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Showing posts with label United Malays National Organisation. Show all posts
Showing posts with label United Malays National Organisation. Show all posts

Friday, 8 April 2016

1MDB business model relied on debt to form capital is not sustainable


PETALING JAYA: 1MDB was unsustainable from the start, relying heavily on financial assistance to stay afloat.

The PAC observed that 1MDB’s capital financing structure and financial performance were both unsatisfactory.

“1MDB relied on debt (bank loans, bonds and sukuk) to form its capital, a chunk of which had been sanctioned or supported by the Government.

“Initially, the debt stood at RM5bil in 2009, and went up to RM42bil, compared to its assets of RM51bil in the financial year ending March 31, 2014, and it spent RM2.4bil to pay off interests.

“In January 2016, its debt was RM50bil, compared to its assets of RM53bil, where 1MDB spent RM3.3bil to pay off interests between April 1, 2013, and March 31, 2015,” said the report.

The PAC report also stated that 1MDB had paid RM3.3bil in interests on the loans it took from April 1, 2014, to March 31, 2015, which 1MDB said had yet to be audited.

“It is obvious that the debt amount and repayment of interest are too high compared to the company’s cash flow,” said the committee.

1MDB had also heavily relied on the refinancing exercise to settle matured debts and take new loans, which were used to settle interests on previous loans, among others.

The PAC report also found that 1MDB began facing an imbalance in cash flow in November 2014, five years after it started operations.

“The management and board of directors relied on the Initial Public Offerings (IPO) of Edra Energy Berhad to generate funds, but the IPO could not be carried out,” said PAC.

In the same month that year, 1MDB announced its first loss of RM665mil, resulting in its inability to pay off its almost matu­ring debts which stood at RM2bil, through its refinancing exercise.

“The company’s business model is overly dependent on loans and this caused a burden on the company as it did not have enough income to sustain operational costs and pay off its loans,” read the report.

The PAC also said that as a state investment arm, 1MDB should have focused on best practices, and raised examples of weaknesses in its administration.

“For instance, the board of directors was too dependent and often accepted explanations by the management without delving into the details.

“Indeed 1MDB’s experience is a lesson to all government-linked corporations on the importance of effective administration and integrity,” said the committee. - The Star/ANN

Related:

‘Shahrol the man to blame’ 

1MDB to just repay debts, says Arul

Tun M: I was wrong because I named a smaller figure




Tan Seng Giaw: Najib not accountable over 1MDB dealings



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Wednesday, 8 July 2015

1MDB probe gains momentum, a sensitive time for PM and Umno


PETALING JAYA: The probe into claims that funds were channelled into the personal accounts of Prime Minister Datuk Seri Najib Tun Razak heated up when the task force investigating the matter froze six bank accounts and said it was looking into 17 others.

The Wall Street Journal (WSJ) meanwhile revealed documents that it claimed were the basis of its controversial story.

The freeze on the six accounts was issued on Monday, according to a statement issued jointly by Attorney-General Tan Sri Abdul Gani Patail, Bank Negara Malaysia governor Tan Sri Zeti Akhtar Aziz, Inspector-General of Police Tan Sri Khalid Abu Bakar and Malaysian Anti-Corruption Commission chief commissioner Tan Sri Abu Kassim Mohamed.

“Several documents over the issue of non-compliance with Bank Negara’s rules and procedures have also been seized,” it read.

“As the investigations are still under way, we appeal to all parties to give their fullest cooperation to complete the probe.”

It is learnt that the 17 accounts belonged to various companies and individuals.



While neither the banks involved nor the holders of the accounts were named, several portals claimed they had received confirmation that three of the accounts belonged to Najib.

Hours after the statement was released, WSJ uploaded nine documents on its claim that US$700mil (RM2.6bil) were channelled into three personal accounts of Najib.

The nine documents comprised three flow charts, three remittance forms, two credit transfer notices and a letter of authorisation by Nik Faisal Ariff Kamil, the former chief investment officer of 1Malaysia Development Bhd (1MDB).

However, Najib’s name appeared only in the flow charts. It was not in any of the banking documents in which the last few digits of the account numbers were blanked out.

A banker said it was normal that entire bank account numbers were not made public for fear that the accounts could be hacked.

“What is important is the codes in the documents are correct,” said the banker.

The charts detail funds flowing from SRC International Sdn Bhd, a company that used to be under 1MDB but was subsequently taken over by the Finance Ministry in 2012, into personal accounts supposedly belonging to Najib.

According to the charts, the funds flowed into AmPrivate Banking in AmBank Islamic and the beneficiary, it claimed, was Najib.

Based on one chart, the funds flowed out of SRC International’s account in AmBank Islamic into Gandingan Mentari Sdn Bhd, also in Ambank Islamic.

Subsequently, the money was transferred to Ihsan Perdana Sdn Bhd, whose account is in Affin Bank. From there, the funds were moved to AmPrivate Banking in AmBank Islamic.

There were three accounts under AmPrivate Banking in AmBank Islamic supposedly belonging to Najib. The last few digits of the accounts were blanked out.

The Prime Minister’s name was not to be found in any remittance transfer forms from Affin Bank to AmBank Islamic.

The total amount transferred from Affin Bank to AmBank Islamic was RM42mil and the transactions were done in three tranches.

There were two transactions on Dec 26, 2014 and one on Feb 9, 2015. The reasons for the transfer of funds by Ihsan Perdana to the AmPrivate Banking account were stated as CSR programmes.

Najib’s name is also not visible in the two credit transfer notices from Wells Fargo Bank in the United States to the AmPrivate Banking account under AmBank Islamic.

But a banker said it was normal for the beneficiary’s name to be left out of remittance forms or credit transfer notices.
“The identity of the beneficiary does not need to appear if it is a familiar name. The banks only need the necessary codes and account numbers,” said the banker.

The funds from Well Fargo amounted to US$681mil and were transferred in two tranches, on March 21 and March 25, 2013, according to the documents.

The transaction order came from Tanore Finance Corp in British Virgin Island.

The funds were transferred to AmPrivate Banking account in AmBank Islamic under the Swift Output Code of Single Customer Credit Transfer.

“A Single Customer Credit Transfer means the account is held by an individual,” said the banker. - The Star

Sensitive time for PM and Umno



DATUK Seri Najib Tun Razak has been out and about every day since the start of the fasting month.

He has been seen at a number of Ramadan bazaars, he has been the VIP guest at various buka puasa functions and he has joined the congregation for evening prayers after the breaking of fast.

The fasting month is a test for all Muslims and even more so for the Prime Minister given the issues surrounding him.

The 1MDB issue has snowballed into a political monster for his administration and he is fighting what could be the biggest battle of his political career.

Allegations in The Wall Street Journal (WSJ) that billions of ringgit went into what is believed to be his personal bank account are still reverberating among the financial and political circles.

Najib has responded to the report, calling it wild allegations and insisting that he has never taken funds for personal gain. It was not quite the explanation or answer that people were expecting and it has raised more questions than provided answers.

But many in Umno are prepared to give him the benefit of the doubt even though they are unsure what to make of it.

Najib has a lot of support in his party and up until the recent allegations, he was said to have won over some 75% of the 191 Umno division heads.

They want to rally around him but they need clear answers in order to defend him.

Najib has made it very clear that he intends to sue WSJ and his lawyers are preparing a case to be filed soon against Dow Jones, the publisher of WSJ, in the United States. That is the way to go to clear his name.

The pressure mounted yesterday when four of the country’s top regulators and law enforcers issued a joint statement, saying that the special task force probing 1MDB had frozen six bank accounts related to the case.

The affected bank accounts were not identified but the signatories comprised the Attorney-General, Bank Negara Governor, Inspector-General of Police and the MACC chief.

It was unprecedented and it was a sign that the investigations had become more serious and complicated. The snowball has grown bigger.

Najib’s deputy Tan Sri Muhyiddin Yassin has added to the pressure. He had asked the authorities to look into the WSJ allegations and Umno vice-president Datuk Seri Shafie Apdal has joined in.

Their move confirms the political divide in the party that the Umno crowd has been talking about.

Umno politicians also noticed that Tun Dr Mahathir Mohamad has been rather restrained after months of relentless attacks and it could mean two things.

One, he feels that he has achieved his desired objective – he has got Najib up against the wall.

Two, Dr Mahathir might have realised that in his determination to remove the head of the house, the entire house may come down too.

His campaign against Pak Lah contributed to the 2008 political tsunami and his attacks against Najib has damaged Umno even more.

A group of Umno supreme council members met Najib at his official residence on Sunday night. It was very hush-hush and none of those who attended picked up or returned the calls of reporters, let alone spoke about what transpired.

The speculation is that the meeting was probably not about declaring support for the boss, otherwise they would not be so secretive.

The group was there to seek answers about what Najib plans to do and where he intends to go from here.

This is a very sensitive time for Umno and especially for Muhyiddin. He played a leading role in Tun Abdullah Ahmad Badawi’s exit and he is again in the spotlight.

It is doubly sensitive for Muhyiddin this time around because he is an interested party.

Muhyiddin is being extra cautious because he understands the powers of incumbency and is aware of what the Prime Minister could do to those who are not with him.

Moreover, Najib’s tentacles in the party go back a long way and whoever wants to take him on has to consider the repercussions from his hardcore supporters.

By Joceline  Tan Analysis The Star

Related stories:

Go out and explain 1MDB issue, Umno leaders told
Umno lawyers preparing lawsuit against WSJ
Call to probe how WSJ obtained private banking documents
Opposition Members of Parliament call for snap polls


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Wednesday, 25 July 2012

The modern day slacker

It is this type which frustrates the hardworking Malays, who have worked so hard to bust the myth of the lazy Malay, the subsidy-mentality-bumi, and gives them a bad name.

YOU would have known at least two of this type: the young Malay boy in his late 20s to mid-30s who has the potential, but for no reason at all, seems intent on ruining his life, by simply being lackadaisical and complacent. He is the slacker.

It is this type which frustrates the hardworking Malays, who have worked so hard to bust the myth of the lazy Malay, the subsidy-mentality-bumi, and gives them a bad name.

The latter, who come from various economic backgrounds, burn the midnight oil at their corporate jobs. Some take on another as a side income or work at two jobs.

Their partners or spouses are equally as hardworking, but when drawn into conversation about the idle Malay boy, both will throw their hands up in the air.

Talk to non-Malay professionals and they say nonchalantly, “That’s what you get when you hire these Malays.”

A successful bumi businessman told me once that he hires only young non-Malays, because he had been duped too many times by the boys he wanted to help.

These boys, who seem to be mushrooming by the day, are articulate, and do keep abreast of current events. Interestingly, these boys mainly come from working class backgrounds.

They’re not unintelligent. Have a chat with them – they can be so perceptive that you wonder why they are not in politics or a think-tank. And yet, they are in debt, and seem to relish in their financial piccadiloes; when they are offered opportunities, they take and screw them up halfway.

The reasons are unbelievable: I broke up with my girlfriend. I don’t have money. I don’t have the ilham. My friend owes me money. I owe myself money.

However, despite their apparent flaws, they complain about how the world owes them a living. The government should give me a grant. The government owes me a living because I’m Malay and poor.

People don’t like me because I’m not connected. Girls don’t want to date me because I’m poor and directionless.

Granted, some do try. But they look for short cuts.

Some of them become the “shadows” of the bodyguards, the lesser datuks and proxies to the middleman to the PA to the right-hand man of the “Man Himself”, in vain hopes for a small cut.

If they are lucky, they take back RM5,000. They create small enterprises and mark up costs that defy business logic, that in the end they have to close shop.

The opportunities are already there. Yes, our education system is not perfect, but many have come out from it better and richer.

I also do not deny that working or doing business is not easy either. Yet there are many Malaysian success stories.

Blame the NEP if you want, but the truth is, many have also thrived sans it. Some packed up their bags and moved abroad without a degree or connections. The Internet is at your disposal – for all this talk about not having money, a good number of these boys have a working computer. Mac, no less. So work from home.

Work with clients from everywhere! A friend once hired a Nigerian student in Nigeria to create his website. That young boy from the sticks of Nigeria delivered a really swoosh website within a month.

When asked why they are so dismissive of politics and youth activities, they can tell you, “It’s a waste of time. We’re not America. There’s a tradition of activism there, not here. Besides, we’re the grassroots. The government should take care of us and provide us with incentives.”

How can any government do so, and why should it? This is not about opportunities but attitude!
There is already a social and economic imbalance which will worsen.

Many marriages break down, and some of the increasing reasons I hear from my syariah lawyer friends are that these boys are complacent and do not contribute to the marriage financially.

They do not pick up the slack at home by being the housekeeper, and expect the wives to fund two families. Theirs and his.

Some resent their wives’ successes and create problems. Some of them bring their debts into the family equation.

Economically, if more and more of these youths opt to be slackers, the country’s GDP will go down greatly and crumble into a declining and worsening economy.

The divide between the haves and have-nots will widen. The gender imbalance is already there: More young (Malay) women are in tertiary institutions and working very hard.

Quite a number have told me they fear marriage because they do not want to be beholden to a spouse who cannot contribute to a marriage.

At this juncture, this begs another question.

Why are a good number of young and working class Malays complacent? Sometimes, I feel that the foreign workers deserve citizenship because they work and somehow manage to save for their families back home.

They live in the most deplorable living conditions, and some worse than the shacks I have seen in my kampung.

The question should no longer be about whether Malay youths are politically apathetic. The question should be how to make these boys work and be motivated.

It is a study I greatly welcome and would like to do.

A WRITER'S LIFE By DINA ZAMAN