By now, 1MDB has supposedly “redeemed” US$2.3bn from a fund registered in the Cayman Islands.

Of this amount, the firm says US$1.2bn (60 per cent) had been “redeemed” earlier, as reflected in its 31 March 2014 accounts. On 13 January 2015, 1MDB announced it had “redeemed” the remaining US$1.1bn. It also reportedly received US$267m in dividends.

When the Edge (19 January 2015) asked 1MDB if the “redeemed” funds would be brought back to Malaysia, this was the answer:

This will depend on what use the funds are ultimately put towards. At present, we are evaluating a number of potential uses for these funds and once a final decision has been made, that will determine whether the funds are brought back to Malaysia or used abroad, for capital expenditure on our international projects, for instance.

When asked if the funds would be used to settled the RM2bn debt to Malaysian banks, 1MDB replied:

1MDB intends to use, over time and as appropriate, the funds redeemed for a variety of corporate purposes including but not limited to capital expenditure and development projects, as well as working capital and the settlement of various financial commitments. In particular, 1MDB intends to direct some of these funds towards development work at Tun Razak Exchange…

The Edge then asked if the “settlement of various financial commitments” included the RM2bn owed to Maybank, RHB, etc.
1MDB responded:

I am afraid we cannot comment on any specifics at this stage, beyond what has already been outlined in our earlier response.

This sounds a lot like what Bank Negara governor Zeti Akhtar Abdul Aziz’s response when asked about 1MDB’s huge debt:

We will never comment on an individual entity, but we have arrangements to deal with it so that no individual entity will have a systemic implication on the overall financial system of our economy.

No comment from anyone, apparently.

READ MORE:  CRCC and the Penang tunnel-highways deal

So where is that “redeemed” US$2.3bn (RM7bn) now?

Meanwhile, 1MDB is reportedly seeking yet another loan repayment extension (the third time). Apparently, 1MDB is still in discussions with Ananda Krishnan, from whom it had bought power assets, for which 1MDB was believed/reported to have overpaid.

Seeking a third extension? Now, this strikes me as a firm facing serious cash flow/liquidity problems, don’t you think?

So why can’t 1MDB use the money “redeemed” from the Cayman Islands fund to repay Maybank and its four other lenders?

Something doesn’t compute here.

Please help to support this blog if you can.

Read the commenting guidlelines for this blog.

33 COMMENTS

  1. The Public Accounts Committee (PAC) wants the Auditor General’s Department to immediately carry out an audit of the government-owned 1MDB’s deals before it calls up the company.

    PAC chairman Datuk Nur Jazlan Mohamed said the immediate audit should be of the source of the RM2 billion used to settle 1MDB’s loans with local banks, the RM3 billion injection of government funds into the debt-laden company, its dealings with PetroSaudi International (PSI), and whether the money parked in Cayman Islands has been brought back.

  2. Can Najib or Arul please explain why 1MDB moved US$1 billion of public funds into a shady venture with PetroSaudi International, despite its sketchy track record, as revealed by Sarawak Report?

  3. Kadir Jasin listed 9 questions for Arul Kanda to answer, so that the public is convinced that 1MDB was not in dire straits:

    1. Why did 1MDB buy end-of-life IPPs from TYL, Genting and Ananda’s Tanjong Energy?

    2. Has the company applied and received the extension for the concession period of the power plants and negotiated new power purchase agreements with Tenaga Nasional Berhad?

    3. Who are the Malaysian and international subscribers of its US$6.5 billion (RM23.41 billion) global sukuk?

    4. Apart from power plants, the TRX (Tun Razak Exchange), the redevelopment of the Sungai Besi air force base and land in Penang, what are other 1MDB assets?

    5. Is it true that 1MDB paid as much as 95% above the market price for its Penang land and that part of the land is occupied by squatters?

    6. Is it true that 1MDB also invested in a mining concession in Mongolia?

    7. Why the necessity for 1MDB to do a land-lease development for TRX with an Australian company when all the three major property developments mentioned by Arul in a Malay Mail interview – KLCC, KL Sentral and Mid Valley – were developed by locals?

    8. Until a month ago Arul was a banker. Is it a norm for a state-owned strategic investment company to be so highly geared as 1MDB?

    9. Would Arul, as a banker, fund such a highly geared company?

  4. In a press conference covering issues surrounding 1MDB, Dzulkefly Ahmad the Executive Director of PAS Research Centre requested that the Public Accounts Committee (PAC) call in 1MDB.

  5. The Umno Proxy War is hotting up as Najib is using his mass media and his team of cybertroopers to refute allegations of his detractors from the Daim/mMahathir camp.

  6. According to Kadir Jasin, 1MDB could become a source of systemic risk if it fails to repay its RM5.5 billion debt by June, triggering economic instability in the country as 1MDB’s outstanding loans were now at 4% of GDP and noted that the firm had already extended its loan repayments twice.

  7. Arul

    Your distraction strategy as Alleged by herman?
    U hv been silent on the redemption proceeds
    Why borrow from ananda if imdb has the funds to settle maybank and rhb?

    Anil

    Will there be a repeat of time engineering listing to save renong? Pension funds and epf will be roped in s major cornerstone investors for the listing of energy assets of imdb?

  8. Arul

    Your distraction strategy as Alleged by herman?
    U hv been silent on the redemption proceeds
    Why borrow from ananda if imdb has the funds to settle maybank and rhb?

    Anil

    Will there be a repeat of time engineering listing to save renong? Pension funds and epf will be roped in s major cornerstone investors for the listing of energy assets of imdb?

    • Yes we have to watch carefully who the institutional investors are at 1MDB’s power assetd listing.

  9. The Edge has been publishing issues surrounding 1MDB.
    Now its boss Tong has been harassed with accusation by Umno cybertroopers (otherwise why it could make the front page headline on Utusan today?) that he manipulate Ringgit causing huge depreciation, in order to silence The Edge?

    http://www.malaysiakini.com/news/288031

    • Umno’s Ismail Sabri in his Wag-the-Ngeh stunt is another tactic to divert attention from 1MDB woes towards OldTown halal status?

      Malays should be thankful to the employment at OldTown.

      Ismail Sabri please tell malays why KFC meal is getting expensive?

      • Ismail Sabri as Agriculture Minister should check the price of chickens so that the prices of KFC is kept in check. He should ensure that prices of Kangkung remain low for affordable Menu Rakyat 1Malaysia. He should ask NFC to rear more lembu to supply more milk to keep the price low. He should help the farmers in Cameron Highlands affected by recent flood so that the supply of vegetables are not restricted casing price hike.

        If only Ismail Sabri could perform his duty as paid in his Agro/Agriculture portfolio, and not wasting time posting FB messages that incite hatred with racist connotations.

      • As usual MCA could do nothing when Najib defended Ismail Sabri.
        Ismail Sabri is set to be the next Vice President in Umno, as he has successfully employed the usual Chinese bashing tactics by the predecessors of such position.

    • The Edge Media Group owner Datuk Tong Kooi Ong has served a notice to businessman Jho Low Taek Jho demanding that he stop “fabricating malicious lies” about him and the news publications under his control.

    • 1MDB saga is now entering Jho Low vs ‘The Edge’ Tong bout.
      They are fighting it out for their respective ‘sponsors’?

  10. This quote from a Malaysian Kini reader says it best (about weakening of RM):

    Anonymous_1408265047: The whole world of forex trading does on a seven day, twenty -four hour basis, what Tong has been accused of. This is what forex trading is all about. I do not think it is possible to say Tong is guilty of what is a perfectly legal and normal daily occurrence.

    One wonders about the mental capacity of some people and when one hears that a minister is involved in this denigration of a person for what is a perfectly normal daily occurrence. It beggars belief that the minister could have the job he has.

    What on earth do people think forex trading is? Changing money for people going on holidays?

  11. Certain Umno ministers are telling the kampung folks (most urban folks would not be fooled) that falling Ringgit is due to the sabotage by certain individuals from non-mainstream media out to hurt the country? Recyling old script that blaming George Soros for the 1997 financial woes? Another attempt to cover up the problems faced by 1MDB?

  12. Ananars

    Good for u for being rich
    Must learn from u how to invest
    Remember to put all your wealth in imdb when it get listed
    U be richer manifold
    I m sure u are also a cornerstone investor for felda listing
    Sure u made a killing then

  13. The Economist noted two recent developments that are adding to Najib’s problems, in addition to ongoing criticism by former PM Dr Mahathir and the drop in world oil prices:
    1) The debt-ridden investment fund 1MDB, of which Najib is chairman of the advisory board,
    2) The Federal Court verdict and death sentence for two former security officials in the murder of Mongolian woman Altantuya Shaaribuu.

    Knives out – Misfortunes surround Malaysia’s prime minister
    http://www.economist.com/news/asia/21641304-misfortunes-surround-malaysias-prime-minister-knives-out

    So the misfortune of 1MDB could prove to be (politically) fatal to Najib?

  14. Is 1MDB facing cash-flow problems as it has to borrow from Ananda Krishnan to pay off its RM2 billion debts to Maybank and RHB?

    Ananars care to explain?

    • Aiyoh yoh GK Ong, I have said so many times it an investment and it has been reported in the media. In case you forgot, show you this article. The Borneo Post Jan 16 09:37am KUALA LUMPUR: Malaysia’s second-richest man, Tan Sri Ananda Krishnan, is in talks with state firm 1MDB to become a cornerstone investor in a long-delayed, US$3 billion listing of its power assets, two people familiar with the matter said on Thursday. I invest because 1MDB has potential. Don`t you understand. Sure you don`t understand because you people cannot see the potential which is why you people are not rich like me. Please don`t listen to the cock and bull story of those DAP goon

  15. Under the current exchange rules exporters must remit back the collections within 180 days and any exceptions must be approved by the central bank
    For the size of the external borrowings by imdb group central bank aproval must be obtained
    Should the central bank then not insist imdb remit back the funds following the sale of assets whihv in this instance alledgely via redemptions?

  16. Wonder if the money is still there?
    If its there why not used part of it to fully settle the consortium of bankers and move on with the listing exercise?

    Anil

    There is another 4billion raised locally by once a subsidiary of imdb and funds purportedly used to buy mongolian mines. The subsidiary has since been “transferred” out. Where has the money gone?

    Engaging a suave banker aint gonna convlnced me on health of imdb. Not when he is not forthright with answers to simple questions. Show me the money arul!

  17. No one is asking the valuation of the power assets in negotiation with Ananda. PIH was acquired at RM8.5b but now the valuation is less than half if Ananda gets majority for RM2b. NO ONE sees the problem here losing as much as RM5B by 1MDB?

  18. In this day and age of electronic fund transfers, is it not very easy
    to move money from one location to another?

    Can cynically and easily move the money back to satisfy critics and then move it out again, right?

    GK Ong and Mr Roger Woo on to something ?

  19. If the money has been brought back to Malaysia, why is 1MDB not paying its debts to the lenders and asked for extension instead? Something is wrong somewhere. Where is the money in Caymans? Maybe it does not exist anymore.

    • Or are they hoping for a bailout? There are already too many precedents of bailouts by the government (read: taxpayers) of failed business initiatives that are connected to the government. Why ‘waste’ the ‘redeemed’ fund for repayment of debts when it is almost a foregone conclusion that the onus would ultimately be transferred to the government (read again: taxpayers). After all, this brainchild of the current PM cannot been seen to fail especially in view of the heavy criticism from Dr.M and his ilk.

  20. MIC has shown UMNO how to be transparent via its open commotion wrestlemania style. 1MDB exposure to be expedited by Mahathir camp?

    • I think former Umno leaders would not dare to challenge 1MDB beyond simple little instigation on cyberspace, or else hell will break loose when their past ‘misdeeds’ in Perwaja, Bank Rakyat, PKFZ etc could be dug up again for all to see.

  21. 1MDB gives complicated answers to simple questions.

    It is highly likely that the money is parked in Cayman Island and could not be redeemed for certain reasons.

    (Can) Bank Negara … be trusted as well in this matter(?)

    • Bank Negara’s Zeti hands are ‘tied” not to disclose too much just like Paul Low’s on corruption matter ???
      Latest news Ananda Krisnan to “finance” RM2 billion loan with janji-janji Yang akan ditepati nanti (power plants) ????

LEAVE A REPLY

Please enter your comment!
Please enter your name here