Abu Dhabi's International Petroleum Investment Co. PJSC has confirmed that it never guaranteed 1 MDB's "Cayman units", confirming the analysis of this writer published on this blog in September last year that :
a) no guarantee had ever been provided to underwrite the value of the "units", despite claims to the contrary by the then Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah ,and
b) that therefore, the units were worthless, leaving 1 MDB with a USD 1 billion hole in cash or near cash holdings it had claimed to have.
IPIC has also said that it " is also investigating companies set up outside its group structure and in other jurisdictions that used variations of the name of its Aabar Investments PJS unit."
Central to these false fronts is of course one Jho Low.The governments of Malaysia and Singapore, who seem disinterested in pursuing Low,must now contend with the possibility of Low squealing like a stuck pig from a prison somewhere in the Middle East.
Singapore has the further problem of what to do about a problem like Arul Kanda, who, like Nick Leeson before him, made false claims for the purpose of gaining a financial advantage in Singapore.
1 MDB "units" worthless-Second Finance Minister Husni has provided the clues
In explaining the nature of the so-called 1 MDB units worth USD 1.103 billion that were once thought to be in cash Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said:
“There’s a mistake… mistake in the sense that, the impression (given by 1MDB) when they said they have redeemed (the funds) and saved (them) in the Singapore bank (Singapore BSI).... so the impression is that there’s cash, (but) actually that is a saving,” Ahmad Husni said told reporters at the Dewan Rakyat today. “That (the redemption) is (in) unit... that’s what it is… inunit, and then, that is being backed sovereign wealth funds” .
The US$1.103 billion is said to be the part of a total of US$ 2.32 billion which has come to be known as the Brazen SkyCayman Island units, Brazen Sky being a wholly-owned subsidiary of 1 MDB incorporated in the Cayman Islands.
When 1MDB and its CEO Azrul Iskandar aka Arul Kanda attempted to explain how and where 1MDB had invested some RM 42 billion in borrowing that sum total was broken down into a deposit with Aaabar Investments PJS ,a subsidiary of the International Petroleum Investment Corp of Abu Dhabi,and investment "units" held by Brazen Sky(see last item below).
However, The Wall Street Journal has now reported, in a story about the Aabar deposit:
According to 1MDB’s financial statements, the Malaysian fund made a collateral payment(the deposit) of $1.4 billion (to secure the guarantee) . A draft report into 1MDB’s activities by Malaysia’s auditor general, reviewed by The Wall Street Journal, said the payment went to a subsidiary of IPIC called Aabar Investments PJS.
According to the Malaysia auditor general’s draft report, 1MDB fired KPMG LLP as its auditor in late 2013 after the firm declined to sign off on 1MDB’s accounts unless it received more details about $2.32 billion the fund said was invested in a CaymanIslands account.
Aabar stepped in and guaranteed the Cayman Islands funds, an official for Deloitte, which took over as 1MDB’s auditor, told a closed-door meeting of the parliamentary committee probing 1MDB, according to a transcript of the proceedings reviewed by the Journal. This guarantee was never made public.
Given the above report by the WSJ, there are now two issues that make that guarantee worthless.First, even if it existed as WSJ said it did, IPIC is not acknowledging it.This is evident from IPIC's statement to the London Stock Exchange tilted 1 MDB Debt Settlement Arrangements which makes no reference at all to any guarantee other than that for two USD 1.75 billion loan packages,which had crystallized.
And now with IPIC and Aabar disputing even having received the USD 1.4 billion which secured their guarantee, the guarantee can be considered as good as gone, even if it existed.
Consequently the so-called Brazen Sky "units" can be considered worthless for these would no longer be "backed sovereign wealth funds” as Husni claimed.
None of the above should surprise anyone given the trouble 1MDB has had in trying to prove that Brazen Sky is worth anything.
The US$1.103 billion is the second tranche of funds in 1MDB’s Cayman Islands foray, which totalled US$2.32 billion (RM8.23 billion). - See more at: http://www.themalaymailonline.com/malaysia/article/it-was-a-mistake-putrajaya-admits-after-confusion-over-1mdbs-cayman-assets#sthash.tF2PYivu.dpuf
The US$1.103 billion is the second tranche of funds in 1MDB’s Cayman Islands foray, which totalled US$2.32 billion (RM8.23 billion) - See more at: http://www.themalaymailonline.com/malaysia/article/it-was-a-mistake-putrajaya-admits-after-confusion-over-1mdbs-cayman-assets#sthash.tF2PYivu.dpuf
The US$1.103 billion is the second tranche of funds in 1MDB’s Cayman Islands foray, which totalled US$2.32 billion (RM8.23 billion) - See more at: http://www.themalaymailonline.com/malaysia/article/it-was-a-mistake-putrajaya-admits-after-confusion-over-1mdbs-cayman-assets#sthash.tF2PYivu.dpuf
- http://sahathevan.blogspot.my/
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