Governance

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That was a reader’s comment left on the website of the Wall Street Journal. The Swiss were renown for their banking secrecy, but even they couldn’t keep mum over this.

The sum suspected to have been misappropriated amounts to around US$4bn; its intended purpose is the subject of further investigations. So far it has been ascertained that a small portion of the money was transferred to accounts held in Switzerland by various former Malaysian public officials and both former and current public officials from the United Arabic Emirates.

So thanks to the Switzerland attorney general’s office, we now know there is a ‘black hole’ out there amounting to US$4bn (RM17bn), involving several firms that have links to 1MDB.

In my piece, The black hole of 1MDB, I noted that 1MDB stood to make at least RM12bn in property revaluation gains. This would come in handy for 1MDB to fill up its own black hole by paying off its debts, (incurred on what?) and papering over its losses.

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A bombshell, if ever there was one.

Read the full statement from the Swiss attorney general’s office here. The actual headline of the Swiss statement starts with “1MDB case”.

The criminal investigation conducted by the Office of the Attorney General of Switzerland (OAG) has revealed serious indications that funds have been misappropriated from Malaysian state companies. The monies believed to have been misappropriated would have been earmarked for investment in economic and social development projects in Malaysia. So far four cases involving allegations of criminal conduct and covering the period from 2009 to 2013 have come to light in this connection (relating to Petrosaudi, SRC, Genting/Tanjong and ADMIC), each involving a systematic course of action carried out by means of complex financial structures.

The sum suspected to have been misappropriated amounts to around US$4bn; its intended purpose is the subject of further investigations. So far it has been ascertained that a small portion of the money was transferred to accounts held in Switzerland by various former Malaysian public officials and both former and current public officials from the United Arabic Emirates. To date, however, the Malaysian companies concerned have made no comment on the losses they are believed to have incurred.

The Wall Street Journal quotes the Swiss attorney general:

“We are very concerned,” Swiss Attorney General Michael Lauber told The Wall Street Journal on Friday. “We have found evidence of suspicious money transfers linked to 1MDB going through Swiss financial institutions, and we believe that it is very important that it is shared with the Malaysian authorities.”

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The RM2.6bn donor must step out and official confirm if such a donation was made and how much was returned. The prime minister should then account for the difference.

This is in the light of the widespread scepticism that greeted the attorney general’s statement. Here’s an excerpt from a Dow Jones Business news report on the Nasdaq website:

A Saudi government official, while declining to comment specifically on the prosecutor’s statement, said the Saudi ministries of foreign affairs and finance had no information about such a gift and that a royal donation to the personal bank account of a foreign leader would be unprecedented. Representatives of the royal family couldn’t be reached for comment.

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1MDB should have been rolling in the black with some RM12bn in land revaluation gains; instead it finds itself pouring money into a black hole of borrowings incurred to finance goodness-knows-what.

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Najib and Arul Kanda have more serious explaining to do:

They should respond to this WSJ shocker: Malaysia’s 1MDB sent US$850m to entity set up to appear owned by Abu Dhabi wealth fund

A 1MDB unit transferred at least $850 million via three transactions last year to a British Virgin Islands-registered company with a name that made it look like it was controlled by IPIC, according to wire transfer documents viewed by the Journal and two people familiar with the matter.

The 1MDB fund sent the money to “Aabar Investments PJS Ltd.” which closely resembles the name of IPIC’s wholly owned subsidiary Aabar Investments PJS, the wire documents show….

Officials at IPIC say neither they nor any subsidiary received this money, the Journal reported.

Earlier:

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A man places a portrait of the late Anthony Kevin Morais, the deputy public prosecutor who was murdered last month, during a mass funeral at Church of Divine Mercy in Shah Alam on 3 October 2015. Photograph: The Malaysian Insider/Najjua Zulkefli

I originally put this on my blog on 8 October. I’m putting it up again, given the widespread interest that his murder continues to generate and the developments since. Kevin paid the ultimate price for his convictions, but I firmly believe his death won’t have been in vain.

This is something I wrote for the Herald to mark the funeral of Kevin Morais on 3 October.

This weekend, we pause to reflect on the funeral of deputy public prosecutor Anthony Kevin Morais, who was abducted and then believed to have been cruelly slain.