Courageous Heart: BERSIH 4

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Friday, May 27, 2016

#1MDB: Investigations Undermined In Malaysia

Swiss body confiscates RM400m in illegal profits from BSI Bank

Published by Malaysiakini on 25 May 2016.

Swiss Financial Market Supervisory Authority (Finma), which identified serious lapses by BSI Bank in its dealing with accounts linked to 1MDB, announced the confiscation of almost RM400 million in profits generated by the bank. "The serious breaches of supervisory law linked to the client relationships the bank maintained over the period under investigation enabled it to charge high fees."

As part of the Swiss investigation into 1MDB, it found funds being transferred across a client group which controlled over 100 accounts at BSI Bank. The transfer was facilitated by BSI Bank without proper due diligence even in instances where there were clear indications of money laundering.

Read more here: https://www.malaysiakini.com/news/342869

Malaysia’s Probe Into 1MDB Fund Was Flawed

By Tom Wright & Bradley Hope. Published by Wall Street Journal on 26 May 2016.

Investigations ordered by Malaysia’s leader into graft allegations at a state-development fund have been undermined by political pressure and a lack of transparency, according to documents and interviews with people involved.

Speaker rejects motion to make A-G report on 1MDB public

By Ram Anand. Published by Yahoo! News on 26 May 2016.

Dewan Rakyat Speaker Tan Sri Pandikar Amin Mulia today rejected a motion by Opposition Leader Datuk Seri Dr Wan Azizah Wan Ismail to publicly reveal the Auditor-General’s (A-G) report on 1Malaysia Development Berhad (1MDB).

Pandikar said Dr Wan Azizah’s motion cannot be decided in the second parliamentary chamber pursuant to Standing Order 18(1), but instead needs a decision from the House.

The second chamber, which was set up recently to debate and discuss emergency motions, was part of the string of reforms to the Parliament institution.

"I regret the rejection of my motion as it involves public interest," Dr Wan Azizah said in response to the decision during a press conference at the Parliament lobby.

"Until today, the 1MDB scandal has not been answered properly either through PAC, or official government answers," she added.

Malaysia’s central bank closes its investigation after 1MDB pays fine

Published by Today Online on 26 May 2016.

Malaysia’s central bank, Bank Negara Malaysia (BNM), announced on Thursday (May 26) that it has closed its investigations into the troubled 1Malaysia Development Berhad (1MDB) after the state investment firm paid a fine imposed by BNM for non-compliance with local financial regulations.

“As far as we are concerned, 1MDB has paid their compound and with that, that is the conclusion of our investigation within Bank Negara Malaysia’s rules and regulations and the law that we administer,” newly-appointed BNM governor Muhammad Ibrahim told the Malaysian media on the sidelines of the 20th Malaysian Banking Summit.

CIMB Clears Chairman of Wrongdoing Over Malaysia Political Funds

By Shamim Adam. Published by Bloomberg on 18 May 2016.

CIMB Group Holdings Bhd. cleared Chairman Nazir Razak of misusing his position or the bank’s resources when he helped his brother -- Malaysia’s prime minister -- distribute funds to politicians before elections three years ago.

Nazir will resume his post at CIMB Group and as a director of CIMB Bank from Thursday after taking a monthlong leave of absence, according to a stock exchange filing. The boards of the two companies appointed Ernst & Young to conduct an audit into Nazir’s activities and sought independent legal advice, they said.

The Wall Street Journal reported in March that Nazir received about $7 million from his brother Najib Razak’s accounts ahead of elections in 2013, and passed the money to politicians in the ruling party. Nazir told the paper the money that entered his account was distributed in accordance with instructions from party leaders, and he believed it came from donations he helped solicit from Malaysian companies and individuals.

The audit found Nazir "did not misuse his position as the Group Chief Executive at that time nor was there any inappropriate use of the bank’s resources," CIMB said in the statement.

PAS rep files motion against PAC chief over 1MDB report edits

By Kamles Kumar. Published by Malay Mail Online on 26 May 2016.

PAS MP Datuk Mahfuz Omar has submitted a motion to refer Public Accounts Committee (PAC) chairman Datuk Hasan Arifin to the Rights and Privileges Committee over his removal of two paragraphs from the panel’s 1Malaysia Development Berhad (1MDB) report.

The Pokok Sena MP alleged that Hasan had edited the PAC report without the knowledge of the panel’s members. "I have put in a motion about Hasan because he edited the PAC report on April 7 without the knowledge of other PAC members... This is very unbecoming of a member of Parliament and action should be taken against him," he told reporters outside the Dewan Rakyat today.

Tuesday, November 24, 2015

1MDB: scandal-hit Malaysia fund seals China deal for power assets

By Michael Peel in Bangkok. Published by Financial Times on 24 November 2015.

Malaysia’s scandal-hit 1MDB state investment fund has clinched a deal to sell power assets to one of China’s fast-expanding state nuclear companies for $2.3bn. The agreement with China General Nuclear Power Group helps cut the Malaysian fund’s big debt pile but hands over a keystone of sovereign-backed 1MDB’s activities to a Chinese state buyer.

It is the latest twist for the state investment fund, where the fate of billions of dollars borrowed as it ran up more than $11bn of debts from contentious deal making has sent ripples reverberating from Malaysia to the Middle East to the Cayman Islands.

The higher than expected price also raises the question of whether the deal is in part a reminder by Beijing of its influence in Malaysia, after President Barack Obama’s efforts last week to woo Najib Razak, the country’s premier, as an ally on US-China maritime disputes.

While beating expectations, the 9.83bn ringgit pricetag represents a steep discount on the roughly 12bn ringgit that 1MDB has said it paid for the assets over the past few years, although attached power purchase agreements, are closer to expiry and so less valuable. Foreign buyers also benefit from the steep fall in the value of the currency, which has tumbled by about a fifth in the past year against the dollar.

CGN’s main local rival bidder was Tenaga Nasional, the state-owned electricity company, and the auction process attracted companies from Saudi Arabia and Qatar. Shares in Tenaga rose 5 per cent early on Tuesday, apparently in relief that the company would not be used by the government to bail out 1MDB.

But the sale to CGN creates complications of its own, given how factions of the ruling United Malays National Organisation have stoked hostility towards the country’s Chinese Malaysian business elite. The deal also appears to over-ride rules that limit foreign investors to minority stakes in the Malaysian power production industry without a special waiver.

James Chin, director of the Asia Institute at Australia’s Tasmania university, said there could yet be a backlash against CGN if electricity users ended up paying more. “It will become a racial issue if there is a power [price] hike to benefit the new operators,” Mr Chin said.

Arul Kanda, the former Abu Dhabi-based banker brought in earlier this year to restructure 1MDB, said CGN was the “clear winner” of an auction he hailed as a “vote of confidence in the Malaysian economy”.

Malaysia has been under growing economic pressure because of a mix of international energy price falls, high consumer debt levels and concerns about the fallout from 1MDB’s troubles.

Both the price and the politics of the CGN deal are now likely to come under greater scrutiny, at a time when the Najib government is under severe pressure over its stewardship of 1MDB. The premier has for months been fighting off a campaign to oust him over mysterious payments of almost $700m to his personal bank account. He denies wrongdoing and says the money was from an unnamed Middle Eastern donor.

CGN’s 1MDB deal was revealed after Mr Najib held talks on Monday with Li Keqiang, his Chinese counterpart. Mr Li announced Beijing would both buy more Malaysian government bonds and offer Kuala Lumpur the chance to purchase almost $8bn of Chinese debt and shares.

The 1MDB deal is part of a broader overseas expansion by CGN, including a high-profile push in the UK. CGN’s rival China National Nuclear Corp agreed a deal last week to build two nuclear power plants in Argentina.

Link: http://www.ft.com/cms/s/0/2f8a2b1e-9274-11e5-9e3e-eb48769cecab.html?ftcamp=published_links%2Frss%2Fasiapacific%2Ffeed%2F%2Fproduct#axzz3sOgbYepM

Saturday, September 19, 2015

Malaysia Fund 1MDB’s Missing Money Problem Grows

By BRADLEY HOPE and TOM WRIGHT. Updated Sept. 18, 2015 7:59 p.m. ET published by WSJ.

Questions about a troubled Malaysian state investment fund and missing money in the Middle East have widened to include nearly $1 billion more.

The Wall Street Journal reported last week that officials in Abu Dhabi were trying to understand why a $1.4 billion transfer that the fund, 1Malaysia Development Bhd., said it made to a counterparty in the Middle Eastern emirate wasn’t received. Now, those officials are questioning a further $993 million that 1MDB reported it paid to the Abu Dhabi fund, the International Petroleum Investment Co., but which also appears to be largely missing, people familiar with the matter said.

Officials at IPIC didn’t respond to requests for comment. Officials at 1MDB didn’t respond to requests for comment before this article was published online, but afterward said the source and purpose of the payments were clear: to settle the termination of some options that had been issued to IPIC.

The questions deepen the mystery around 1MDB, which was set up by Malaysian Prime Minister Najib Razak in 2009 to invest in Malaysia’s economy. The fund is struggling to repay more than $11 billion in debt and is at the center of a corruption scandal that is destabilizing Mr. Najib’s government.

Earlier this year, a Malaysian government investigation found almost $700 million entered the prime minister’s private accounts through entities linked to 1MDB ahead of a close election in 2013. The source of the money is unclear, and the government investigation hasn’t detailed what happened to the funds that went into Mr. Najib’s personal accounts. Malaysia’s anticorruption body in August said the funds were a donation from the Middle East. The donor wasn’t specified.

Attempts to reach Mr. Najib weren’t successful. He has denied any wrongdoing or taking money for personal gain.

The link to the Abu Dhabi fund came in 2012, when it agreed to guarantee $3.5 billion in bonds issued by 1MDB to fund the purchase of some power plants. In return, IPIC was given options to buy a stake in those power assets. But last year, both sides agreed to end that deal with 1MDB agreeing to buy back the options for an undisclosed price.

1MDB said it made a transfer of nearly $1 billion to an IPIC subsidiary in November as partial payment for the options, according to a copy of a draft report by Malaysia’s auditor general that was reviewed by The Wall Street Journal.

Neither the financial records of IPIC, nor its wholly owned subsidiary Aabar Investments PJSC, for 2014 mention receipt of the money. They say only in a footnote that as of the end of 2014, 1MDB owed IPIC $481.3 million in outstanding payments for the options. No substantial amount of money was received by IPIC, the people familiar with the matter said. It isn’t clear how IPIC arrived at the $481.3 million figure and how it relates to the nearly $1 billion transfer 1MDB says it made to IPIC.

In its statement after this article was posted online, 1MDB said it can’t comment on the accounting treatment by the Abu Dhabi fund or its subsidiaries. It also said the matter of the options has been resolved.

“1MDB can confirm that pursuant to the payment made by 1MDB, the options were in fact terminated,” the fund said in a statement.

The missing $1 billion is the second payment that 1MDB reported it made and IPIC said it didn’t receive. Financial statements from 1MDB and a report by the Malaysian auditor general, which is one of a number of agencies investigating 1MDB, show that the fund made a separate payment of $1.4 billion to IPIC. That payment was described as collateral for the loan guarantees that Abu Dhabi provided on the bonds issued by 1MDB. Last week, the Journal reported that payment also was missing and that Abu Dhabi officials were looking into it, according to people familiar with the matter.

The 1MDB fund said last week that it stood by its audited financial accounts and that its auditor, Deloitte Touche Tohmatsu Ltd., had made “specific and detailed” inquiries into the collateral transfer before signing off on the accounts. Deloitte declined to comment.

On Aug. 14, the Swiss attorney general’s office opened criminal proceedings against two unidentified executives of 1MDB and against what it called persons unknown for suspected corruption and money laundering. It also has frozen tens of millions of dollars in Swiss bank accounts. Swiss authorities on Tuesday said Malaysia has agreed to allow its prosecutors to question witnesses.

1Malaysian Development Berhad has condemned as "wrong, poorly sourced, sensationalist and malicious" the latest article by the Wall Street Journal concerning 1MDB.

The article related to "nearly US$1.0 billion" of payments which WSJ said was made by 1MDB for termination of certain options.

The state-owned fund said: "Given the severity of the unproven allegations, the malicious insinuations made and the impact on the 1MDB rationalisation plan, we would have expected at the very least that the Wall Street Journal would have the decency and courage to name its source and/or provide proof."

"This inability to substantiate clearly shows the shallow nature of its assertions and casts serious doubt on whether or not the Wall Street Journal editors themselves believe in the weak story, cobbled together by its reporters."

A former senior member of Malaysia's ruling party said authorities prevented him from boarding a flight on Friday bound for New York, where he planned to lodge a complaint with police against indebted state investor 1Malaysia Development Bhd (1MDB).

Khairuddin Abu Hassan has already lodged complaints in Switzerland and Hong Kong regarding banking activity involving 1MDB, which has been linked to various individuals under investigation in Switzerland for suspected corruption.

Khairuddin said on his official Facebook page that immigration officials prevented him from leaving on orders from Malaysian police, who later asked him to report to Kuala Lumpur's police headquarters at 11 a.m. (0300 GMT) on Monday.