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Friday, March 31, 2017

Bursting the mainstream media's fairytale 1MDB is 'debt free'



MP SPEAKS | Prime Minister-cum-Finance Minister Najib Abdul Razak is the undisputed King of Obfuscation, carefully wording his parliamentary replies with selected choice facts while deliberately omitting crucial details, calculated to present an alternate reality for the media and the rakyat.
At first, I was both amused and bemused by yesterday’s headline on Malaysiakini story, “PM: 1MDB has cleared its bank debts, short-term debts”.
The headline is factually correct, although it needs an alert and informed reader to read between the lines.
Later however, I was stumped and stupefied by the headlines of The Star and The New Straits Times (NST), screaming “Najib: 1MDB is now debt free” and “1MDB now debt free: Finance Ministry”.
I immediately sought out my colleague, Member of Parliament for Bakri, Er Teck Hwa for a copy of Najib Razak’s parliamentary reply to his question, which was the basis for the above news stories.
He had asked the finance minister to state, among other things, “debts and assets of 1MDB in and out of Malaysia for the years, 2015 and 2016”.
Najib responded that 1MDB made full settlement amounting to RM229.5 million for a revolving credit facility to Affin Bank in November 2015.
Last year, 1MDB has also successfully repaid a RM950 million in a standby credit facility from the federal government, a RM2 billion term-loan facility from Marstan Investments NV and a US$150 million term financing facility from Exim Bank.
With the RM3.8 billion worth of debts repaid, the finance minister further added that 1MDB no longer have any borrowings with banks, nor any other short-term debts.
RM39 billion still outstanding
As if on cue, knowingly or unknowingly, The Star and NST fell for it hook, line and sinker by declaring that “1MDB is now debt free”, painting a most beautiful alternate reality which the prime minister would like you to believe.
Except the reality is so exceedingly different, that you can only conclude that Najib’s reply was deliberately designed to obfuscate the truth to achieve the effect convincing Malaysians of the biggest lie of them all, that “1MDB is debt free”.
Najib has conveniently and mischievously failed to disclose the multiple elephants squeezed into the room - that 1MDB still has outstanding:
(i) A 30-year RM5 billion bond which is guaranteed by the federal government
(ii) Two 10-year US$1.75 billion bonds which was guaranteed by Abu Dhabi’s International Petroleum Investment Corporation (IPIC) but have since been indemnified by the Ministry of Finance, Incorporated (MOF Inc)
(iii) A 10-year US$3.0 billion bond, guaranteed with a “letter of support” issued by the Minister of Finance
(iv) A US$1.0 billion advance by IPIC, indemnified by MOF Inc
(v) At least US$230 million worth of interest payments by IPIC on behalf of 1MDB, indemnified by MOF Inc.
Hence, the total amount of 1MDB debt still outstanding, and directly or indirectly guaranteed by the federal government are RM5.0 billion and at least US$7.73 billion, or a total of more than RM39 billion!
What of Socso loan?
This is despite the fact that the federal government has already bailed out 1MDB’s real estate division by assuming 1MDB’s RM2.4 billion worth of sukuk and another RM800 million borrowed from Socso.
In addition, the RM39 billion is still outstanding despite the fact that 1MDB has already disposed of its power plant assets for a total of RM9.83 billion.
Hence it completely defies belief that Najib was less than truthful with the material omission of more than RM39 billion worth of debt in his reply to my Bakri colleague.
Instead, the prime minister chose to extol 1MDB’s RM3.8 billion repayments, barely a-tenth of the scandal-ridden fund’s total debts.
He even carefully worded his happy conclusion, that 1MDB no longer owes any bank any money or any other short-term debts, to skew the impression and perception of those who are not alert or informed.
If this does not crown Najib the devious King of Obfuscation in Malaysia, then I certainly don’t know what would.

TONY PUA is DAP National publicity secretary and Petaling Jaya Utara MP.- Mkini

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