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23/01/2017

1MDB 2014 AUDITED ACCOUNTS WINDOW DRESSING. RM51 BILLION IN ASSETS? IN YOUR DREAMS NAJIB!

When 1MDB's 2014 Group audited accounts were delayed and only released in November 2014, the results were shocking! A profit after tax of RM778 million in 2013 had nosedived to a loss of RM665 million!

The profit of RM778 million in 2013 had in fact been deliberately inflated by paper gains of RM2.7 billion arising from revaluing development land. Without that artificial paper gain and other paper losses, 1MDB actually, operationally, lost about RM349 million!

The LOSS of RM665 million in 2014 had also been deliberately inflated by paper gains of RM897 million, again arising from revaluing development land. Without that artificial paper gain and other paper losses, 1MDB actually, operationally, lost about RM976 million!

As a Group, 1MDB had actually lost staggering hundreds of millions of ringgit every year from 2011-2014:

2014 (976) million loss
2013 (349) million loss
2012 (525) million loss
2011 (282) million loss

Not surprising then, that it was from 2011 that 1MDB's top executives started to add in huge paper gains on land to mask real operating cash losses.

Below is the 5-year Profit & Loss Account from 2010 - 2014 excluding paper gains:


Given also that by 2014, it had borrowed some RM42 billion and incurred further other derivative debts of RM4.11 billion, the interest cost had risen to RM2.4 billion, with insufficient cash to service loan interest or build up reserves for loan capital repayments. Goldman Sachs alone had netted some  unheard of 11% commission and fees on US$6.5 billion in loans it had raised for 1MDB. Some of the interest rates 1MDB had agreed to defies belief when compared to the market.

If we exclude the results of IPP companies from above P&L, the Holding Company's (HC) financial results would be far worse. Do remember that by consolidating the P&L of IPP subsidiaries (as required by company law), the HC's results look impressive. But in reality, unless the IPPs pay enough cash dividends regularly, the HC will have little cash flow to service the $42 billion of loans!!!


Significantly though, as has now been confirmed by the USA Department of Justice (DoJ) Report and Affidavit on kleptocracy by Najib, Rosmah, Jho Low and top 1MDB executives, massive fraud and false accounting had taken place at 1MDB. Amounts classified as 'Investments Available for Sale' and 'Deposits' in 1MDB's balance sheet were backed by worthless "Units" and valuations and confirmations by dubious "fund managers" linked to Jho Low.

When the 2014 accounts were released and DAP's Tony Pua lambasted 1MDB's poor performance and management, its Chairman of Board Advisors, Finance Minister and Prime Minister Najib boasted that 1MDB had RM51 billion in assets. Yes, RM51 billion if you inflate the figures with paper gains and huge amounts of goodwill - some RM7.5 billion at cost - that should have been written off.

What these almost $7.5 billion of goodwill in the books of the IPPs represents is a mystery to me, especially since you can't write a cheque and cash it. 

The balance sheet above is shown in a simplified form to give us a very clear picture of the real financial position of 1MDB. The RM32 billion deficit is more realistic, given that from April 2014 to mid-2016, 1MDB was unable to service interest or loan capital repayment without bail out loans from the MoF, local banks/GLCs and Arab "partners". 1MDB also claimed that it had paid US$6.5 billion to IPIC and its subsidiaries. However, this is now a confirmed fraud, with the money diverted to parties linked to Jho Low and Najib. At current US$ exchange that is an additional RM28 billion.

That brings 1MDBs loan debts to about an astonishing $84 billion currently - a disaster of Titanic proportions by any reckoning, as follows:

Loan Debts above - RM46 billion
Exchange Rate Loss - RM10 billion
IPIC debt - RM28 billion

Total - RM84 billion

Little wonder then that Najib is busy selling off 1MDB's prized land gifted to it at below market value.

60% of Bandar Malaysia has been sold to a China consortium in 2016. The IPPs too were flogged off to another China state company for RM9.83 billion, resulting in a RM2 billion loss. What happened to Najib's original explanation for buying the IPPs at inflated valuation - that we need to be in control of our energy banks?

What is curious though is that 1MDB CEO Arul Kanda had said in 2015 that 1MDB had utilised RM18 billion cash to acquire the IPPs. CLICK HERE. However, the 2013/2014 audited accounts show that 1MDB only paid RM12 billion for the IPPs. What happened to the balance of RM6 billion? CLICK HERE for the 2014 audited accounts. As the RM6 billion loans were "inherited" from the IPPs, there was no cashflow out. So, why would 1MDB have paid RM6 billion to any bank or entity or person?

The whole world now knows that Najib is desperate to cover up the huge hole in 1MDB's balance sheet caused by his own greed, utter incompetence and thieving and looting mentality. Sarawak Report had exposed as far back as July 2016 that he was planning to inflate the cost of the East Coast Railway Link project by RM30 billion. China once again seems to be coming to bail him out.

What else will Najib flog to China to save his skin, and at what cost to the sovereignty and finances of the nation?

NB: All figures quoted here were derived from 1MDB's audited accounts for 2010-2014. The figures have been re-arranged so as to show the true profit/loss and balance sheet positions without cosmetics and window dressing. The respective auditors were:

2013 & 2014 - Deloitte
2010 - 2011 - KPMG

It is relevant to note that Deloitte gave clean audit reports for 2013 and 2014. In 2016 however, in the wake of the USA DoJ action on kleptocracy at 1MDB by mainly Najib, Deloitte issued a startling statement that their 2013 and 2014 reports could not be replied upon, and subsequently resigned. Under no circumstances can audit reports accepted and approved by shareholders, be withdrawn by the auditors unless fraud is proven, on which Deloitte has been absolutely silent. A lawsuit has yet to be filed by anyone against Deloitte for professional negligence!

05/01/2017

HOW CRIME MINISTER NAJIB BLEW RM2.6 BILLION MISAPPROPRIATED FROM 1MDB/SRC!

On 22 March 2013 and 4 April 2013 US$620 million and US$61 million, total US$681 million, were respectively misappropriated/embezzled by Malaysian Crime Minister Najib and his wife Rosmah, from funds raised in the US by Goldman Sachs for 1MDB, a 100% owned Ministry of Finance (MoF) company. This money was secured by sovereign guarantees issued by the MoF, where Najib doubles up as Minister numero uno. It was credited to Najib's personal bank a/c with Ambank.

This in ringgit terms amounted to RM2.08 billion. When the theft was discovered and exposed later in 2015 by WSJ and Sarawak Report, due to the exchange rate then, it was reported as RM2.6 billion. Najib, as one could expect from a serial liar and thief, claimed that the RM2.6 billion was a donation from Arab Royalty. He also stupidly claimed that although the money was credited to his personal bank a/c, it was NOT a transaction that could be interpreted as a personal transaction, and that he did not personally benefit from the money! 

It was later confirmed by both the WSJ and our Attorney General Pandi that US$620 million was returned by Najib to the same bank a/c of the off-shore company that it had originated from, Tanore Inc, in Singapore. CLICK HERE.

Other than the RM2.08 billion, more than a billion ringgit had also flowed in and out of Najib's personal bank a/c in Malaysia between 2011 to 2013. As much as RM2 million was discovered in Rosmah's bank account about which MACC has done nothing.

Much of this was also from SRC, another 100% owned MoF company. In 2011, 1MDB had borrowed RM4 billion from the government's pension fund KWAP. Till today, Najib, MoF Chief Secretary Irwan Serigar Abdullah and Chief Secretary to the Government Ali Hamsa have lied about what the RM4 billion was used for. Expert analysts can only account for RM400 million (10%) of it.

It is obvious that Crime Minister Najib and his partner in crime Jho Low misappropriated the balance of RM3.6 billion and fooled (naive/stupid) auditors into thinking the money had been "invested" in funds represented by "UNITS" issued by an unknown offshore fund manager. When the heat became unbearable, Najib had the entire RM4 billion "investment" now worth zero, illegally transferred to SRC, a dark hole from which no information emerges because of Official Secrets Act (OSA) classification.

But information leaked by the BNM Task Force to WSJ and Sarawak Report reveals that not only did Najib benefit and enrich himself and his family members from the infamous RM2.6 billion, he also bought votes and rigged the 2013 general elections! This is a treasonous crime for which Najib, Rosmah and the entire UMNO/BN government should rightly be prosecuted and sentenced to life imprisonment in Bamboo River Resort!

SRC and 1MDB has also financed the Haj trips to Mecca of thousands of Malaysia Muslims under misguided and Islamically Haram, Corporate Social Responsibility (CSR) programs. Misguided, because SRC and 1MDB are fully government -owned companies meant to benefit the population as a whole, and Haram, because they used tainted money stolen by Najib and chanelled via SRC!

Below is a table of the staggering sums of money stolen by Najib and Rosmah and spent in the heist of the century! It does not represent all the money embezzled by Najib and Rosmah or all the illegal payments out as information is being leaked painfully slow. 

As they say my dear Malaysians, read 'em and weep!