Tuesday, January 12, 2016

Public Funds for 1MDB Bailout

1MDB had announced on December 31, 2015 that the Bandar Malaysia deal with the Iskandar Waterfront Holdings-China Railway Engineering Corporation (IWH-CREC) consortium was priced at RM7.41 billion, and that the latter had paid a 10% down payment.
On January 04, 2016, in a filing with the Hong Kong Stock Exchange, CREC mentioned the sum that the JV paid for 60% of the equity interest in Bandar Malaysia amounted to only RM5.28 billion, of which CREC’s share is RM2.639 billion.
1MDB were left red-faced. The following day, they clumsily scrambled to their feet and pointed out that the RM7.41 billion was actually based on a land value of RM12.35 billion.
Furthermore, 1MDB said that "the sum agreed was based on certain assumptions, which are subject to further negotiations during the completion period between January and June 2016”.
And they added that “adjustments may be made to the RM7.41 billion land sale valuation, depending on whether or not certain Bandar Malaysia related liabilities can be passed to the consortium”. 
These are words that are clearly meant to confuse everybody! I am not going to delve further into what Petaling Jaya Utara MP Tony Pua lavishly described as “clever language and incongruous financial gobbledygook”.
Suffice to say, simple arithmetic tells us that there is that difference of RM2.13 billion between the two sets of numbers given by the two parties. Who would you believe?
You don’t need my answer – you already know! Except for the Najib sychophants, Malaysians no longer trust what 1MDB tell us.
Enough of indulging in arithmetic. As for this so-called deal, it is plain to Malaysians that government-owned 1MDB bought the Sungai Besi land on the cheap and then sold it back to government-owned IWH at multiple times the price that they originally paid for. 
And public funds were used because the Federal Government are a strategic partner in IWH through their subsidiary – Iskandar Waterfront Sdn Bhd – in which Khazanah Nasional Berhad and Employees Provident Fund are shareholders through Iskandar Investment Berhad.
Half-witted 1MDB president and executive group director Arul Kanda Kandasamy with a dismissive air of nonchalant indifference insisted it was not a bailout. And yesterday, PM Najib Razak himself reiterated that public funds were not used at all.
Okay, I can understand their defensiveness. And they don’t like the words 'bailout' or 'public funds'. If it makes them happy, I shall use other words. I shall call the 1MDB undertaking a deception, a chicanery, a trickery.
On Saturday, I was at Bankers Club in KL’s Jalan Imbi on Saturday to attend the MIMKL Toastmasters meeting. I was the Table Topics Evaluator.

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