In the media, the 1Malaysia Development Bhd (1MDB) was a state investment fund that came under investigation in July 2015 for alleged improprieties. It was one of the biggest financial scandals in the world. NMH editorial team comprising Azizi Khan, Hasnah Abdul Rahman, Joe Fernandez and Emma Harith look at the 1MDB case/s that saw the involvement of various jurisdiction, financial institutions and powerful individuals. In Part 1, we trace the beginnings of the 1MDB Story and the timeline leading to what may happen before the year ends.
KUALA LUMPUR – Let’s admit it, are you as baffled about 1MDB as the rest of the world? The spillovers from this case, which traversed thousands of miles, have not only brought about a couple of books published about it, but movies too.
The trials that are part of the 1MDB case network have been going on for years, some as far back as five years ago. Suspects have been apprehended, some have been tried, others have been incarcerated – whether lawfully or otherwise, while a few others who were allegedly involved have been let loose to either remain in hiding or have fun with their ill-gotten gains.
More importantly, efforts have been made to recover the monies and assets purportedly stolen from 1MDB, while the debts associated with 1MDB (take note that these debts include the principal amount and exacerbated with high interest and the prevailing exchange rates) have reportedly been almost paid off.
1MDB Debt Almost Settled
According to Deputy Finance Minister 1, Datuk Seri Ahmad Maslan, the 1MDB issue is ‘almost resolved’, with RM5.15 bil outstanding debt.
Additionally, media reports have indicated that as of March this year, around 70% of stolen 1MDB assets and funds have been recovered.
Malaysian Anti-Corruption Commission (MACC) chief Azam Baki said that overall, the MACC has recovered RM28.93 billion (S$8.73 billion) worth of 1MDB assets and funds.
“We estimate around 70 percent of the assets and funds have been recovered,” Azam Baki disclosed, as quoted by The Straits Times.
Let’s look at the 12 facts about 1MDB that hopefully will get you thinking about how this convoluted web of corporate shenanigans first started (part 1). In Part 2 we will take the 12 facts beyond the shores of Malaysia and traversed to other parts of the world where the mastermind, fugitive businessman Low Taek, or Jho Low, and his team, play a major part in.
The 12 Facts About 1MDB (Part 1):
- Setting Up Of TIA (Terengganu Investment Authority): Initially established in 2009 as an entity owned by the Terengganu government, the Terengganu Investment Authority (TIA) was later renamed as 1MDB.
- Jho Low Planned It For Two Years Before 1MDB Was Set Up: According to a witness in the 1MDB trial, Joanna Yu Ging Ping, a former relationship manager of AmBank, Jho Low had informed the bank that his team was looking to set up a sovereign wealth fund (the predecessor of 1MDB) to raise funds to develop Terengganu, two years before it was officially formed in 2009.
- Focus On Development & CSR Activities: 1MDB’s new Mandate included donations for CSR (corporate social responsibility) activities, which made their way into Najib’s accounts who then thought the funds were for CSR and political donations, originating as donations from the Saudi King.
4. Sharol Was CEO OF 1MDB: Then CEO, Sharol Azral, managed 1MDB. Najib was the chairman of the board by purview of his Finance Minister role and WAS NOT privy to day-to-day operations. Shahrol was virtually taking orders from international fund manager Jho Low, now fugitive, who allegedly name-dropped Najib’s name all over the place. During questioning at the trial, Shahrol said he had not briefed Najib or anyone from the Ministry of Finance at the time on the finer details of the joint-venture proposal with 1MDB by Aabar BVI.
5. The Role Of Goldman Sachs: US investment bank, Goldman Sachs raised unverified billions in 1MDB bond monies. DoJ discovered US$4.5b was diverted for probably nefarious purposes. In May and October 2012, it helped 1MDB sell bonds worth $3.5bn to raise money to buy power assets, while in March 2013, it helped raise a further $3bn in an additional bond sale, this time to cover “new strategic economic initiatives” between Malaysia and Abu Dhabi.
6. 1MDB’S Failure: Rival politicians manipulated 1MDB news and Najib was made the scapegoat. Facts were twisted suggesting that 1MDB’s failure was due to Najib when in actuality, rogue elements allegedly diverted monies into various dubious accounts.
7. The IPO Failure: Although 1MDB had more assets than liabilities, due to bad press, the IPO failed. Today, its biggest asset, the TRX Exchange, has proven to be a major success and an income generator. It is set to become KL’s most dynamic lifestyle destination.
8. The Detention of Najib: RM42M SRC International case (not 1MDB), which is full of irregularities, was used to convict Najib. Indeed, it was a black day for justice in Malaysia.
9. Discharge & Acquittal: Federal Court Review Panel Head Judge ruled DNA (discharge and acquittal) for Najib. He held that it was unfair for the former prime minister to pay the price for the mistakes made by his counsel in the SRC International Sdn Bhd appeal hearing. In his decision, Justice Abdul Rahman said that the previous bench should have let the applicant (Najib) address the bench first before the prosecution made its submissions.
10. Johor Sultan: The Sultan of Johor (Malaysia’s next King), has publicly expressed that Najib should be released if more people don’t join him. He had decreed that either Najib should be released or more people should join him in jail. The Sultan implied that dictatorial former Prime Minister Tun Mahathir Mohamad — “someone who was in power for 24 years” — should be in jail as well.
11. Harbeas Corpus/Pardon: Former COA Judge Hamid Sultan Abu Backer, expressing dismay in a recent op-ed on the SRC case, advised that the Najib family file an Application for habeas corpus and/or Petition for Pardon with the Conference of Rulers.
12. United Nations Review: Najib awaits UN Review by Christmas on arbitrary detention. The UN would find the SRC case incomplete and can only call for 2nd Review. The high-powered UN Review Panel would discover — read based on self-evident facts — that there was no closure on Najib’s RM42m SRC International case.
Look out for Part 2 where we give you more facts to blow your mind. – NMH
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