Leslie Lopez of ST Singapore has just reported:
Last week, IPIC informed 1MDB that the KL entity was in default of a complex bond agreement between the two, according to Malaysian government officials and financial executives close to the situation.
Malaysian government officials, who spoke to The Straits Times on condition of anonymity, said IPIC has informally told 1MDB that it has no intention of honouring the interest payment because of the alleged default of the bond agreement. For its part, the Najib government has taken the position that it will not step in to cover the payment because it has done nothing wrong.
This is a classic case of believing in one's own publicity, and of forgetting that in any legal dispute the facts of the matter are almost always paramount.In this matter the facts are simple, well known, count against Najib, 1 MDB and Malaysia. The facts in essence are these:
a) Sitting in a Thai prison courtesy of a compliant Thai judiciary is a PetroSaudi director named Xavier Justo who has an entire database of emails detailing Najib's "friend of the family" Low Taek Jho's dealings with PetroSaudi and IPIC , which have attracted the attention of government investigators from the US, Switzerland, the UK, Singapore , Hong Kong and Luxembourg.
b) Sitting pretty in London and Dubai is one Brian Lord, the former QCHQ man who at various times let it be known that he has full and complete access to the Justo database and more.
Khalifa bin Zayed bin Sultan Al Nahyan, President of the United Arab Emirates, the Emir of Abu Dhabi and the commander of the Union Defence Force.
c) Sitting one presumes with a very high degree anxiety in Dubai under house arrest is Khadem Al-Qubaisi, the former managing director of IPIC, who has clearly angered Sheikh Mansour bin Zayed Al Nahyan, who heads IPIC , and the brother of Sheikh Khalifa bin Zayed Al Nahyan, the Abu Dhabi ruler and United Arab Emirates president.
All three , if not at least Lord and Khadem, are well within the control of the Al-Nahyans. All too easy for the family to rebut Najib's "we have dome nothing wrong", in fora and media of their choosing.
All this over payments that IPIC has assumed subject to a guarantee it provided 1 MDB. - Realpolitikasia
RELATED POSTIG ON NOV 1, 2015:
IPIC says Najib & 1 MDB owe $481 million-IPIC may have grounds to sue Najib personally for what he says is an amount that could be anything...
It has been previously reported on this blog that Prime Minister and Minister For Finance Najib Razak denied in Parliament that 1 MDB owed the International Petroleum Investment Corporation (IPIC) US$ 481 million. Najib was quoted saying:
“Notes in the 1MDB financial report ended March 31, 2014, clearly state that no such amount was borne by 1MDB from IPIC,” said Najib, who is also the prime minister.
IPIC on the other hand seem to have a very different view of things, and have said so in its Annual Report for the year ended 31 December 2014, issued sometime in June this year:
In 2014, the Group entered into an agreement relating to the Options Agreements where the Group assigned all of its rights under the Options Agreement to 1MDB and its subsidiaries for a fixed price. As of 31 December 2014, an amount of US $ 481,326 thousand was outstanding.
As mentioned, the annual report was issued sometime in June.If at all the debt or any part of it had been repaid, it would have been mentioned in the notes.It has not.
The issue of Najib's personal liability arises in part as a result of IPIC assuming 1 MDB's liabilities pursuant to the two USD 1.75 billion bond issues, and assuming responsibility for debt owed a consortium led by Deutsche Bank. As the notes below, extracted from the IPIC 2014 annual report show, IPIC considers the issue of the guarantee part and parcel of greater whole, ie of amounts owed it by 1 MDB. For Najib personally the ominous parts are these:
On 28 May 2015, IPIC, Aabar, Minister of Finance, Inc., Malaysia (MOF) and 1Malaysia Development Berhad (1MDB) entered into a binding term sheet that provides for the following principal matters... 1MDB and MOF have agreed to perform the obligations contemplated in the binding term sheet and to indemnify IPIC and Aabar for any non-performance, and vice versa. IPIC has met the Cash Payment and will meet the interim interest payments under the Notes from existing liquidity available to IPIC.
In other words, IPIC considers that it has done its part .Having done so it to expects the Minister of Finance, Inc., Malaysia (MOF) to honour its obligations. The MOF Inc is Najib, and while he may think he is protected by the corporate shield, his denial of the debt in parliament does raise the issue of fraud, which makes the shield useless.Then there is the issue of MOF Inc being only Najib, and that too may provide grounds for the shield to be ignored.The amount owed, as Najib himself seems to suggest, could be anything,and probably a number so large that one could contemplate buying Louis Vuitton many times over, and not just a few Birkin handbags.As for sovereign immunity..............let us not waste time.END
41 1MDB GUARANTEE
“Notes in the 1MDB financial report ended March 31, 2014, clearly state that no such amount was borne by 1MDB from IPIC,” said Najib, who is also the prime minister.
IPIC on the other hand seem to have a very different view of things, and have said so in its Annual Report for the year ended 31 December 2014, issued sometime in June this year:
In 2014, the Group entered into an agreement relating to the Options Agreements where the Group assigned all of its rights under the Options Agreement to 1MDB and its subsidiaries for a fixed price. As of 31 December 2014, an amount of US $ 481,326 thousand was outstanding.
As mentioned, the annual report was issued sometime in June.If at all the debt or any part of it had been repaid, it would have been mentioned in the notes.It has not.
The issue of Najib's personal liability arises in part as a result of IPIC assuming 1 MDB's liabilities pursuant to the two USD 1.75 billion bond issues, and assuming responsibility for debt owed a consortium led by Deutsche Bank. As the notes below, extracted from the IPIC 2014 annual report show, IPIC considers the issue of the guarantee part and parcel of greater whole, ie of amounts owed it by 1 MDB. For Najib personally the ominous parts are these:
On 28 May 2015, IPIC, Aabar, Minister of Finance, Inc., Malaysia (MOF) and 1Malaysia Development Berhad (1MDB) entered into a binding term sheet that provides for the following principal matters... 1MDB and MOF have agreed to perform the obligations contemplated in the binding term sheet and to indemnify IPIC and Aabar for any non-performance, and vice versa. IPIC has met the Cash Payment and will meet the interim interest payments under the Notes from existing liquidity available to IPIC.
In other words, IPIC considers that it has done its part .Having done so it to expects the Minister of Finance, Inc., Malaysia (MOF) to honour its obligations. The MOF Inc is Najib, and while he may think he is protected by the corporate shield, his denial of the debt in parliament does raise the issue of fraud, which makes the shield useless.Then there is the issue of MOF Inc being only Najib, and that too may provide grounds for the shield to be ignored.The amount owed, as Najib himself seems to suggest, could be anything,and probably a number so large that one could contemplate buying Louis Vuitton many times over, and not just a few Birkin handbags.As for sovereign immunity..............let us not waste time.END
41 1MDB GUARANTEE
The Company agreed in 2012 to guarantee the obligations (principal and associated interests) of certain subsidiaries of 1Malaysia Development Berhad (“1MDB’’), a strategic development company wholly-owned by the Government of Malaysia, in respect of two financings in the energy and power sector. The principal amount of these obligations is US $ 3.5 billion.
The guarantees were initially recognised as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantees. Subsequent to initial recognition, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially recognised less cumulative amortisation. As at 31 December 2014, the unamortised deferred income was US $ 279,751 thousand (31 December 2013: US $ 311,721 thousand) (note 33).
In respect of these financings, the Company benefits from back-to-back guarantees and support from 1MDB and has secured for its Group the rights (“the Options Agreements”) to acquire up to 49% stake in the shares of two subsidiaries of 1MDB at a fixed price.
In 2014, the Group entered into an agreement relating to the Options Agreements where the Group assigned all of its rights under the Options Agreement to 1MDB and its subsidiaries for a fixed price. As of 31 December 2014, an amount of US $ 481,326 thousand was outstanding (note 23).On 28 May 2015, IPIC, Aabar, Minister of Finance, Inc., Malaysia (MOF) and 1Malaysia Development Berhad (1MDB) entered into a binding term sheet that provides for the following principal matters: · on 4 June 2015, IPIC provided US$1 billion to 1MDB for 1MDB to utilise immediately to settle certain of its liabilities (the Cash Payment); · from 4 June 2015, IPIC has assumed the obligations to pay (on an interim basis) all interest due under twoIPIC guaranteed 1MDB financings amounting to US$3.5 billion in aggregate principal amount (the Notes); · upon the completion of the transfer of assets as described below, IPIC will directly assume liability for all payment obligations under the Notes (the Assumption of Debt) and forgive certain financial obligations of the 1MDB Group to the IPIC Group (the Debt Forgiveness); and· by 30 June 2016, IPIC is to have received a transfer of assets with an aggregate value of an amount which represents the sum of the Cash Payment, the Assumption of Debt and the Debt Forgiveness.1MDB and MOF have agreed to perform the obligations contemplated in the binding term sheet and to indemnify IPIC and Aabar for any non-performance, and vice versa. IPIC has met the Cash Payment and will meet the interim interest payments under the Notes from existing liquidityavailable to IPIC.
- http://sahathevan.blogspot.my/ realpolitikasia.blogspot.my/
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