1MDB proudly announced that they had made their final US$602.7 million or RM2.4 billion settlement payment to Abu Dhabi’s International Petroleum Company (IPIC) on 27 December, four days ahead of their deadline.
The problem is, we all know 1MDB is completely insolvent. So Malaysians are rightly concerned as to how 1MDB paid its latest instalment of their debt. All that is stated in the official 1MDB statement is that the payment is funded through its “on-going rationalisation programme”.
No one of course, has a clue as to what the “rationalisation programme” entails.
What is more interesting is the carefully planted leaks to The Singapore Straits Times (SST) to reveal that the funds to repay IPIC came from the sale of investments in financial instruments and stakes held in two 1MDB-related entities that own tracts of land in Penang and Pulau Indah, Selangor. The report merely identified the anonymous buyers as “concerns ultimately controlled by Chinese state-owned enterprises”.
This is not the first time SST had carried out a hatchet stories which helped cover up some of the 1MDB’s financial shenanigans. When the Bandar Malaysia sale to an Iskandar Waterfront-led consortium was terminated out-of-the-blue by the Ministry of Finance, it was SST which created a media maelstorm by reporting on 9 May 2017 that “Government officials and financial executives close to the situation told The Straits Times that negotiations with the Dalian Wanda Group to take a central role as master developer have reached an advanced stage…”
“Malaysian government officials noted that the new deal would be substantially higher than the previous RM12.3 billion valuation tag for the entire project. According to financial executives familiar with ongoing talks, Wanda has proposed to use half of the development for tourism and entertainment-related ventures valued at roughly US$8 billion,” the Singapore paper added.
The above proved to be a hoax of course, because when Dato’ Seri Najib Razak met Wanda a week later, he came home empty-handed – without even a face-saving “Memorandum of Understanding (MOU)” signed.
The current SST report is similarly couched in the same language. SST claimed that “Malaysian government officials declined to identify the buyers in the real estate transactions but one financial executive close to the situation said that the equity interests in the 1MDB real estate entities were acquired by “concerns ultimately controlled by Chinese state-owned enterprises”. The executive declined to elaborate.”
The SST report was inevitably picked up by nearly all local media outfits. This clearly served the interest of 1MDB which would want to avoid prickly questions on how they found the funds to repay IPIC.
The question really is, if 1MDB has really succeeded in disposing of its controversial properties in Pulau Indah and Penang to China-owned state enterprises, why is there absolute silence from official sources? Dato’ Seri Najib Razak and 1MDB would have been carrying out victory parades for proving their critics wrong, as they did in the past.
Surely if the companies owning these parcels of land were sold for billions of ringgit to foreign investors, from China or otherwise, official transactions would have taken place and the information would be publicly available.
More curiously, these parcels of land in Selangor and Penang were purchased by 1MDB for RM294 million and RM1.1 billion respectively. Critics were aplenty in citing that both parcels were purchased at inflated prices. However, even so, the combined purchase amounted to less than RM1.4 billion.
Hence if the SST report were to be true, then it begs the question as to which Chinese state-owned enterprises would pay an outrageous RM2.4 billion for these parcels, which in-turn allowed 1MDB to repay its second loan instalment to IPIC? Or is it more likely that it is another hoax to evade disclosing the fact that it was really the Ministry of Finance, which directly or indirectly, repaid both instalments amounting to US$1.24 billion to IPIC?