The Prime Minister, Datuk Seri Najib Razak cannot keep silent about the serious allegations by Wall Street Journal yesterday that the 1MDB funds running into billions of ringgit were used to bank-roll his 13th General Election campaign.
A Wall Street Journal report yesterday said this was achieved by having 1MDB make overpriced purchase of power assets from Genting Group in 2012.
Genting then made a donation to a foundation controlled by Najib before the 13th general election and it claimed the funds were used for campaigning.
The WSJ report said:
"The 1MDB fund in October 2012 acquired a Genting unit that owned a 75 percent stake in a 720-megawatt coal-fired power plant near Kuala Lumpur.
"The price, which was equivalent to about US$740 million at the time, came to RM2.3 billion.
"A few months after the sale, a unit of Genting called Genting Plantations Bhd made a donation of about US$10 million to a Najib-linked charity, according to a spokesperson for Genting Plantations.”
The foundation, WSJ said, was Yayasan Rakyat 1Malaysia, which lists Najib as chairperson on its website.
The WSJ report said: "Though set up to help underprivileged Malaysians through education and sport, this charity soon got involved in spending that appeared designed to help Najib retain power in the May 2013 election.”
WSJ said 1MDB's purchase of Genting's stake in the power asset was around five times what it was then worth.
The WSJ report said: "The price, which was equivalent to about US$740 million at the time, came to RM2.3 billion.
"Genting later reported it had a 1.9 billion ringgit extraordinary gain on this sale, implying a value for its stake in the power plant of just 400 million ringgit - or less than one-fifth what 1MDB paid for it.
"In a second sign that 1MDB paid a high price, the fund’s financial statement for the fiscal year ended in March 2013 said the power unit’s property, plant and equipment were worth a little under RM500 million at the time of acquisition.”
WSJ said the "donations" to Yayasan Rakyat 1Malaysia were then poured into the election campaign in Penang for BN's bid to recapture the state.
PM Najib
"It and other charities linked to the government spent millions of dollars before the voting in Penang, a northern state that was an important election battleground.
"Najib visited Penang during the campaign and announced that Yayasan Rakyat 1Malaysia would donate RM2 million to two local schools.
"These schools serve Chinese communities that are not a poor demographic but whose support would be crucial to win votes in the area," it said.
The WSJ report claimed that regulators found the charity had failed to file its required financial status since 2013.
WSJ added that Goldman Sachs, which received a handsome commission for raising US$3 billion (RM11.22 billion) in bonds for 1MDB, was pressed to do so quickly shortly before the general election.
"Goldman Sachs Group Inc arranged the bond sale and took on extra risk to get the deal done quickly at 1MDB’s request, according to a person familiar with the matter, earning unusually high profits as a result," it said.
Malaysiakini in its write-up on the WSJ claim said that shortly after the general election, Kinibiz reported that Genting made an unexpected RM190 million in donations, believed to be related to the election.
Kinibiz reported that analysts were puzzled that the Genting group made such a huge donation, and that too spread out over several companies, in just one quarter, significantly impacting its bottom line.
Kinibiz quoted an analyst as speculating that the so-called donations could be election-related, using charities as fronts as it is normally unthinkable that such large contributions were made to charities.
The Prime Minister's silence or that of his Prime Minister's Office on this expose by Wall Street Journal will seriously impact in a most adverse manner not only on the Prime Minister's credibility but the nation's international reputation as well.
As the person responsible for 1MDB's deals, in law and in fact, not only because 1MDB is a government company and Najib is the ultimate authority as Prime Minister and Finance Minister, but also by virtue of Clause 117 of the 1MDB Memorandum and Articles of Association agreement which stipulates that the Prime Minister must give his written approval for any of 1MDB deals, including the firm’s investments or any bid for restructuring, silence is no more an option for Najib as it tantamounts to admission of the WSJ report.
Is Najib prepared to announce that he will personally appear before the Parliamentary Accounts Committee (PAC) and answer all queries about the WSJ claim that 1MDB funds running into billions of ringgit had been used to bank-roll his 13th General Election campaign?
Is Najib prepared to ask PAC to reschedule its hearings on the 1MDB scandal so as to give priority for him to appear before the PAC on the WSJ claim, even in matter of a week or two?
Kit Siang is DAP Adviser
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