All the signs are growing that Najib plans for a snap mid-year election and no wonder.
Yesterday’s ‘settlement’ with IPIC/Aabar was a total cave-in for Malaysia and it has left the Prime Minister horribly exposed with a very large bill indeed, due July 31st.
As DAP Finance Spokesman Tony Pua has pointed out, 1MDB surrendered on every point over its dispute with Aabar and the Abu Dhabi sovereign fund IPIC, agreeing to pay back the entire $1.2 billion bail out of June 2015, plus to take on all the remaining expenses on the two so-called ‘Power Purchase Bonds’ taken out by 1MDB in 2012, backed by a supposed guarantee from Aabar’s parent company IPIC.
IPIC spelt the terms out fully (and rather smugly) in its statement to the London Stock Exchange on Monday. The first payment from 1MDB to IPIC is $602,725,000, due at the very latest July 31st,. The second is an identical payment due by the end of December, the IPIC statement confirms.
What IPIC did NOT do, as Jho Low’s spinners had desperately been trying to make out in advance, was to make referrence or give any credence to the claim that under the agreement Malaysia would be finding the money from 1MDB’s dodgy (i.e. non-existent) funds in its Brazen Sky account.
That ridiculous spin was left to 1MDB’s own cheeky little statement yesterday, which left out all the hard detail on the embarassing numbers but went long on claims that 1MDB would find the money to pay back IPIC by “primarily by the monetisation of 1MDB-owned investment fund units”.
“As per the settlement, 1MDB will, amongst others, make certain payments to IPIC and will assume responsibility for all future interest and principal payments for two bonds issued by 1MDB Group companies due in 2022.
These obligations will be met by 1MDB primarily via monetisation of 1MDB-owned investment fund units…” [short on figures, long on ridiculous spin – 1MDB statement]
Journalists had been told by ‘insiders’ (i.e. Jho Low) that these ‘units’ where the ones allegedly held in 1MDB’s Brazen Sky account, which was frozen when Singapore closed down BSI Bank over money laundering the proceeds of thefts from 1MDB – thefts which Najib Razak continues to refuse to acknowledge took place.
There has been no indication that the account has been released and all the evidence indicates it had nothing of value in it anyway.
Yet Najib tried to give the ‘monetisation of units’ spin further momentum by issuing a separate statement through the Prime Minister’s Office:
“The government is pleased that IPIC and 1MDB have resolved their differences in an amicable manner.
We also note the monetisation of all 1MDB-owned investment fund units.
These significant events represent the continued positive progress made by 1MDB which is nearing the completion of its rationalisation programme” [Statement by Tenku Sariffuddin, Press Secretary to the Prime Minister]
However, there is a deadly admission hidden in plain sight within this ‘settlement’, which Najib Razak has attempted to ignore, but which Tony Pua has spelt out in his reponse:
“1MDB’s concession to the settlement terms is a direct affirmation and confirmation that 1MDB have lost US$3.51 billion worth of payments which have purportedly been paid to IPIC and its subsidiary, Aabar Investments PJS.” [Tony Pua]
After all, the Prime Minister and 1MDB have continued, in the face of all the evidence, to claim that payments totalling $3.5 billion were paid to Aabar/IPIC as a ‘deposit’ to back the supposed guarantees of the Power Purchase loans.
IPIC have replied categorically that they never asked for such payments and never received them.
Last July a US Department of Justice investigation confirmed in a court deposition what everyone had long suspected, which was that the money was in fact paid to a series of bogus off-shore companies with names that made them sound as if they were subsidiaries of Aabar. In particular, Aabar Investments PJS Limited in the BVI, incorporated by the CEO of Aabar and it Chairman, but separate entirely from the Abu Dhabi group.
The DOJ provided a comprehensive money trail, showing how the money went from 1MDB into the fake BVI Aabar account, then on to a company owned by Jho Low called Blackstone Asia. Jho Low then used Blackstone Asia to pay huge kickbacks to the then Chairman and CEO of Aabar for performing that little favour (both those men are now in jail in Abu Dhabi) and divested the rest of the money on a massive spending spree, which included sending US$30 million directly to Najib’s account.
Yet Najib and his 1MDB CEO, Arul Kanda, have simply continued to deny this fact to the Malaysian public. They have claimed throughout this dispute that the money did indeed go to IPIC, which was why they were arguing that IPIC ought to have used it to bail out its debts.
After all, if the US$3.5 billion ‘deposit’ had been paid, why would 1MDB not expect IPIC to make that US$1.2 billion bail out from the money set aside for the purpose? There can be no doubt that if the money had actually been paid, 1MDB would have won that London arbitration battle hands down.
The fact that 1MDB has plainly been unable to satisfy the court proves the money wasn’t paid and Najib is lying. Tony Pua has totted up all the payments the Finance Minister still claims 1MDB made to IPIC, as laid before MPs in the Public Accounts Committee last year:
Which is why many are now laying bets on the likelihood that Najib is going to cut his losses and go for an election BEFORE he has to come up with that hefty US$602 million payment owed to IPIC on July 31st!
The reason being that there is no money to be made from selling 1MDB’s fictional ‘units’ and so in the end that cash is going to have to be raised direct from the taxpayer through his Ministry of Finance, which is ultimately responsible for meeting the commitment.
Once that happens then all the lies and nonsence will be once and for all exposed – and Malaysian’s will be faced with the realisation that Najib will probably have to raise taxes to pay for it all.
Better that comes out in the wake of a hoped-for election win, Najib is reasoning, rather than any time in the run-up to a vote that has to be held latest next year!
“Ministry of Finance doesn’t even itself have that money at the moment, which is why they are buying time. They will have to find it and it will involve bumping up GST or some similar manoeuvre”
One insider has told Sarawak Report.
So, if electioneering has started showing signs around where you live, you have the answer why. The party will be on you the voter and you the taxpayer!