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28/04/2013

1MDB - A RM20 BILLION FINANCIAL MELTDOWN FIASCO WAITING TO HAPPEN? WHY YOU SHOULD VOTE PAKATAN IN & NAJIB & BUMNO/BN OUT, OUT, OUT TO OBLIVION!

by bernie madhoff, Donplaypuks® intrepid genius financial correspondent for $20 billion james bond affairs

Malaysians have plenty to worry about 1MDB's bond issues totalling some RM20 billion to-date, 100% guaranteed by you and me through sovereign gurantees so generously approved by PM Najib. According to KiniBiz (CLICK HERE), there are allegations that 1MDB's secretive and over-the-odds ways of pricing bonds and raising funds and investing may well be laying the foundation for a giant ponzi scheme sting.

Originally, 1MDB was called TIA (Terengganu Investment Authority). The Federal Government was supposed to pay TIA the royalties due from Petronas to Terengganu, to be invested in a sovereign fund, for the benefit of its people. Najib then hijacked the idea, cancelled TIA and created 1MDB, a Federal entity under his control, now supposedly a sovereign fund for the benefit of all Malaysians. 

This of course completely ignored and bypassed Khazanah, the Government's investment arm, since that's exactly what it is supposed to do - invest Taxpayer's money in viable projects for the benefit of all Malaysians. But then cunning, thief-minded and serially lying Najib did not wish for TIA, with its billions of ringgit, to be managed at State level in a transparent and accountable manner. Our former Agong and King of Terengganu had already as far back as 2008 shown his independent mind by refusing to accept UMNO's preferred candidate for the post of Menteri Besar (Chief Minister). By moving it to Federal level, Najib could manipulate the funds in total secrecy without worrying about Terengganu and Royal whistleblowers.

When IMDB's CEO, Directors, "Advisors" and Trustess (one of whom is PM Najib) all bleat the same tune - that the accounts have been audited by an international firm, and filed in accordance with company law - we have much to worry about. Not only because these accounts filed with the ROC (Registrar of Companies) are in the abbreviated form. Such accounts do not tell us who the bonds were issued to at fanciful discounts and interest rates, why funds were raised overseas at interest rates way above international norms or why foreign countries are issuing default guarantees and at what reward to them. These audited accounts cannot explain why 1MDB paid over the odd premiums (billions of ringgit) to acquire IPP's (Independent Power Producers) owned by UMNO-linked cronies and that are due to expire in a few years,when by holding out they could have it for a song!

Most importantly, it does not tells us if 1MDB was forced to appoint a certain local bank controlled by the brother of a prime minister, with exclusive rights to its bond issues. Tellingly also, 1MDB's detailed audited accounts are not posted at its website at http://www.1mdb.com.my/.

Consider that PKFZ was also audited by reputable audit firms; yet today our Government is staring at the possibility of a total bailout bill of RM12.4 billion, having already forked out RM4 billion to save blunders and crony and crooked dealings by UMNO and MCA at Ministerial and Cabinet level, and fraud at corporate level. 

Remember too that when the sub-prime and CDO crises hit the United States of America in 2008, necessitating a US$700 BILLION bailout of Wall St. and banks, the CEO's of Lehmann Brothers, Goldman Sachs, Morgan Stanley, Merril Lynch, AIG, Citibank, Fanny Mae and Freddy Mac etc, ALL, without fail, also claimed their accounts had been audited by the "Big Four" and filed in full compliance of all laws. But in USA Congressional and Senate hearings, evidence of massive fraud and financial mismanagement surfaced. All the CEOs had to offer, while lying blatantly with a poker face, is that they had been sincere in their dealings and decisions i.e. $700 billion dollars of it. If sincerity were gold, there would be another Klondike-like stampede among the "financial experts" in USA and Europe to trade and gamble on it, while blaming China if they lost money.

Here is another huge reason to worry about. Najib and 1MDB are courting the same "financial experts" in their clandestine wheelings and dealings. Thieves of a feather, surely flock together? And who is PM Najib most relying on - Goldman Sachs whose CEO Lloyd Blankfein, at the height of the USA CDO crisis, saw no conflict of interest in speedily short-selling the very shares he was urging his clients to buy at huge premiums!

And the sure kiss of death? Our PAC (Public Accounts Committee) pronounced that "1MDB acounts are healthy and in order". CLICK HERE. This is the PAC also under the chairmanship of Datuk Seri Azmi Khalid which determined that there was no hanky-panky in the RM8 billion Scorpene Submarine purchases contracts despite the gruesome murder of Mongolian Altantuya. CLICK HERE. The PAC also found nothing wrong in defence purchase of MIG fighter aircrafts totalling over $2 billion, where some $300 million of commissions were diverted by a procurement agent and ex-thief Minister of Melaka, to a fake off-shore company to deceive his partners!

The simple balance sheet facts about 1MDB are as follows:

1. Paid Up Capital - RM1 million
2. Total Bonds issued to-date - RM20 Billion
3. Total Investments and Cash/Profits - RM20 billion

From this, it is clear that:

1. The money that Petronas/Najib promised TIA, some RM2-4 billion a year, has not been paid into 1MDB's bank account. Where has it all disappeared to?  What on earth is Najib doing, allowing 1MDB to gear up at the rate of 20,000 times its paid up capital of RM1 million?

2. Why were all these bonds issued overseas? Surely, with 6% annual bond interest, Najib could have created a 1M Trust Sovereign Fund exclusively for Malaysians to invest in. Which Malaysian would not want to invest in such a fund, out of sheer patriotism? After all, not even the EPF pays 6% interest to its shareholders. More worryingly, Indonesia's central bank sold 10 and 30-year US$ denominated bonds 3 weeks ago with a yield of 3.5%. What on earth was 1MDB doing floating 6% bonds, and that at a discount of 20%?

3. Why raise funds in US$ overseas for ringgit denominated investments and development projects in Malaysia, such as the  RM26 billion TRX (Tun Razak Exchange) and the 196-hectare Bandar Malaysia mixed -development real estate development?

4. With bond interest averaging 6%, 1MDB will have to generate at the bare minimum, about RM1.2 billion a year to service debt. What is 1MDB's projected income and profit over the next 20 years, to justify debt vs minimum acceptable returns of 10% on its investments? IMDB's CEO is of course playing around with semantics by claiming it has no loans. A rose by any other name, smells the same. Call it bond or loans, it is ALL DEBT which is guaranteed 100% now by us, the Taxpayer.

5. By signing up with indecent haste the old and expiring IPP's, Najib has tied the hands of any new incoming government. With 55% electricity reserves, we do not need old or new IPP's. Since all IPP's require a guaranteed power purchasing contract with Tenaga to operate, once again Tenaga will be robbed blind to the tune of RM 15-20 billion a year purchasing electricity from IPP's it does not and will not need! But Najib, in his vindictive crony oriented endeavours, forgets that such transactions can be reversed if they are not in the public interest, fraud is proved or inducements (illegal commissions and bribes) paid to certain parties to bulldoze through the acquisitions.

6. Questions have also been posed to the CEO and Board of Directors of 1MDB if the off-shore incorporated PetroSaudi Corporation is the real McCoy, or as in the case of MIG fighter planes and ex-Thief Minister of Melaka, a fake entity created and headed by nominees, for the benefit of UMNO and its cronies.

7. It should worry everyone that among 1MDB's "advisors" is Nor Mohd Yakcop, now chief of the EPU (Economic Plundering Unit) under PM Najib's control. Nor Mohamed was the man who was sacked in the early '90's as chief forex trader of BNM (Bank Negara Malaysia) for creating losses said to be ranging anywhere from RM6 billion to RM30 billion!! With then PM Mahathir's connivance, the losses were originally illegally hidden in the accounts by netting off against revaluation surpluses from gold and other assets. The scandal only came to light when Lim Kit Siang of DAP (Democratic Action Party) astutely discovered the huge hole in BNM's balance sheet and forced Mahathir to admit the fiasco in Parliament. One may well ask what Nor Mohamed is doing back in Government, especially since no RCI (Royal Commission of Inquiry) has been held to determine if massive fraud was involved in a case which nearly wiped out all of Malaysia's reserves!!

8. We should nor forget how Sime Darby had to write-off over RM4 billion in its power & energy forays in Saudi and the Middle East. All the JV contracts were one-sided and drafted in Arabic which were badly translated, and proper due diligence was sacrificed to satisfy "more speed, less haste national service" calls by Badawi and Najib. Sime lost its case in the Saudi courts. Something like this is likely to surface if any of 1MDB's overseas investments in JV with PetroSaudi, Abu Dhabi or Qatar goes sour. Najib is bending so low in courting the Arabs as to shamelessly expose his total nakedness.

There are literally hundreds of questions that worried finanial analysts and Malaysians would like the answers to vis-a-vis 1MDB and its furtive operations. By stonewalling and hiding behind carefully worded PRspeak and civil service/civil serpent mentality waffle, 1MDB is not endearing itself to us. They can tell us (their 100% funders and owners) the truth, nicely and voluntarily, in a forthright manner, or be prepared to be dragged off in chains later (as soon as next month) and forcibly be made to talk! Are you with the Government of Thieves, or with the Rakyat? The choice is your, 1MDB!

Donplaypuks® with our RM20 billion, man!

10 comments:

Anonymous said...

The rich bumps will look at the billions, the poor souls will cherish happy lives, peaceful and manageable.

The rich bumps will never look at sekolah menengah kebangsaan. The poor souls will fill local schools to the corridor.

The rich bumps will look at names and companies who get projects, the poor will souls will queue for jobs at whatever company.

The rich bumps will wallop jobs at the corporate sectors, the poor souls will pray for government jobs.

The arent many rich bumps, but they can flick the so-called intelligent twists. But the majority, the poor souls will pray to God for the good lives they are having due to good governance.

The poor souls are always grateful. The rich bumps are mostly greedy.

Anonymous said...

1MDB.the only hedge fund in the world guarantee by govertment,

So far they buy all the rubbisg.Coal mine in Mongolia,Three Usless public company from Taib family and Two over price power plant.

1MDB is fully control by J Lo and inderectly Rosmah.

On new year eve 2013,Najib,Rosmah and J Lo spend their new year celebrating by chartering a 747 Beoing ,flying from LA to Sydney just to catch the first sunrise in Sydney.Then They flew in the morning 2013 from Sydney to Las Vages,just to catch the second sunrise.

All the trip paid for by 1MDB.

Ha ha ha what a fun.

Anonymous said...

Why was the 1MDB CEO Sahrol sacked?
Not paying enough to Rosmah?

Ellese A said...

I really hate it when people mislead and claim moral high ground?

The 1st gen in thousands of mw are expiring lah. So kena replacelah. the new process are by tender you dumb fool. No more direct negotitation. The last few tenders of IPP mostly went to TNB subs who had to make it competitive lah. What non sense.

Donplaypuks® said...

I think it's you who is a dumb fool. Tenaga has electricity over-capacity of 55%.

So, there was no need to buy Ananda Krisnan or Genting's expiring IPP's, and certainly not at a whacking premium to give them on average RM$2 billion book profit on 20-year old assets. They had already made huge profits on take-or-pay guaranteed contracts and recovered their capital. Why should 1MDB give them 2 bites of the cherry? A very suspicious transactions by any standard. You never read Ani Arope's 2008 STAR interview and how the EPU and Mahathir connived to lumber Tenaga with the IPP burden?

Try and wrap your brain around this:

TENAGA DOES NOT NEED THESE IPP'S. IT CAN BUILD ITS OWN CAPACITY WHERE & WHEN NEEDED AT MUCH, MUCH LOWER COSTS WITHOUT PAYING CON JOB PREMIUMS TO ANY IPP!!

"The last few tenders of IPP mostly went to TNB subs." And where exactly were the open tenders? What are you talking about?

Dpp
we are all of 1 Race, the Human Race

Anonymous said...

I agree with you, DPP. Just as TNB does not need any IPP's to provide any power requirement, MHA does not need any toll operators to build our highways. MHA surely did not need a suspended UEM to build the NS highway and collect guaranteed tolls over a certain period. MHA could easily have tendered out the various sections to competent contractors such as IJM, Road Builder, Gamuda and others. Tolls at a fraction of the present PLUS rates could be collected over a longer period, even perpetually.

That is what a caring government should have done for the Rakyat, not building more tolled highways which further burdened us.

The few articles by Koon Yew Yin over the last few days speak our minds. The one on "Remember these when you vote" which touches on water, highway and electricity, could be read at https://www.freemalaysiatoday.com/category/opinion/2013/04/29/remember-these-when-you-vote/

Adam.

Ellese A said...

I see. Ok. I know what. Why don't we appoint mahaguru Dpp as our system planner amacam? Lets see how he plans our electricity demand. Nak tak? Will it be brilliant? Or utterly stupid.

First lets gets the facts right. We look at peninsular electricity generation capacity. Why not Sabah and Sarawak? Coz they're not connected. Whatever they do, we can't use their electricity.

So what is actually the reserve. Is it 55%? Lets see Energy Commission figure. Latest figure (2011) says that the electrical generation capacity for peninsular is 21000 MW (megawatt). What does this means? the maximum electricity all plants can produce is 21k MW.

So what's the usage? According to EC, 15500MW. There is a difference of approx 6000MW excess capacity. I'm not sure how 55% was derived from. But the next question is this 6k a lot?

How do we decide? We see how much demand and how much capacity we have in the future. Now its public knowledge that in a couple of years, all 1st generation IPP will retire. What's the total production lost from the system because of it? Its 4300MW. (Just google. its public info) It means were going to be short of 4300MW.

What about demand? EC predicted demand to grow by 3%++ per year. Meaning to say if 3% from 2011 we need another 3100 MW by 2016.

So if we appoint DPP who doesn't believe we should build anymore power plant, what will happen in 2016. Hmmm. 6000 minus 4300 (1st gen IPP lost) and minus another 3100 is ... Alamak tak cukup electricity lah.

So you see how stupid this mahaguru DPP. Pretend to know. But really an ignorant dumb fool.

Donplaypuks® said...

You again demonstrate your poor reading and understanding of artcles posted.

The issue is not the generation demand and capacity; it is why Tenaga was arm-twisted by Mahathir and the EPU to pay anywhere from 16 cents to 28 cents per kw when it could do so at 8 cents per kw. Check out ex-Tenaga MD Ani Arope's exposing Mahathir's con job at http://malaysianunplug.blogspot.com/2008/07/ani-arope-lambasted-independent-power.html

Tenaga had both the finances and the muscle in the market to raise additional capital and build capacity according to demand ALL ON ITS OWN, without being robbed and raped blind by Mahathir/UMNO/ MCS crony-related IPPs. This costs Tenaga between $15-20 billion every year.

Ditto for toll highway con-cessionaires like PLUS, Kesas, Maju etc. The Govt could have built and financed it all through bonds repaid from much, much lower tolls. Instead, the PEOPLE were/are being robbed by UMNO/BN.

And then 1 MDB goes and pays another whacking premium to acquire the expiring IPPs. 1MDB's entirely taxpayer funded and therefore, we are the ones being conned again and again!

This is the UMNO theivery that needs to be stopped. If you are blind to it, or perhaps, hypocriticaaly choose to pretend it never happened, be it upon your dumb head.

Dpp
we are all of 1 Race, the Human Race

Anonymous said...

My wish list for investigations & full disclosure to rakyat

1. EPF - how much has been taken, by whom?
2. BBMB - how much lost, who dunit?
3. Perwaja Steel
4. KLCC prime land so to crony for RM100 when it was worth RM1bil (ask LKS, he brought up in Parliament)
5. Who sold their lands to KLIA to build airport?
6. Bakun - it is still ongoing, make public documents rgdg "so-called maintenance" (current)
7. IPP - stop subsidised gas now, 24hrs
8. Highway concessionaires - investigate the documents, politicians guilty of lopsided agreements shld be charged for abuse of power. Both culprits to be charged.
9. Felda reserves RM6bil- where has it gone?
10. SOCSO - make transparent where all the money went?
11. Langat dam - do we need that project?
12. Petronas accounts
13. Lynas - got recvd kick-ba;;
14. Philharmonic - entertainment for the so-called elite at Petronas' expense RM300 mil a year?
15. National service RM550 mil a year?
Am sure there are many thousands more. We need to get back the hundreds of billions. By hook or by crook.

Ellese A said...

You premise your argument that 55% over capacity. Then you started your false irrelevant assertions.

I proved it to you that your argument has no basis and merit. In fact illogical. From there there's no issue since everything now is on bidding including TNB.

Anil's comments were for 1st gen. Even extension of new PPA for first gen plant is under new fairer terms.

The fact that IMDB managed to outbid the rest for PPA extension shows its a good buy.

You're out of line here with your ridiculous unjustified assertions.