A few days ago Muhyiddin Yassin said he does not want to talk about the RM2.6 billion and the special account in the Prime Minister’s name.
This, Muhyiddin said, is because this is the normal practice from way back.
What Muhyiddin means is this is the normal practice since 1988 when Umno Baru was formed (not since 1946 when Umno was formed).
Musa Hitam also said the same.
And this special account is in the name of the Umno President who just happens to also be the Prime Minister of Malaysia.
So is it weird or abnormal for the Prime Minister to have a special account, which is to finance the party’s political activities, not only for Umno but for Barisan Nasional as well?
Not really as long as the Prime Minister is the Umno President and the Chairman of Barisan Nasional.
Even Muhyiddin agrees with this. And Muhyiddin himself said this has always been the practice from way back (or from 1988 when Umno Baru was formed).
But then not many people outside the circle know this, not even the grassroots party people.
And for sure the Malaysian-on-the-street does not know about this arrangement.
In fact, Malaysia Today has been revealing for more than ten years that general elections cost money and that each general election costs at least RM1.5 billion. No one responded.
No one asked questions or confirmed or denied this. They just kept very quiet and showed no interest.
Today, Tun Dr Mahathir Mohamad himself confirmed it.
He confirmed it when he questioned the RM2.6 billion and asked why Prime Minister Najib Tun Razak needs so much money for the elections when during his time it only cost RM1.5 billion.
So RM2.6 billion is more than RM1 billion over-budget by Mahathir’s standards.
But the RM2.6 billion was not all used.
And it was used not just to finance the 2013 general election but also to finance Barisan Nasional’s political activities.
And what was not used was returned to the donor. Mahathir is pretending that he is not aware of all this.
Nevertheless, the RM2.6 billion is separate to the issue of 1MDB although Mahathir is trying to make it appear like both issues are connected.
Mahathir is saying that the RM2.6 billion came from 1MDB (Mahathir says stolen from 1MDB) so that means the RM2.6 billion and 1MDB issues are connected.
This is the first lie that Mahathir is perpetuating.
Even when it is pointed out that the RM2.6 billion was a donation, Mahathir replies that the Arabs are not that generous and even if they do give you a donation that large there must be certain strings attached.
As the Malays would say: Mahathir tak mahu kalah. He must always have the last word.
Malaysians first became aware of the 1MDB issue in December 2014 when Khairuddin Abu Hassan made his police report.
Then, in January 2015, a new president/CEO, Arul Kanda Kandasamy, took over the reins of 1MDB and set about planning the debt reduction and rationalisation exercise of the company.
That is already public knowledge, though.
What is not public knowledge, however, is that three months before December 2014 there were already moves to sabotage 1MDB and to bring about its collapse. And Bank Negara Malaysia was the instrument used to destroy 1MDB.
Reuters came out with this report on 15th January 2015:
‘Malaysia’s second-richest man, Ananda Krishnan, is in talks with state firm 1MDB to become a cornerstone investor in a long-delayed $3 billion listing of its power assets, two people familiar with the matter said on Thursday.
The 76-year-old billionaire is considering taking at least a 5 percent stake in 1MDB’s energy business, one of the people said. The sources couldn’t give a value for the potential investment as talks are continuing.
Such a move by Krishnan would be a major boost for cash-strapped 1MDB. The company, whose advisory board is chaired by Prime Minister Najib Razak, faces mounting criticism of its strategy. It plans to use funds from the initial public offering to cut a near $12 billion debt pile and to expand its business.
The IPO is now likely to take place in the second quarter of this year, according to one person involved in the deal.
“The uncertainty (with 1MDB) is what’s causing the volatility in the market,” said Wellian Wiranto, economist with OCBC Bank in Singapore.
“If it comes to a point where it’s clear that 1MDB doesn’t have issues, then I guess it will be net positive for market sentiment.”
“Both parties (Krishnan and 1MDB) are now working on the terms,” said one of the sources, who declined to be named as the matter was private.
Proceeds from Krishnan’s investment could be used to repay the bridge loan. The loan is owed to the country’s largest bank, Malayan Banking Bhd, and smaller lender RHB Capital Bhd, and was guaranteed by Usaha Tegas, according to the people familiar with the talks.
The loan guarantee came as part of a transaction Krishnan struck with 1MDB in 2012, when the tycoon sold his power company Tanjung Energy to 1MDB for $2.8 billion.
“They are almost there in terms of a deal,” said one person familiar with the discussions, saying that an agreement would be reached by the end of the month.’
When 1MDB first bought Ananda Krishnan’s power companies in May 2012, 1MDB obtained a RM6.17 billion syndicated bridging loan from a consortium of borrowers led by Maybank.
As part of the deal, Ananda Krishnan had also signed to subscribe to RM2 billion worth of shares in the planned IPO.
In May 2014, 1MDB paid off RM670 million of the RM6.17 billion bridging loan and restructured the remaining RM5.5 billion into a RM3.5 billion term loan and a RM2 billion short-term bridging loan expiring in November 2014.
This short-term RM2 billion bridging loan led by Maybank was fully guaranteed by Ananda Krishnan, which included RM1 billion of collateral pledged with the banks.
In August 2014, certain senior members of the 1MDB management were approached by representatives of Mahathir and Tun Daim Zainuddin who had wanted them to act as moles within 1MDB with the stated aim of sabotaging the impending IPO.
This concern about Mahathir’s and Daim’s impending attacks was raised in the 1MDB management meeting and brought to the attention of the then 1MDB CEO, Mohd Hazem Abd Rahman, where it was deliberated.
However, the management was assured that the IPO was well on track and any attempt to sabotage it would fail.
The following month, in September 2014, it was announced that Maybank was appointed the lead global bookrunner, advisor and underwriter for the planned Edra IPO, which was expected to raise between RM3.5 billion to RM5 billion – with the proceeds meant to pay off this RM2 billion bridging loan and for other purposes.
Then something happened in that same September 2014 that put a stop to what would have been a very viable proposition and which would have made 1MDB profitable.
This was what Reuters reported on 12th September 2014:
‘Malaysian state investor 1Malaysia Development Bhd (1MDB) has delayed a more than $3 billion IPO due to a longer-than-expected due-diligence process and negotiations around the restructuring of a 5.5 billion ringgit ($1.7 billion) loan, people familiar with the matter said.
The IPO, which was due to be launched in the fourth quarter of this year, is now likely to take place in the first few months of 2015 at the earliest, said the people, who declined to be named as the matter remained confidential.
1MDB, seen as a cross between a sovereign wealth fund and a private investment vehicle, is struggling with a debt burden exceeding $11 billion. It plans to reduce some of this debt by selling its power assets via the IPO.
In May, the state fund restructured a 5.5 billion ringgit bridging loan into two tranches: a 3.5 billion loan due after 123 months and a 2 billion loan due in November, according to data from LPC, a Thomson Reuters unit specialising in loans.
The 2 billion tranche, however, is likely to be extended for several more months or pared down through internal funds, easing the pressure off 1MDB to urgently pay off some of its debt, the sources said.
Shahriza Embi, senior vice-president of corporate communications at 1MDB, did not reply to emails seeking comment.
According to LPC, Maybank International Ltd and RHB Bank are mandated lead arrangers and bookrunners of the restructured loan. Maybank executives declined to comment while RHB Bank officials were not immediately available to comment.
The 5.5 billion ringgit bridging loan has already been extended twice. It was originally part of a 6.17 billion loan 1MDB took from Maybank Investment Bank in 2012.’
On 2nd November 2015, Malaysia Today published an article titled ‘How 1MDB was sabotaged’ (Read Here).
In that article we said: Why did they raid Deloitte’s office and why did they inform the media and the opposition portals about an impending raid prior to the raid?
Was this part of a negative publicity exercise against 1MDB?
And surely they would know that such a move would torpedo the IPO and sabotage 1MDB’s efforts at solving its cash flow problems.
In July 2015, a Special Task Force comprising Bank Negara Malaysia (BNM), the Attorney General’s Chambers (AGC), the Royal Malaysian Police (PDRM) and the Malaysian Anti-Corruption Commission (MACC) raided Deloitte’s office (1MDB’s auditors) and seized 1MDB’s accounts and documents, which basically threw a spanner in the works and brought the rationalisation and debt reduction exercise to a grinding halt.
This was how Arul Kanda explained it:
“A failed listing exercise for 1Malaysia Development Bhd’s (1MDB) energy assets last year (2014) is the main contributor to the firm’s present financial difficulties.
1MDB had two targeted dates in which to list the assets, which are now held under its power unit Edra Global Energy Bhd.
The first was in November 2013 and another date was set for November last year (2014).
In both circumstances, for various reasons including internal and external factors, the initial public offering (IPO) did not happen.
When the IPO failed to materialise, a mismatch arose between the interest charges that needed to be repaid in the short term as well as principal payments, Arul explained.
That is my answer as to why 1MDB is facing the difficulty and challenges that we are going through today.”
Arul Kanda went on the explain that without reducing its current debt load of RM42 billion, the cost of servicing the interest on the debt amounts to RM2.4 billion per annum.
So that was what 1MDB was focusing on.
However, after obtaining the Cabinet’s approval in June 2015, and just before the exercise could be completed, the following month in July the Special Task Force confiscated 1MDB’s accounts and documents and frustrated the move to solve the company’s cash flow problems through the IPO.
Yes, 1MDB was going along fine and the IPO would have guaranteed that 1MDB would be successful but Bank Negara sabotaged that IPO and brought 1MDB to the brink of collapse.
They needed 1MDB to fail because as early as 2013 Mahathir had already decided they were going to use 1MDB as the catalyst to oust Najib. So 1MDB must fail for that to happen.
Michael Oh-Lau Chong Jin, the regional head of debt capital markets Maybank Kim Eng, and John Chong, the CEO of Maybank investment bank, were told to jam the loans so that the IPO cannot go on.
And the person who issued these instructions was a senior executive directly under Bank Negara’s Deputy Governor, Datuk Nor Shamsiah Mohd Yunus.
Basically, Bank Negara sabotaged 1MDB … Read More
Source: Malaysia Today