The World Anthem




by bamboo lego abdullah, donplaypuks® intrepid correspondent for bumiputra con-struction and infrastructure con-tracts

Sometime in 2006, Pembinaan PFI (PPFI) was incorporated as a wholly owned subsidiary of the Ministry of Finance (MoF), as part of the government's initiative to garner Private Finance Initiative funding under the 9th Malaysia Plan (RMK-9) for public infrastructure projects i.e. funded from private capital.The main beneficiaries of the PFI funding were to be smaller Bumiputra contractors.

No sooner was the company incorporated, the MoF discovered, surprise, surprise, that private capital was not exactly champing at the bits or salivating and smacking its lips to throw money at inexperienced Bumiputra contractors with little track record to undertake large public infrastructure contracts. The expected stampede of Malaysia's mollycoddled home-grown entrepreneurs (read as fraudtrepreneurs) beating a hasty path to the doors of PPFI was largely conspicuous by its total absence.

So, true to form, some financial genius at the MoF came up with a convoluted, but really quite imaginative and brilliant creative scheme, so that RM 30 billion could be raised. After all, if PM Najib, who is also the Finance Minister, and his head honcho Chief Secretary to MoF, Mohamad Irwan Serigar Abdullah, had decreed it, the project that cannot, must not, shall not and is too big to fail, like the RM46 billion indebted 1MDB, must go ahead. 

It is likely that they also consulted the Minister in the Prime Ministe's Department in charge of the EPU (Economic Plundering Unit, to some, Economic Misplanning Unit to others), Tan Sri Nor Mohamed Yakcop. He was also Minister of Finance II between 2004-2009. Nor Yakcop has an extraordinary, interesting and chequered past to say the least. In the early 1990's he was THE forex trader who asked to leave Bank Negara Malaysia (BNM), in the wake of some RM6 billion in forex losses incurred while, by all accounts, BNM gambled wantonly and merrily on the US dollar. The scandal was only exposed when Lim Kit Siang of DAP questioned then prime minister Mahathir Mohamad in Parliament about a RM6 billion "hole" in BNM's balance sheet. Mahathir swiftly responded with copious servings of over-sweet maple syrup and double waffle quaffle. 

Some years later, Anwar Ibrahim revealed that the actual losses were closer to RM30 billion, and had been concealed by creative accounting, whereby revaluation paper gains from gold and other reserves were netted off against the RM 30 billion forex losses. (Is there a link, I wonder, between this sleight-of-hand and 1MDB concealing cash operating losses of some RM3.5 billion with paper gains of RM3.6 billion from revaluing the Sungei Besi land given away at below market price by the government to 1 MDB? I mean what are the chances that Nor Yakcop was not consulted by PM Najib vis-a-vis 1MDB?).

Bolihland's (crooked model of) Warren Buffets had spoken, and lo, come hell or high water, no opposition shall be brooked! Faster than you could say "Don't you dare touch the EPF", a scheme was synthesised to milk the Employees Provident Fund (EPF) for RM20 billion and possibly, more. We must admire the cracking and crackling minds that hatched up this structure:

1. The Federal Lands Commissioner (FLC) leased out 186 parcels real-estate from its land bank all over Malaysia, to PPFI. The consideration for the lease was "a nominal sum", presumably RM1.Was this give-away price in the national interest?

2. PPFI in turn sub-leased the same 186 parcels of land back to FLC for RM29.18 billion in rentals, payable semi-annually over 15 years between 2013-2027. Mathematically, if RM29.18 billion is discounted backwards at the rate of perhaps (I am too lazy to work out the exact rate) 8%, the net present value of it would probably be equal to RM 20 billion.

3. PPFI then used the security of the land it did not own to borrow RM20 billion from EPF. It's not clear what due diligence EPF did on the 186 parcels of land and how they valued it. E.g, if PPFI wished to borrow RM20 billion, the the land value, assuming 70% margin, should be close to RM30 billion. Who carried out the valuation and on what basis. How much is raw unconverted agricultural land in the boondocks worth, 50cents per sq. ft.?

4. In 2013, PPFI raised another RM10 billion, though who it borrowed this money from has not been disclosed. Presumably, more land was leased and sub-leased by government decree.

5. Up to 2013, some RM23.5 billion out of RM30 billion had been "disbursed" by PPFI. However, who the beneficiaries were or for which infrastructure projects, has not been revealed to the Rakyat! It's a big secret.

6. With RM30 billion worth of land, PPFI was next to Petronas, Khazanah and 1MDB, the largest borrower, and the second largest land-owner, in Malaysia.

7. PPFI's audited accounts for 2013 have not yet been filed.

MoF Chief Secretary Mohamad Irwan Serigar has not responded to any enquiries about this project by the press or DAP MP Ong Kian Meng who first broke the news in 2015. CLICK HERE and HERE. 

It was followed up with a full expose by Kinibiz.CLICK:

and HERE . 

Basically, the government is renting back land for RM29.18 billion that it had no other use for (and therefore must have a very low valuation) and still does not, and that it owned and previously did not have to pay a cent for in rentals!!

Now here is the coup de grace. The Persatuan Kontraktor Melayu Malaysia (PKMM) or the Malaysian Malay Contractors Association hasn't a clue about PPFI or a cent of its RM23.5 billion "disbursements". So, who and for what did PPFI dish out these billions of ringgit?

And, how is it a private finance initiative, if at the end, it is the Taxpayer who will be coughing up RM29.18 billion over 15 years so that the FCL can pay PPFI so that it can repay its RM30 billion loan to EPF and other mysterious lenders?

You can bet your bottom ringgit that when these kinds of twisted company structures are set up, no good will come out of it, just as in the case of 1MDB and dealings with PetroSaudi and Jho Low's Good Star Ltd. in the Cayman Island and Switzerland. You can also see the same mind working on the PPFI scheme as in 1MDB - very low capitalisation and unheard of gearing/borrowing using sovereign funds and guarantees, RM 46 billion vs RM 30 billion!!

When Chief Secretaries to Ministries and the Prime Minister who is also the Finance Minister are not open and forthcoming at all to legitimate questions posed to them by elected MP's, it's a safe bet that some ugly deal is behind it all, and like 1MDB, the failure of such machinations resting on quicksand and bamboo-stilt foundation, will rock the financial stability of the country like no other. What exactly is the Chief Secretary to the Government, Tan Sri Ali bin Hamsa monitoring besides ESSCOM?

Is the contract between FLC and PPFI legal or can it be construed as a phoney one, similar to that between 1MDB and PetroSaudi?

Who are the auditors, and did they carry out in-depth audit checks to ensure the RM23.5 billion actually went into the hands of bona fide Bumiputra contractors, or did PPFI use the money for some other dodgy purpose, as did Jho Low with 1MDB's US$700 million? Do have fearless bloodhounds as our trusted guardians, or sedated watchdogs, poodles and lap dogs?

What are BNM and the Auditor General's take on this? Are they going to wait for a $700 billion sub-prime like crisis to explode before they engage the 1st gear? 

Why the total silence from PM Najib, MoF Chief Secretary Mohamad Irwan Serigar Abdullah, The Chief Secretary to the Government Tan Sri Ali bin Hamsa, BNM and the Auditor General?

As the saying goes, "Oh, what a tangled web we weave, when we (continue to ) seek to deceive!"

 Donplaypuks® with PPFI man!

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