherwise, those behind 1MDB won’t be panicking and started to blabber nonsense to public with rationalising this and that, revamping here and there.

And how did 1MDB answered these concerns?

Like this:

5. Tun Mahathir claims “In all RM42 billion were borrowed…. But interest on RM42 billion must come to almost RM3 billion a year”.

The figures being quoted by Tun Mahathir are incorrect. To be clear; the interest cost on RM42 billion of debt by 1MDB as of 31.03.2014 was RM2.4 billion, i.e. a significant 20% less than what Tun Mahathir claims.

Did that address the concerns the public is asking regarding the massive debts and its interests costs? No it did not.

1MDB pinned their defence on why on earth did they borrow unnecessary loans on: “Tun Dr Mahathir shifting goalpost because his figures are incorrect”.

What a dishonest way in hiding the truth.

The public want answers. They do not want contradictory numbers from people who should know the answers. And they surely do not want to see a blatant trick in trying to evade the issue altogether.

When someone doesn’t understand an issue, questions are often asked. It is always nice if the people we asked will reply with “that is a very good question.. and this is the answer..”, and they proceeded to enlighten us with the proper answer which will remove all doubts.

But in the case of 1MDB, the people who are in charge of it do not seem to have the inclination to answer comprehensively. In fact, in many instances they gave conflicting, even untruthful,  and at best, vague answers.

Is this the end for good governance?