The Minister of Finance informed the Parliament on 11 March that SRC International had invested in “Gobi Coal & Energy Ltd, an energy company based in Mongolia. The investment was made jointly with international investors, with each owning 50%.”
SRC International financial statement for 31 March 2014 had disclosed that RM3.81 billion forms its “investment portfolio outside Malaysia”. The Minister has separately responded on 16 March that the investments were in the “coal and natural resources sector” and that “SRC International conducts its investments directly or via joint ventures with international investors.”
Hence it came as a shock to discover that Gobi Coal & Energy where SRC International invested with funds borrowed from Kumpulan Wang Amanah Persaraan (KWAP) was worth only US$95.7 million (RM354 million)!
This fact was highlighted by the Sarawak Report[i] on 2 April when they discovered another company, Origo Partners Plc, which has also invested in Gobi Coal & Energy. Origo is a closed-end investment company which trades on the London Stock Exchange since 21 December 2006.
In the latest audited report as at 30 June 2014 prepared by Ernst & Young, Origo’s 14% investment in Gobi Coal & Energy was only valued at US$13,394,000.[ii] This means that the total value of the company is only US$95.7 million.
Hence if SRC International did indeed own 50% of Gobi Coal and Energy as disclosed, its shares would be worth only US$47.8 million (RM177 million)!
However, what was even more shocking was the disclosure by the Director of Origo Partners, Niklas Ponnert, to a query, that “Gobi do not disclose the details of its shareholders. What I can say is that the company is principally owned by institutional investors, with Origo being the largest one.”
The statement by the Director of a publicly listed investment firm in London Origo is the largest shareholder in Gobi Goal & Energy proved that the shareholdings of 1MDB in the company cannot be more than 14% and not the 50% as stated by the Minister of Finance in his Parliamentary reply!
This also means that SRC International’s investment holding in Gobi Coal and Energy is worth less than US$13.4 million or RM49.6 million. At RM49.6 million, it is barely a fraction or 1.3% of the RM3.81 billion of SRC International’s “investment portfolio outside Malaysia”.
The question hence arises, where did the rest of SRC International’s RM3.81 billion go when Gobi Coal & Energy was supposed to be its most significant and substantial investment? Why did the Minister of Finance once again lie in Parliament?
This must be the reason why SRC International was hastily sold by its parent company, 1Malaysia Development Bhd (1MDB) to the Ministry of Finance in March 2012. It was clearly intended to cover up the scandal in SRC International which is possibly even worse than the 1MDB PetroSaudi Limited joint venture.
The circumstances around SRC International and 1MDB are perhaps just too similar, coincidental and suspicious to be ignored. Malaysians are extremely concerned because SRC International had secured a RM4 billion Islamic loan from Kumpulan Wang Amanah Persaraan (KWAP) which was guaranteed by the Federal Government.
Malaysia has faced enough of international scandals and embarrassments on its shockingly lack of corporate governance. We do not need another multi-billion ringgit scandal to make us the butt of jokes in the international diplomatic and financial community.