The Malaysian Insider
18 February 2015

Online news portal Sarawak Report has published a 26-page document, revealing sovereign fund 1Malaysia Development Berhad (1MDB) had paid US$1 billion of public funds into a shady venture with Petrosaudi International, despite its lack of a tangible track record.

“What the document reveals is that the prime minister and his advisors at 1MDB paid USD1 billion of borrowed public money into a venture that already carried a USD700 million debt in the form of a loan from PetroSaudi’s parent company to the subsidiary that was entering into the joint venture, PetroSaudi Holdings (Caymans) Limited,” it said in its report.

“Crucially, under the terms of the joint venture, agreed to by 1MDB, the Malaysian development fund had committed to pay back this whopping great loan to the parent company, PetroSaudi International, on day one of the joint venture!,” it added.

The document showed that the joint venture agreement was sealed on September 28, 2009 by 1MDB’s then managing director, Shahrol Halmi and his counterpart in Petrosaudi, Tarek Obaid.

“Despite 1MDB’s servers having been wiped before Christmas, the copy was passed to Sarawak Report by a concerned insider just days after opposition leader (Datuk Seri) Anwar Ibrahim was controversially jailed last week,” Sarawak Report reported.

It said the debt payment to Petrosaudi’s parent company meant that only US$300 million of the original US$1 billion paid into the venture by 1MDB was left available to be used for activities.

“The joint venture document also makes provision for a whopping further $5 billion in future funding by 1MDB into the dodgy venture on ‘terms to be agreed’.”

It also revealed that Prime Minister Datuk Seri Najib Razak and 1MDB had falsely implied that Petrosaudi had injected cash into the fund.

“Another falsehood promoted by Najib and 1MDB’s publicity machine at the time of the joint venture on 29th September 2009 was the suggestion that PetroSaudi was somehow officially connected to the state of Saudi Arabia.

“Observers, including Sarawak Report, later proved that the company was in fact a private venture set up by a little-known Saudi businessman called Tarek Obaid and his pal, who happened to be one of the many princes of Saudi Arabia,” the portal said.

The investigative website revealed last week that 1MDB’s administration had wiped out all its computer and server records in an attempt to conceal information about its investments.

Sarawak Report also noted that it was revealing the document to fight Putrajaya’s “obsessive secrecy” over 1MDB’s dealings.

“We do so in defiance of the obsessive secrecy of the Malaysian Government, which ought to have made such documents transparent and available in its public accounts,” it added.

Petaling Jaya Utara MP Tony Pua, who is a strong critic of the government’s investment vehicle, has also questioned the move.

“It is like you or me buying a house that has a great big loan of two thirds of its market value outstanding on the property. Who in their right mind would buy into such a deal?” he said.

Pua, a member of the Public Accounts Committee (PAC), has urged that the body be allowed full access to the affairs of 1MDB, which has seen its debt soar to RM42 billion. – February 18, 2015. –