Why so many questions have been ask but no ANSWER???
Where is the ACCOUNTABILITY????
No to RM3b cash injection into 1MDB
By Cynthia Blemin / The Edge Financial Daily | February 24, 2015 : 9:48 AM MYT
KUALA LUMPUR: 1Malaysia Development Bhd (1MDB) should not be given any cash injection of as much as RM3 billion by the government as based on its FY14 financial accounts, the state investment company should have at least RM7 billion cash in its coffers, said an opposition lawmaker.
“I am not surprised they (1MDB) have no money, and yet they [appear on paper to] have money,” DAP National Publicity Secretary and Petaling Jaya Utara Member of Parliament Tony Pua told a news conference on 1MDB yesterday.
Based on 1MDB’s financial accounts for the year ended March 31, 2014 (FY14), Pua said on paper 1MDB should have RM3.5 billion in cash.
He pointed out that the RM3.5 billion in cash does not include the US$1.103 billion that was purportedly redeemed from its investments in Cayman Islands. Based on Pua’s calculation, once totalled up, 1MDB should have a larger sum of cash in hand of nearly RM7 billion.
“Based on these numbers they (1MDB) have [reported], they shouldn’t have any problems with their financial cash flow. However, they [seemed to have] massive cash flow problems.
“They have a lot of assets in liquid investment form which they are supposed to sell and take back the money.
“Take note that 1MDB already has some RM42 billion in loans,” Pua said, adding that 1MDB also reported to have some RM12 billion in assets, classified as level three, as stated in its FY13 financial accounts.
Pua was commenting on a report by The Edge Financial Daily yesterday that 1MDB may require a cash injection of RM3 billion from its owner, the Ministry of Finance (MoF). This is in addition to the financial assistance provided by T Ananda Krishnan to settle its RM2 billion debt to banks.
Responding to the report, 1MDB president and group executive director Arul Kanda Kandasamy said the company had on Feb 18, 2015 announced the outcome of its strategic review “in which we emphasised that 1MDB will seek refinancing from the best available sources”.
“We further stated that our 100% shareholder, the MoF will be involved, as relevant and as required, in the interests of maximising shareholder value,” Arul said in a statement yesterday.
“We will continue to issue official announcements relating to our business, the implementation of our strategic review, and our financing arrangements when appropriate and relevant to do so,” he added.
Earlier, Pua pointed out that Arul had never denied that 1MDB got the RM2 billion loan from Ananda, but had merely dismissed media reports as speculation.
Arul announced on Feb 13 that 1MDB had settled the RM2 billion owed to the consortium led by Malayan Banking Bhd ( Financial Dashboard) and RHB Bank Bhd ( Financial Dashboard), but he did not explain how 1MDB had raised the money, he said.
Pua demanded that Arul show proof of the whereabouts of a purported US$488 million profit from its joint venture (JV) with PetroSaudi International Ltd.
“Arul proudly announced that 1MDB had made US$488 million of profit from the Petrosaudi transaction but what we have at hand is at least US$1.1 billion “missing” in unknown whereabouts. The next question to ask is hence, where exactly is this US$488 million of “paper” profit Arul was talking about?” said Pua.
He was referring to Arul’s claims on Feb 21 that a JV with the Saudi Arabian company six years ago had earned it a profit of US$488 million (RM1.78 billion) in 2013.
It was also reported that 1MDB had put US$1 billion into the JV with PetroSaudi, a company with an allegedly sketchy track record, to subscribe to 40% of the latter’s new shares.
In 1MDB’s audited accounts ended March 31, 2010, the company had supposedly sold off its 40% stake in 1MDB PetroSaudi Ltd.
“They sold the shares for US$1.2 billion. Except they did not take back the money. Instead, they lent back the money to 1MDB PetroSaudi Ltd in the form of Murabaha notes or Islamic loans.
“Why would you exit a JV with a company and then turn around and loan it money?” asked Pua.
“[Also,] immediately after the signing of the agreement, 1MDB Petrosaudi repaid in full the US$700 million of advances to PetroSaudi, using the newly received funds from 1MDB,” alleged Pua.
“Even [former prime minister Tun] Dr Mahathir [Mohamad] wants to know where is the money but until today there is no proof,” said Pua, noting that 1MDB could show proof by getting a reliable bank statement to show where the money was parked, preferably in cash and not in some dubious assets.
The exposed JV and Arul now gave stronger reasons to ask if the US$1 billion investment, which was suddenly converted into a loan on the very last day in the March 2010 financial year, was in fact a cover-up of the JV scam, Pua said.
This article first appeared in The Edge Financial Daily, on February 24, 2015.
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