Why did 1MDB delay RM6.1bn loan repayment when it has billions parked overseas?

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Something strange is happening at 1MDB that has left many analysts stumped.

1MDB has managed to secure a six-month extension on a loan repayment of RM6.1bn that had fallen due. That was the second time it had sought an extension.

But why does it need to delay loan repayments when it supposedly has RM18bn parked overseas with an obscure Hong Kong asset management firm, Bridge Partners. And Cayman Islands?

Earlier there was talk in the business press that 1MDB had overpaid by RM2bn in acquiring assets from Tanjung and Genting for RM10bn.*

Then there was talk that it has incurred hefty fees and charges for bond sales via Goldman Sachs.*

It was also said to have bought land in Penang for RM1.38bn – double the value of the land in 2012.*

And then there was the delay in publishing it accounts and the change in auditors.*

At 31 March 2013, 1MDB was saddled with loans amounting to a staggering RM36bn.

Really, a thorough examination and audit is required into the opaque operations of 1MDB. In particular, we need to verify the amount that 1MDB supposedly has parked overseas to satisfy ourselves that it really exists.

* – See Edge report.

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frankie
Stylo Logan

Anil and readers please continue to highlight the malpractices of 1MDB.

Don Anamalai

Tun Mahathir has noted in his latest blog entry that 1MDB had spent billions of ringgit buying power plants from Genting and Ananda Krishnan and had paid above market prices for them. He also lamented that 1MDB is heavily indebted. It has debt of around RM38 billion after just five years in operation as the country’s sovereign wealth fund.

He also noted that a large part of the money raised from the issue of debt paper by 1MDB has been sent to the Cayman Islands, a move which many has questioned.

http://www.themalaysianinsider.com/malaysia/article/dr-m-raises-questions-about-1mdb

Don Anamalai
Gary

Good article indeed!

OWC

The sovereign rating of 1MDB is a risk as the $14 billion investment fund is not even generating enough cash from operations to cover interest costs!!! Fitch Ratings has cut the outlook on Malaysia’s A- rating to negative from stable last July.

http://in.reuters.com/article/2014/06/01/malaysia-1mdb-idINL3N0OD0Z720140601

Quramie

Felda is said to be a major shareholder in Cadbury Malaysia.
http://www.mazidulakmal.com/2014/05/felda-antara-pemegang-saham-terbesar.html

(Is that why) Jakim is not cancelling its halal certificate despite protest from malay NGOs because of the tainted chocolate incident(?)

Stylo Logan

I prefer imported chocolate for better taste. Local halal ones are too sweet and lack the true chocolate elements, with or without porcine DNA.

henson

1MDB in 2013 got Psy to perform in Penang ?

1MDB in 2014 gets who to perform FOC ?

hishamh

looes74, I share these concerns…and others. 1MDB looks like an accident waiting to happen. A few things Anil has left out: 1. What are 1MDB’s overall investment mandate and strategies? Even insiders don’t appear to be sure. Without the discipline of a properly defined investment goal, there’s the risk of taking too much, well…risk. All the other GLICs have a definite role to play, which seems to be missing from 1MDB. 2. Note that 1MDB has managed to be profitable, but only by revaluing the land it owns. That’s not sustainable – where’s the cash flow? 3. What’s the demarcation… Read more »

looes74

Let see what hisham the LSE economist going to say about this

OWC

Scary just to imagine how our nation’s wealth is strangely managed in this way.