Najib Is a Survivor in Malaysia’s ‘Game of Thrones’

Donald Greenlees
National Interest
April 20, 2016

In the court of domestic and international public opinion, Malaysian Prime Minister Najib Razak is guilty of a level of corruption and abuse of office not seen in Southeast Asia since the days of the dictators. Najib’s rule evokes memories of Marcos’ Philippines and Suharto’s Indonesia. The parallels include a family bent on amassing vast wealth.

There is now enough evidence in the public domain to warrant the removal of Najib from office. But will he go?

Najib did consider resigning last year when the scandals over the plundered sovereign wealth fund, 1 Malaysia Development Berhad (1MDB), split his cabinet according to a source familiar with discussions at the time. The condition Najib set was that he and his wife were granted immunity from prosecution.

But talk of an early departure has now dissipated. It appears likely Najib will try to stay in office and fight for re-election in 2018. Read the rest of this entry »

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1MDB board outrage as US$700m goes to Good Star

Aidila Razak
Malaysiakini
10 Apr 2016

Slightly over half a year since its conception as Terengganu Investment Authority, the now Finance Ministry-owned 1MDB made its first deal – and blunder.

On Sep 30, 2009, it parted with a massive US$1 billion after less than two weeks of due diligence – a whopping US$700 million of which went to an unrelated firm, Jho Low-linked Good Star Limited.

On social media that day, Li Lin Seet, an associate of Low whom Sarawak Report linked to the deal, mentioned feeling “the earth moving”. Eleven days later Li was in Las Vegas, guzzling world’s expensive champagne, Cristal.

Over in Kuala Lumpur, however, the 1MDB board was in a less celebratory mood. Read the rest of this entry »

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PetroSaudi’s US$1 billion ruse

Aidila Razak
Malaysiakini
9 Apr 2016

Barely a month after the Finance Ministry took over Terengganu Investment Authority (TIA), a royal suitor came a-knocking.

On Aug 8, 2009, Prince Turki of Saudi Arabia sent a letter to Prime Minister Najib Abdul Razak to introduce PetroSaudi International chief executive Tarek Obaid.

Tarek proposed a joint venture with the fund, now rebranded 1MDB. The deal – US$1 billion from 1MDB and some questionable “oil wells” in Argentina and Turkmenistan said to belong to PetroSaudi International.

But this was not Tarek’s first introduction to the fund. Read the rest of this entry »

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1MDB’s ‘original sin’ and Jho Low

by Aidila Razak
Malaysiakini
8 Apr 2016

The story of 1MDB begins in 2009, in the oil-rich east coast state of Terengganu. Flushed with this black gold, the state decides to start a sovereign wealth fund so its riches could last for generations and more.

But what transpired between the formation of Terengganu Investment Authority (TIA) on Feb 27, 2009 and the day it was rebranded 1MDB on July 31, 2009 is not the stuff of fairy tales.

Instead, it was a tale of boardroom tussles, menteri besar intervention, royal outrage and a special adviser named Jho Low.

Below is the chronology of events, according to the Public Accounts Committee’s (PAC) report on 1MDB tabled at the Dewan Rakyat yesterday. Read the rest of this entry »

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Don’t Kill The Goose That Lays Our Golden Egg

Koon Yew Yin
20th April 2016

Recently there was a news report that the serious shortage of labour has caused 14 furniture manufacturers in Johor to close shop. According to Malaysian Furniture Council president Chua Chun Chai, the furniture industry in the peninsula is facing a shortfall of some 35,000 workers. This situation has caused 300 furniture makers and workers in Bakri, Muar to demonstrate and putting up banners proclaiming “No foreign workers = end of the industry”.

According to Mr. Chua, the foreign worker recruitment freeze had dealt a heavy blow to the foreign labour-intensive industry. The hardest-hit states are Johor, Selangor and Penang which together produce 95% of the total furniture the country exports, he said, adding that the biggest markets for Malaysian furniture are the US, Japan, China, Australia, the UK, India and United Arab Emirates.

“Last year, Malaysia’s furniture export hit RM9 billion, which was 14.1% more than the 2014 figure. “If not for the freeze on recruitment of foreign workers, we were looking at breaching the RM10 billion mark this year. But with a shortage of labour we are facing, the export is expected to shrink greatly. “As such, the council is appealing to both the prime minister and deputy prime minister to look into our predicament seriously,” he said.

Actually, the problem of shortage of foreign workers as a result of the recent freeze is not confined to the furniture industry alone. Practically every sector of the country’s economy is dependent on foreign labour. Read the rest of this entry »

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Do Malaysians Want To See Proton Go Bankrupt?

Koon Yew Yin
18th April 2016

I am not surprised to see The Edge front page article ”SAVING PROTON” on 18th April 2016. Dr Mahathir, the founder of Proton was interviewed last week by The Edge. You can read the whole interview on page 65.

Among several other questions, Dr Mahathir was asked “Do you think the Rm 1.5 billion soft loan can turn Proton around? “

Answer quote “Well, under the present condition, yes, but we would have been able to turn around earlier. Proton car sales today have plummeted unusually because normally, we sell about 4,000 cars a week. It came down to 2,000 cars a week, which we can still survive on. We don’t understand why. This month, it came down to 200 cars a week. We don’t understand why”.

I am sure all Malaysians can understand why if you read on. Read the rest of this entry »

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I volunteer my services to Najib to nail the “lie” once and for all, provided he could prove to me that allegations that RM2.6 billion “donation” originated from 1MDB was a lie!

I tweeted “Najib’s strategists world’s dumbest unable to nail a lie!” when I read Malaysiakini’s report “PM’s aide: RM2.6b came from 1MDB a lie by Mahathir” last evening.

When Malaysiakini uploaded the Bernama report “Senators urge Mahathir to apologise to Najib”, it confirmed that Prime Minister Datuk Seri Najib Razak has a most dim-witted team of strategists, lacking nimbleness of wit and mind or the ability to improvise on-the-run, but continuing to expect UMNO/BN Ministers, leaders and MPs to follow a script which had already been discredited and should have been chucked into the garbage can.

Najib may have among the world’s highest-paid professionals in his propaganda and psychological warfare team, but what could they produce when they are headed by loud-mouthed and low-IQ czars for strategic media communications? Read the rest of this entry »

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Cost of Insuring Malaysian Bonds Climbs on 1MDB Worries

by Jake Maxwell Watts
Wall Street Journal
April 19, 2016

The cost of insuring five-year Malaysian government bonds rose to $164.20 on Tuesday

SINGAPORE—The cost of insuring against losses on Malaysian government bonds rose Tuesday on concerns that the national government could be on the hook for billions of dollars of debt owed by state development fund 1Malaysia Development Bhd.

The state fund, which is the focus of corruption probes in at least seven countries, has almost $13 billion in debt it is struggling to repay. 1MDB has denied wrongdoing and says it is cooperating with investigations.

A dispute made public this week between 1MDB and the Abu Dhabi guarantor of some of its debt, International Petroleum Investment Company, has put the future of a debt-workout agreement in doubt and in turn has shaken investors who fear the Malaysian government may need to step in.

The cost of insuring five-year Malaysian government bonds rose to $164.20 on Tuesday, up from $160.18 at Monday’s close and 9.7% more expensive than at Friday’s close before the dispute became public. The bond prices themselves were little changed, with the five-year yield at 3.42% on Tuesday, from 3.41% a day earlier. Read the rest of this entry »

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Malaysia faces bailout question after $1 billion spat with Abu Dhabi fund

By Saeed Azhar and Umesh Desai
Reuters
EuroNews
19/04/2016

(Reuters) – The Malaysian government on Tuesday was facing the prospect of having to bail out the scandal-tainted state fund 1MDB, after a $4.6 billion (£3.2 billion) debt deal with an Abu Dhabi sovereign fund collapsed this week.

The International Petroleum Investment Company (IPIC) said on Monday that 1Malaysia Development Berhad’s (1MDB) had failed to make a $1.1 billion payment, and so was terminating last June’s debt deal.

“The government wouldn’t want to risk having a default on its books, so if it came down to it, they would want to keep a clean record,” said Krystal Tan, a Singapore-based economist at research firm Capital Economics, talking about risk of a bailout for 1MDB.

Any government intervention would pile more pressure on Prime Minister Najib Razak, who founded 1MDB and is on its advisory board. He has faced calls to step down over allegations of graft and mismanagement at the fund.

“It’s (agreement with IPIC) failure not only now places 1MDB itself at risk, but now involves a bailout by the Ministry of Finance,” opposition leader Tony Pua said in a statement.

The Malaysian finance ministry is the sole shareholder of 1MDB. Read the rest of this entry »

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Malaysia is big loser from Abu Dhabi fight

By Una Galani
Breakingviews
Reuters
April 19, 2016

Malaysia’s effort to contain the financial fallout from its wayward sovereign fund is unravelling. Scandal-hit 1Malaysia Development Berhad is embroiled in a scrap with a state-backed investor in Abu Dhabi over a $4.5 billion debt deal. The risk for the southeast Asian nation is that its finance ministry will have to bear the burden. That’s exactly the outcome the fund championed by Prime Minister Najib Razak has been trying to avoid.

To recap, 1MDB racked up massive debts on a string of questionable deals. After it ran into trouble, it negotiated a lifeline last year from International Petroleum Investment Company, which is backed by Abu Dhabi royal Sheikh Mansour bin Zayed al-Nahyan.

IPIC agreed to lend 1MDB $1 billion and assume responsibility for bonds worth $3.5 billion. The quid pro quo was that IPIC would receive assets of equivalent value from the Malaysian fund by the end of June this year.

Now IPIC has missed an interest payment on 1MDB’s bonds. The details are sketchy, but the Gulf fund says it doesn’t have to honour the debt agreement because 1MDB hasn’t fulfilled its side of the deal.

In the end, both parties look foolish. After all, 1MDB’s financial woes owe much to alleged high-level corruption involving former officials on both sides. The fight looks set to end up in the courts. Read the rest of this entry »

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The story that is dividing Malaysia’s media

Listening Post | 19 Apr 2016
Al Jazeera

For much of the past year, the biggest news story in Malaysia has been the so-called ‘1MDB’ corruption scandal – a story of millions of dollars of public money allegedly funnelled into the bank accounts of Prime Minister Najib Razak.

The online investigative magazine Sarawak Report broke the story last June and many in the mainstream media, who have links to the government, were slow to follow up.

Only a small number of online outlets, such as Malaysiakini, followed the corruption investigation closely. But the government is keen to keep this story out of the public eye. The Listening Post spoke to Malaysiakini editor Steven Gan about the 1MDB scandal, the limitations of Malaysia’s mainstream media and the growing threat to online freedom of the press.

Steven Gan, editor-in-chief of the Malaysiakini website, speaks about the 1MDB scandal, and the growing threat to online freedom press [Will Yong/ Al Jazeera]

The Listening Post: The corruption scandal swirling around the prime minister has been a huge news story in Malaysia. What is the significance of this story? How much has it dominated the news and what impact is it having?
Read the rest of this entry »

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Graft denials come under strain in Malaysia fund scandal

Yahoo7 News
AFP
April 19, 2016

Kuala Lumpur (AFP) – Malaysia’s prime minister and the company he founded, 1MDB, have weathered a year-long barrage of corruption allegations with nothing-to-see-here assurances, but a string of recent revelations is placing those denials under growing strain.

On Monday an Abu Dhabi sovereign-wealth fund which was helping 1MDB recover from massive debts abruptly withdrew its safety net, declaring the Malaysian state-owned company in default on a $1.1 billion loan.

The move centres on suspicions that 1MDB — rather than repay the loan to the Abu Dhabi fund, International Petroleum Investment Co (IPIC) — instead diverted the money, according to a Wall Street Journal report.

The dispute caps a string of recent revelations that have severely undermined claims by 1MDB — short for 1Malaysia Development Berhad — that its finances are in order and no graft occurred.

The scandal engulfing 1MDB and Prime Minister Najib Razak, who founded the company in 2009 to fund development projects, is staggering in its scale and complexity. Read the rest of this entry »

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1MDB Expects Bondholders to Be Paid Amid Dispute With Partner

Shamim Adam
Bloomberg
April 19, 2016

Malaysia’s debt-ridden state investment fund, which is facing the risk of a bond default, said it expects an interest payment to be made as it enters the start of a five-day grace period. The ringgit extended gains.

1Malaysia Development Bhd. has a cash surplus of about $550 million, or 11 times the $50 million amount due on interest that was payable on April 18, President Arul Kanda said in a Bloomberg Television Malaysia interview on Tuesday. The company is in dispute with Abu Dhabi’s sovereign wealth fund, which earlier agreed to pay interest on the bonds, and Kanda said he expects an “amicable resolution.” Read the rest of this entry »

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1MDB dispute intensifies as Abu Dhabi ends relationship

Jeevan Vasagar in Singapore
Financial Times
April 18, 2016

The dispute between an Abu Dhabi sovereign fund and Malaysia’s troubled state fund 1MDB over more than $1bn in missing payments intensified on Monday when the emirates investment vehicle said its Malaysian counterpart was “in default” on an agreement between the two and terminated the deal.

The Gulf emirate’s International Petroleum Investment Company (Ipic) ended its relationship with its Southeast Asian counterpart in a filing to the London Stock Exchange on Monday.The Abu Dhabi fund said 1MDB and Malaysia’s ministry of finance were in default on the deal, including an obligation to pay $1.1bn plus interest, and that 1MDB continued to be bound by its commitments under the agreement.

The dispute relates to a pair of 1MDB bond issues in 2012, which were guaranteed by Ipic. The two funds entered into an agreement last year in which Ipic provided a $1bn cash bailout and agreed to make interest payments on the bonds. In return 1MDB agreed to transfer assets to Ipic.

Ipic was now considering options to remedy the alleged default, including referring the matter to the appropriate dispute resolution forum, it added in its regulatory filing. The move is the latest twist in an affair that has buffeted Malaysia’s government and prompted investigations in at least five countries including the US and Switzerland. Read the rest of this entry »

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Confidant of Malaysia Prime Minister Najib Had Central Role at Troubled 1MDB Fund

By TOM WRIGHT and BRADLEY HOPE
Wall Street Journal
April 18, 2016

Jho Low controlled hundreds of millions of dollars of money thanks to network of contacts, amassed riches himself

In March 2013, a young Malaysian financier sent a heads-up to an employee at a Kuala Lumpur bank that “681 American pies” would soon be arriving from overseas.

The sender, Jho Low, emphasized the need for secrecy, according to a transcript of BlackBerry instant messages reviewed by The Wall Street Journal. The employee, he wrote, should tell the bank’s chief executive that “PM” didn’t want his name, address or identity-card number to appear on the transaction.

Within days, $681 million arrived in two transfers at AmBank Bhd. to be deposited in the personal account of Malaysian Prime Minister Najib Razak, according to documents seen by the Journal.

Global investigators believe those transfers represent a portion of the money diverted from a Malaysian state economic-development fund called 1MDB over several years, according to people familiar with probes in two countries. As they dig deeper, investigators have increased their estimates of siphoned funds to as much as $6 billion, a sharp increase from a few months ago, said a person familiar with one country’s probe. Read the rest of this entry »

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Winter in Bumi Kenyalang

Dyana Sofya
Malay Mail Online
Tuesday April 19, 2016

APRIL 19 ― It was a bright cold day in April and the clocks were striking thirteen. Looking out the window of my London apartment, the sky promised warm sunshine and a fresh breeze.

After a typically long and cold English winter, I could not wait to soak in some heat. Putting on my sunglasses, I left my heavy jacket at home as I strolled to the local supermarket.

However, as I finished stocking up on groceries, I noticed that the bright sun had been replaced by menacing clouds and rain began to pour. I regretted that I had not worn my heavy jacket, but I was even more annoyed that I had fallen for the same trick that so many others in this world fall for: When winters are dark, it is easy to trust the first decent prospect of a better future.

However, the gullible person always pays in the end for improvidence, as the world is full of treachery and false promises.

Later on the same day, I met up with my Turkish friend Zehra at university and told her what had happened. She smiled wryly and said, “You merely underestimated the rain. Imagine if you had underestimated your country’s leader.” Read the rest of this entry »

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With the sudden RM14 billion 1MDB bailout crisis, time to have a new Prime Minister and a new Finance Minister to clean up the Augean Stables caused by Najib’s twin mega global scandals

The past fortnight had been a disastrous two weeks for the Prime Minister Datuk Seri Najib Razak and his close ally Penang billionaire Jho Low’s brainchild, the 1MDB Malaysia sovereign fund but it has been downright nightmarish for Malaysia in confirming the country as among the world’s top scandal-ridden nations.

The Public Accounts Committee (PAC) Report on 1MDB, meant to be the centerpiece of a media scam by Najib’s strategists to create the myth that it had exonerated Najib from any wrongdoing in the RM50 billion 1MDB and RM4.2 billion “donation” twin mega scandals proved to be a dud.

In a matter of four days, the media scam was thoroughly exposed and discredited when firstly, detailed reading showed that the PAC Report had not made any such conclusion or finding to exonerate Najib, and secondly, when the Abu Dhabi-state owned International Petroleum Investment Company (IPIC) in a statement to London Stock Exchange on 11th April stated that neither it nor or its subsidiary Aabar Investments PJS had any links or received US$3.5 billion which 1MDB had paid to the phoney British Virgin Islands-incorporated Aabar Investments PJS Limited (Aabar BVI) .

This was followed by the desperate attempt to salvage the situation by enlisting the Saudi Foreign Minister Adel Al-Jubeir to declare that the billions of ringgit deposited into Najib’s personal banking accounts were “a genuine donation” from Saudi Arabia “with nothing expected in return”. Read the rest of this entry »

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1MDB in default, declares Gulf fund

Leslie Lopez Regional Correspondent In Kuala Lumpur
Straits Times
19th April 2016

$4.7b bond raised by 1MDB thrown into limbo as KL-Abu Dhabi row escalates

The dispute between Abu Dhabi’s second-largest wealth fund and Malaysia’s state-owned 1Malaysia Development Berhad escalated yesterday after the Arab emirate group declared Kuala Lumpur’s fund was in default of a multibillion-dollar financial assistance arrangement.

The declaration by Abu Dhabi’s International Petroleum Investment Company, or IPIC, against 1MDB immediately throws into limbo a complex US$3.5 billion (S$4.7 billion) international bond the Malaysian fund raised in May 2012 with full, iron-clad guarantees from the tiny oil-rich emirate’s business entities.

And because of the protracted nature of the disagreement, financial executives tracking developments in the bitter feud say that international investors, who subscribed to the bonds that were arranged by international banking group Goldman Sachs, may have to wait a long time before they are compensated. Read the rest of this entry »

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Malaysia’s 1MDB defaults on US$1b loan, says Abu Dhabi fund

19 Apr 2016
Channel News Asia

An Abu Dhabi sovereign-wealth entity said on Monday that the Malaysian state fund 1MDB had defaulted on US$1.1 billion it owed in a new blow to the scandal-tainted company.

KUALA LUMPUR: An Abu Dhabi sovereign-wealth entity said on Monday (Apr 18) that the Malaysian state fund 1MDB had defaulted on US$1.1 billion it owed in a new blow to the scandal-tainted company.

The announcement, made in a filing to the London Stock Exchange by Abu Dhabi-based International Petroleum Investment Co (IPIC), raised the spectre of Malaysian market turmoil if 1MDB is unable to dig out from under its huge debts.

1MDB, or 1Malaysia Development Berhad, was founded by Malaysian Prime Minister Najib Razak in 2009 but is now teetering on the verge of default amid multiple investigations around the world into allegations that billions were looted from it.

IPIC had agreed in 2012 to guarantee US$3.5 billion in 1MDB bonds, lend it more than a billion dollars, and make interest payments on the bonds.

In its statement, IPIC said 1MDB and its owner, Malaysia’s Finance Ministry, had failed to pay back more than US$1.1 billion they owed. “As a result, 1MDB and MOF are in default,” IPIC said. Read the rest of this entry »

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Malaysia’s 1MDB at Risk of Default as Partner Ends Bond Support

Shamim Adam
Bloomberg
April 18, 2016

Malaysia’s troubled state investment company faces the threat of default after a dispute with an Abu Dhabi sovereign wealth fund leaves bondholders waiting for an interest payment due Monday. 1MDB’s dollar bonds slumped.

Abu Dhabi’s International Petroleum Investment Co. said its obligations of financial support to 1Malaysia Development Bhd. have ended after the company and Malaysia’s finance ministry failed to pay it more than $1 billion, according to a stock exchange filing. IPIC, which agreed last year to pay interest for 1MDB bonds that it guaranteed, didn’t mention the Monday payment due.

1MDB said bondholders haven’t been paid, and didn’t say if it would do so. The Malaysian finance ministry said it had been informed by 1MDB of the dispute, and “wishes to make clear that it will continue to honor all of its outstanding commitments in the financial markets.”

Failure for either side to fulfill the debt obligation could result in the first default for 1MDB since its inception in 2009, deepening its troubles at a time when it’s the target of global investigations into allegations of money laundering and embezzlement. Authorities from the U.S. to Switzerland are trying to determine if some of the billions of dollars that 1MDB raised were siphoned out inappropriately. Read the rest of this entry »

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