1MDB tries to explain ‘missing’ RM27bn – but few will be convinced

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What 1MDB claimed back then.

This infographic was prepared by 1MDB. The column on the left totalling RM14.1bn is basically culled from Mahathir’s tabulation of what he felt 1MDB had spent.

Mahathir had said that 1MDB could only account for RM14bn of its RM42bn debt. He asked what happened to the other RM27-28bn.

Basically, 1MDB is trying to explain the “missing” RM27bn. According to 1MDB, it is made up of:

RM6.0bn – “Inherited debt” (What the heck is this? Weren’t the power plants profitable in the first place? So why should there be “inherited debt”? If these plants are not profitable, why did 1MDB acquire them? Did it overpay for the power plants as various quarters have maintained?)

RM6.1bn – “Investment cost: Brazen Sky” (This is managed by Bridge Partners of Hong Kong. How much of this is recoverable? This must be the Cayman Islands “money”, some of it supposedly parked in Singapore and now infamously known as “units”.)

RM5.1bn – “Investment cost: GIL Funds” (This is supposedly part of the US$3 (RM10bn) that 1MDB raised for the Bandar Tun Razak project. How much of this is recoverable?)

RM4.2bn – “Investment cost: Aabar Investments” (This is supposedly for a security deposit in return for a guarantee on a 1MDB bond issue to raise US$3.5bn (RM11.5bn). But how much of this will 1MDB get back?)

RM4.5bn – “Cost of finance and working capital” (Why so expensive? 1MDB has to reportedly pay RM1.6bn per year to service its borrowings. Can we have the breakdown between ‘commission’, etc and the regular interest? Specifically, how much ‘commission’, etc was paid for the funds procured via Goldman Sachs?)

RM1.8bn – Others (including forex loss RM0.9bn and cash RM0.9bn)
__________

RM27.7bn

__________

Of course, this doesn’t explain why 1MDB was said to have overpaid in acquiring the power plants, which were nearing the end of their concession periods.

Neither does the table above explain why the government sold land at ridiculously low prices to 1MDB. (Mahathir estimates that the government lost RM25bn due to these low prices – which would mean 1MDB stands to reap the same amount in revaluation surpluses at the government’s expense.)

Forensic auditors are going to have ‘fun’ if they are allowed to pore over 1MDB’s books and documents and verify all these “investments” in order to establish how much they are really worth.

Just make sure there are no shredders around.

The larger question is, why did we need 1MDB in the first place? Why couldn’t Khazanah have handled the land deals? Why couldn’t Tenaga have decided whether it needed to acquire those power plants.

1MDB is not a sovereign wealth fund as it was borrowing money at stiff rates to invest in questionable assets and even “units”.

In effect, the 1MDB set-up allowed a tiny group of powerful and well-connected individuals to make huge ‘brazen’ investments and other large payments with hardly any checks and balances, parliamentary oversight or thorough audit by the Auditor General.

The land it acquired at outrageously low prices from the governent allowed 1MDB to show rosier financial results due to revaluation surpluses. This enabled it to mask its poor returns, alleged overpayments for power assets and high financing costs – for a while.

But then, the large net cash outflow finally caught up with 1MDB and the game was up. The party was over.

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gk ong

“Malaysians do not want Najib to play the role of ace magician by just winding up and dissolving the 1MDB so as to claim that 1MDB controversy is no more as it has ceased to exist, but to be responsible for all 1MDB and 1MDB-related issues and scandals, including those passed off to other entities should there be a winding-up and dissolution of 1MDB,” Warning from Lim Kit Siang today.

Elias MJ

I have just been recommended to this blog.
Not bad.
Hope to see more update on the 1MDB issue that is killing our economy.
Too much lies from Najib that need to be exposed!

Abb

Anil

I disagree with u on this
No doubt audit sampling is norm
But in this instance when the auditors signed off the accounts imdb was already insolvent
And need cash fast to meet financial obligations
For the shouting by the sycophants of najib, just to adopt yang definition by the way, did husni not confirm
that funds were indeed paid to goodstar ltd
Who is behind goodstar? Truth be known

Helmi

1MDB has debts totalling 42 billion Ringgit.
If you had 42 billion Ringgit you can spend 1 million Ringgit a day, every day for 115 years!

If one took 42 billion Ringgit and divided it among all Malaysians, how much would each Malaysian get?

Yang

No wonder opposition do not know how to count.
With 42 billions ringgit @ 4% interest per year, you could spend 4,602,739.73 everyday for all eternity instead of just 1 million per day for 115 years.

siaboay kid

IGP sees DrM as someone who can disturb harmony ?

jericho

According to The Edge, the reasons why 1MDB is in financial distress are: i) It overpaid for the power assets by RM3.29 billion which is the amount treated as goodwill by its auditors a year after purchase ii) It overpaid by around RM500 million for the Penang land going by past transactions before its purchase in May, 2013 iii) It overpaid Goldman Sachs in fees for the three US dollar bond issues totalling US$6.5 billion, and it overpaid the interest rate for the bonds and other loans resulting in RM4.5 billion in financing cost or 10% of its debts iv)… Read more »

Yang

Think out of the box, don`t keep using the edge. The edge owner is a former crony of the defacto whose bank later has to be merged. Heres` another twist and turn or ignorant question from Pua Husni drilled over inflated 1MDB land values The question hence is how did the valuations of these pieces of properties leap by 157 percent in just one year?” asked DAP parliamentarian Tony Pua in a statement. Pua must be an ignorant spin doctor out to create deception. From 2013 onwards until 2014, property prices have gone up 100 – 200% and even more… Read more »

Derrick

Stop your BN rubbish!

fauziah

PM tipu rakyat!

Stylo Logan

Are you that little girl singing the ABCD GST song on YouTube?

siaboay kid

Nothing to hide yet … IGP … postpone this morning event upon seeing M shadow.

Phua Kai Lit

The FLOM should have been sent out to debate Dr M 🙂

Yang

Before we even think of mahathir as god sent especially on 1MDB, think hard. Are Malaysians a Forgetful Bunch? Tun Dr. Mahathir Mohamad is directing tirades of attack towards Datuk Seri Najib Tun Razak. While Mahathir cites concern over the welfare of the nation and UMNO as his reason, deep down our guts, we all know how big a lie that is. At one end Mahathir is afraid of going behind bars if the Pakatan coalition comes into power. On the other end of the spectrum he is afraid if Najib remains and holds the government following next general election,… Read more »

Yennie

“Nothing2hide” at today’s event has been cancelled !?
It has been changed to “hide and seek – catch me if you can !”??.
What a Joke !

Yang

Yennie
The PM wanted to go and explain but the opposition turn it into a fracas
The stage is not meant for the m kutty but he want to upstage it

At 10.20 am, organisers, SukaGuam, announced that the event had to be postponed indefinitely after a commotion outside Dewan Tun Hussein Hall here.
http://www.malaysia-today.net/as-najib-makes-a-no-show-police-stop-dr-m-from-speaking-at-forum/

Its you that is talking nonsense without knowing the actual situation. Next time if you know next to nothing, don`t simply open your mouth.

Yennie

You are really a confused fella instead ! The so-called cancellation was announced by the IGP at 8.50am on his tweeter long before the scehdule time of 10.00am. That is obviously, deliberated !

Yang

Yennie ; Ya so you know the forum was cancelled so why do you make an accusation. Deliberated or not, you should know there is a commotion so the IGP was right in cancelling it. Anyway the forum was cancelled by the organizer moment later so the M kutty has no right trying to upstage. Look like he still want to be the PM again. So who is the confused one !!!

bigjoe99

Its actually besides the point whether they misuse the money, lost the money, or someone benefitted from the money.. Do people believe ANY TOP LEADER OF UMNO/BN IS NOT ALREADY GUILTY OF THESE THINGS ALREADY. They lost a lot of money – it got bailed out by cheap real estate tbat should have been better use. BUT the big picture really is the most confirmed proof that NAJIB HAS VERY BAD IDEAS HE IS RECKLESS WITH..HE IS AN IDIOT..Think of some many other things from Pembinaan PFI, SRC International, BR1M and MRT and HSR – these will cost tens of… Read more »

Ong Eu Soon

To maintain a current ratio of 2 you need a total of $41b in working capital. Your actual working capital is $1b with a current ratio of 1.02. If you grow 10% per year in 12 months you will need $45.1b of working capital. This will keep your current ratio at 2. This assumes that both your current liabilities and current assets increase at an annual rate of 10%. Where to find the other $40b to keep the business floating? In order to find the necessary working capital, the only way out is to sell Brazen Sky and withdraw the… Read more »

jericho

Go ahead to pose your assessment to Najib tomorrow at ‘Nothing to hide’ forum at PWTC tomorrow to test if it could deliver the TKO punch to Najib, the self proclaimed Bugis Warrior.

gerak khas

Twitter IGP wanted the event canceled upon learning the arrival of Mahathir to face Najib for ultimate showdown. Is this the escape plan as planned by Najib?

owc

Is the RM11.2 billion in Brazen Sky and GIL Funds in the form of cash, units or widgets? If the RM11.2 billion is cash, where is the money? Which bank and which country is the money parked in and why? Is the money in Malaysia? And if it’s not, why? If the RM11.2 billion is in the form of “units”, are they still worth RM11.2 billion today? This is important because it was only recently known that the US$1.103 billion (RM4.059 billion) 1MDB redeemed from Brazen Sky’s fund in Cayman Islands is “not kept in US dollars, but as units”… Read more »

siaboay kid

The cabinet ministers are now not in atm with Man in on 1MDB mess fearing to be prosecuted later on? Truly nothing to hide?

iSupercally

The Air Itam land brought for 1.1 billions should now be worth at least 5 billions or more while the TRX and Bandar Malaysia land should be worth at least 3 – 5 times more as land prices has appreciated more than 300-1000% depending on location. Why did not the opposition comment on this. The price of the power plant Powertek and Kuala Langat Power plant brought for 8.5 billions and 2.3 billions in RM respectively has been clearly stated. If jokers like Rafizi and Pua think the price brought is too high, don`t specualte and give evidence on why… Read more »

Ong Eu Soon

Joke of the century investment of $42 billion without sufficient working capital. Who is the genius?

Yang

If 42 billions is a joke you are wrong. It is not and so neither is there fraud or misappropariation as alleged. Has 1MDB lost billions or being siphon off as alleged. NO. Its just that 1MDB has over invested without realizing about the cash flow problem. After all there is land properties worth billions that will continue to appreciate. The power plants and investment may bring in profit and appreciate in the long run. So why should Najib resign. Let him restructure and put the cash flow back in order since there is no inapproprities. For your info, Singapore… Read more »

Amutu Nwakaeme

Ah Soon
Genius I dont know.
The fools I know are the majority of Rakyat malaysia yang setia to the Cheats !

iSupercally

Almost every one is setia to the cheat this side.or that side. What do you or we care as long as it benefit us. Don’t be naive and think they are the angels. There is none only ourselves.

LGE tak boleh

If not for the land revaluation gains, the financial position of 1MDB would have been much worse off. Even an average joe can make astronomical profit if the lands are sold to him at such a bargain price. And yet 1mdb is struggling financially? I am baffled that you still don’t see any problems in 1mdb? What’s wrong with you actually, isupercally?

Yang

Isupercally is right. We do not want unsubstantiated allegation. The auditor has investigated and found there is no wrong doing. PM has given the go ahead for PAC, Bank Negara and other relevant agencies to investigate. Before we come to a conclusion, let them finish their job and not be deviated from the DAP leaders and their sycophants spinning. This should be the right thing to do instead of going through with your head winding from the spinning of Sarawak Report which were later used by Pua and Rafizi to spin your head which in turn spin the M kutty… Read more »

Phua Kai Lit

The shrillness of the defenders of 1MDB (fiasco/financial megascandal) is directly
proportional to the seriousness of the situation and the rapidly deteriorating credibility of the
Finance Minister 🙂

gk ong

RM18 billion on IPPs?
Why the BN government via 1MDB is in this business after all the privatisation?
Using rakyat money for such venture while continue to increase electricity tariff?
Rakyat didahulukan or rakyat tanggung hutang?

Abb

Great thing husni confirmed payments made to goodstar
Well his only defence is to ask others to proof goodstar is controlled by fei low
Haha he .is deadmeat so to speak
Thats all we need to hear from spokesman of imdb

Yang

What the heck convince or not. Only lackeys and sycophants will feel that way. Everything is crystal clear. The auditors` Deloitte report is crystal clear. No doubt about that. They cannot put every minute details in it. It would fill a room. Anil is a chartered accountant. He should know about this.

LGE tak boleh

If there is nothing fishy, then why took super long to release the previous audited account?

tunglang

Anil, not all auditors are supposed angels sent from heaven.
Some I heard (heresay) can do wonders turning bleeding red accounts to black indian ink.
The Gods are watching.

tunglang

Anil, Cheers Kopi-O kau kau.