Arul Kanda in a public briefing organized by UMNO at the Putra World Trade Centre in Kuala Lumpur yesterday admitted for the first time that 1MDB overpaid for its power plants.
Actually, it is impossible for him to deny it. 1MDB paid RM12.1 billion to acquire the energy assets, but RM1.19 billion was immediately impaired by the auditors. Now TNB bid for all the assets for only RM8.2 billion.
However, Arul Kanda offered a laughable reason for overpaying. He claimed that 1MDB purposely overpaid in order to reduce tariffs!
I applaud the creativity of Arul Kanda. But perhaps he can enlighten us, how come this ridiculous reason wasn’t never previously cited? Why was there never a single announcement by 1MDB since 2012 to announce the reduction of tariffs? Its only now that 1MDB is forced to dispose of its energy assets that 1MDB is now saying that it overpaid “to reduce tariffs”.
In any event, the reason offered by Arul Kanda is diabolical. Many of the IPP concessions acquired by 1MDB were nearing their expiry in Malaysia, there was no need at all for 1MDB to overpay for these assets. They should be getting them for almost free!
For example, Genting Sanyen which was acquired for RM2.3 billion was only worth about RM400 million in Genting’s books because there was less than 3 years left to the concession agreement. There was absolutely no need for 1MDB to give Genting RM1.9 billion of extraordinary profits so that 1MDB can “help reduce tariffs”!
So we wonder, what was the real reason for overpaying? Was the real reason what was exposed by WSJ – where Kinibiz cited that Genting Group mysteriously contributed an extraordinary RM190 million for “CSR” under its various subsidiaries? Of this CSR expenditure, we know that at least part of it, ie RM41 million, went to Yayasan Rakyat 1Malaysia, which spent the money for elections in 2013. Yayasan Rakyat 1Malaysia lists Dato’ Seri Najib Razak as one of its 2 sole shareholders.
Arul Kanda should stop making up ridiculous stories that makes a complete fool himself thinking Malaysians as idiots. Instead of giving various untenable verbal excuses, he should just come up with documents and proofs to back up his case.