A Messed-up Country and some of its mad people

There is a heightened sense of fedupness in writing yet another article about 1MDB's debt rationalising plans. It is directed at the verbal pyrotechnics offered by 1MDB's CEO and the finance minister. Both cannot and will never answer our simple questions.

One of them being, as to why did the government announce it has sold 60% equity in Bandar Tun Razak Sdn Bhd for 7 billion? (Figures rounded up). But the buyer says it is paying RM5 billion? There is a difference of RM2 billion.

If indeed the China Company has paid only RM5 billion, then we ask, where did the RM2 billion go to?

This reminds me of a story about khazanah Malaysia people. Sometime ago, after the prawn breeding ponds at Kerpan failed, Khazanah was anxious to make up for the loss by finding a substitute prawn breeding business. It finally ended its search in east Malaysia. The business had 1000 ponds and was doing real and good business. The two parties negotiated and finally agreed to a price of RM120 million. This was many years ago.

When it came to putting down the price on paper, the person/s from Khazanah wanted the price stated as RM150 million. Khazanah will pay the vendor rm150 million with the understanding, RM30 million will be ploughed back into private accounts. The vendor refused.

Even as this deal was aborted, let me assure you, when Pakatan gets into power, we will deliver the justice so required to stem out the practice of regulatory capture.

As to the RM2 billion, we hope it has not gone into another private account held on trust for the millions of UMNO members. If that were so, then the 3.4 million UMNO members can jump up with joy and say, never mind, take more because it’s taken to ensure UMNO wins and it’s done by a Malay.

Or the PM was only anxious and overexcited to tell the world, that the loans and liabilities of 1MDB which at 31^st March 2014, was RM51 billion has been reduced by another RM7 billion.

So that he can furthermore tell the world that the loan and liabilities of the notorious 1MDB has been reduced, in total by RM25 billion. RM17-18 billion from the sale of Edra Energy and RM7 billion from sale of 60% equity in Bandar Tun Razak from 1MDBRE.

If it has been reduced by RM25 billion, there is still a balance of debt and liabilities of RM26 billion.

What else will 1MDB sell to pay off its debts and liabilities? 1MDB has the TRX land and the Ayer Hitam Land. Both were bought cheap by 1MDB from the government.

Or the government will transfer more land that it owns to 1MDB so that 1MDB can flip them at a much higher price.

But the China Company presented its facts to the HK Stock exchange. It pledged to tell the truth as compared to the mere public declaration by the CEO of 1MDB and the Malaysian PM.

People are likely to find the declaration by the China company more believable.

Where did the RM2 billion go to?

If the price of RM7 billion was not yet adjusted for relocation costs and other costs as announced by Arul Kanda, then why mention the figure of RM7 billion in the first place? Just for the pleasure of imagining the debt of 1MDB will be reduced by RM7 billion instead of RM5 billion? Who are the monkeys advising the Finance Minister? 

 

The public will be suspicious whether this is another version of regulatory capture. The people in authority in 1MDB or 1MDBRE sold the land at really RM5 billion but wanted the china Company declare the price as RM7 billion. The RM2 billion forming part of the regulatory capture will then be divided among the sharks at 1MDB or 1MDBRE.

That’s one. Two, when the China company said the price is RM5 billion, they paid 50% upfront which is RM2.5 billion. The question is, if you are the owner of 40% of the equity, why pay 50% of the purchase price?  You should pay only 40% or RM 2 billion. Instead you pay RM2.5 billion or RM500 million more.

Is someone collecting brokerage fee of RM500 million for making this deal?  The people at 1MDB or 1MDBRE did not anticipate that the China Company will make a public declaration about it.

The China company and its JV partner (let’s not complicate our minds on the people in the local partner company) will say it will pay only RM5 billion. Now what 1MDB does with the proceeds is not the concern of the JV Company.

1MDB has only RM5 billion to do what it wants. It can pay up the sukuk bond or other debts. It can only reduce 1MDB’s debts by another RM5 billion.

The Najib government is again lying to the Malaysian public. It cannot reduce the debts of 1MDB by RM7 billion if what they get is RM5 billion.

If RM7 billion was paid, then there is the difference of RM2 billion. Where has this RM2 billion gone to?

The China Company as 40% equity partner in the JV, paid RM500 million more.  Where did the RM500 million gone to?