Parliamentary Panel Whitewashes Najib


April 8, 2016

Parliamentary Panel Whitewashes Najib

by John Berthelsen

http://www.asiasentinel.com/politics/malaysia-parliamentary-panel-condemns-1mdb-management/

But steers away from much more serious questions

In sum, while the report on the surface paints a picture of an incompetent management that made a long series of mistakes that ran the fund into the ground, that all has been reported for more than a year by international media and a handful of independent websites – one of which, Malaysia Insider, was blocked and eventually forced to close – it is yet another investigation that does little more than hang a fig leaf on the Prime Minister.–John Berthelsen

The Malaysian Parliament’s Public Accounts Committee (PAC), in a 106-page report today (April 7), found what it said were “significant restrictions and weaknesses” in the scandal-ridden 1Malaysia Development Bhd. Fund, recommending that the government open an investigation into the activities of the Fund’s former CEO, Shahrol Azral Ibahim Halmi.

Shahrol Azral Ibahim Halmi (left) and PAC Chairperson

That looks like it will make Shahrol (above) the scapegoat in a probe that arguably involves many other people up to Prime Minister Najib Razak. While finding plenty of fault, the report itself shied away from much more serious charges of misappropriation of up to US$4 billion and spectacular allegations of money-laundering that are pending in five countries and involve allegations of wrongdoing on the part of JhoTaek Low, the youthful wunderkind who persuaded Najib to take over a Terengganu state investment fund in 2009 and turn it into 1MDB, which is backed by the Malaysian Ministry of Finance.

JhoTaek Low (extreme left) in the company of his Patrons (Najib and Rosmah)

Instead, the committee declared a statement by former Prime Minister Mahathir Mohamad that RM42 billion was missing from the fund to be false, allowing Najib the chance to issue a rejoinder accusing Mahathir of being “motivated by personal interest, not national interest, and a desire to unseat the government.”

 A much stronger report, said to have been produced by the country’s Auditor -General,remains under wraps and subject to Malaysia’s Official Secrets Act, making anyone who reports on its contents liable for prosecution. The Auditor General’s report is said to not only recommend the Board of Directors for prosecution but names Najib himself.

Although Inspector-General of Police Khalid Abu Bakar said the Police would “conduct a detailed and in-depth examination of the Auditor’s report to check if there are any elements warranting investigation and further action,” so far police investigations into matters surrounding 1MDB appear to have been curtailed by political interference.

In particular, a report by the Malaysian Anti-Corruption Commission (now discredited corruption busting agency), said to be ready to recommend prosecution of the prime minister himself for diverting state funds into his own pockets, was derailed and the Attorney_General, Abdul Gani Patail, was retired “for health reasons.” One of the lead prosecutors for the MACC, Kevin Morais, was kidnapped and later found in an oil drum full of cement that had been rolled into a river. His burned car was found in another state.

 A statement from the troubled fund itself said the report “dispelled numerous allegations” about it, saying the board “has successfully steered 1MDB through a uniquely challenging period and trusts that, with the release of the PAC Report, a line has been drawn.”

There were concerns in early 2015 that the government-backed Fund might default, threatening the country’s entire financial system. In May of last year, the Fund began selling off assets, including US$2.3 billion to the subsidiary of a Chinese state-owned enterprise, raising concerns on the part of critics over Chinese government ownership of Malaysian power assets.

While the report seemingly delivers a harsh verdict on 1MDB’s conduct of business, in fact it mostly confirms stories that have been in the press for months. Many were carried by The Edge Media Group owned by Tan Kooi Ong and publisher Ho Kay Tat. After detailed stories appeared on misdoings in the fund, the substance of many of them repeated in the committee’s report the government suspended the publication and its sister publications for three months. A court reversed the order after two months, but The Edge has never really recovered its previous financial and journalistic standing. The government has also blocked more than 30 websites, many of which have reported critically on the scandal, including Sarawak Report and Asia Sentinel.

As widely reported by a variety of publications, particularly Sarawak Report, 1MDB’s troubles began when it formed a joint venture with a mysterious Middle Eastern oil exploration firm called PetroSaudi that seemed to have been brought into existence for the purpose of the joint venture. The management did so without telling the board of directors. As much as US$1 billion disappeared from PetroSaudi, with a significant portion of it believed to have been routed into entities backed by Jho Taek Low, a pudgy Penang-born financier who subsequently exploded into New York’s café society, buying magnums of champagne for a coterie of blondes.

 The Flamboyant Jho Taek Low

“The 1MDB Board of Directors was not briefed clearly regarding the project partner and its relation between three companies – PetroSaudi International Ltd (Saudi), PetroSaudi Holdings (Cayman) Ltd and PetroSaudi International (Cayman),” it said. “The Board of Directors gave conditional approval to the management of 1MDB to carry out the effort with PetroSaudi International Ltd, but the actual deal was signed with PetroSaudi Holdings (Cayman) Ltd without the informing the 1MDB Board regarding the change of the project partner,” it said.

 1MDB PetroSaudi Ltd, which was later made into a joint venture company, was registered much earlier by PetroSaudi Holdings (Cayman) Ltd on September 18, 2009, eight days before the approval of the Board of Directors on September 26.

 The Board was also not informed that 1MDB PetroSaudi Ltd had been established on the day that the first proposal was brought to the board. “This shows that the management of 1MDB had decided to work with PetroSaudi International Ltd earlier without informing the board of directors,” the report said.

It said that the Board was also not informed that there was a clause in the joint venture agreement stating that 1MDB PetroSaudi Ltd had to pay a US$700 million (RM2.73 billion)

A loan from its parent company PetroSaudi Holdings (Cayman) Ltd on or before September 30, two days before the agreement was signed. Approval was also not given by the Board to pay the US$700 million loan from the US$1billion in investments that had been channeled into accounts owned by other companies, presumably those controlled by Jho Low, as he is universally known.

In sum, while the report on the surface paints a picture of an incompetent management that made a long series of mistakes that ran the fund into the ground, that all has been reported for more than a year by international media and a handful of independent websites – one of which, Malaysia Insider, was blocked and eventually forced to close – it is yet another investigation that does little more than hang a fig leaf on the Prime Minister.

23 thoughts on “Parliamentary Panel Whitewashes Najib

  1. It is a report that insults the intelligence of Malaysians.

    An incompetent management in a government-controlled corporation will not be able to blow away RM42 billion without blessing from the top. Jho Low’s fingerprints are all over this deal. Critical questions are still not being answered.

    And from what has been reported, this is not only an incompetent management but there are serious signs of crime being committed.

    I am disappointed with the likes of PAC member, Tan Seng Giaw whose purported statement that Najib was not involved. He has never proferred any sensible analysis of the matter throughout (unlike Tony Pua), so what’s his basis for saying so? Just because the 1MDB fellas that were interviewed said so? It will be a stupid conclusion by this PAC member, if he does not use his brains to corroborate and analyse information from various sources.

    But Najib and his band of T’s will go to town and sing that they are innocent. Malaysians (like me) will whined about this. Tomorrow, it will be business as usual …..

  2. The PAC Report has confirmed what has been common knowledge among the rakyat and in many countries around the world wherever 1MDB has been subject of investigations and published in the local and foreign media.

    It was probably concluded by all that none of those in power and perceived to be responsible may be held liable and that some one may be made a scapegoat. This assumption has now been confirmed with the call and recommending that the government open an investigation into the activities of the Fund’s former CEO, Shahrol Azral Ibahim Halmi.

    A much stronger report, said to have been produced by the country’s Auditor -General,remains under wraps and subject to Malaysia’s Official Secrets Act, making anyone who reports on its contents liable for prosecution. Consequently the suspicion that others in power may also be involved may confirm that others may be involved as long as the Aud-Gen Report remains ‘SECRET’,
    What is being made public may be what may ‘protect’ some of those involved and holding positions of authority.

    Statement said that the 1MDB Board of Directors was not briefed clearly regarding the project partner and its relation between three companies. The actual deal signed without informing the 1MDB Board and then going against it indicates that the Board may have been without any authority or powers. Further if the Board did not pursue subsequently or take any action may indicate that either the Board members were without relevant expertise or may have been just ‘rubber stamps’.
    This may indicate that the Board members were negligent and may not have discharged their duties as expected of them and thus it may be appropriate to charge them for possible ‘dereliction’ of fiduciary duties even though their appointment would have been made based on their expertise and professionalism and may have been remunerated handsomely.

    It may not be fair or just to put the total blame on the the former CEO but his bosses who are the Board members should take some responsibility and investigated instead of just being let off. Similarly the Report also highlighted several Management and other weaknesses for whom those who drafted the laws, procedures, systems, should also take responsibility for having allowed it to continue for years.
    Credibility of the Investigators and those giving out the conclusions on the findings
    may be perceived to be suspect not only locally [to which the locals are used to] but also the international authorities who may not forget soon.
    THE MAIN VICTIM OF THIS EPISODE MAY BE RAKYAT AND THE COUNTRY

  3. Can we talk about Brave New World? Even Zahid Ibrahim suggested something to this effect?

    //for this to be effective they must select one of them to be the leader. They need to join other non-political forces waiting to be called, eager to save the country. But they need to have a leader. Can they gather in a room, like the Catholic Cardinals do in Rome to select a new Pope, and not leave until a new leader is found?

    We need a Francis of Brave New World.

  4. The PAC should have simply stated. Najib is a THIEF and poor liar, worst he corrupts even more people including Hadi Awang and his PAS. Period.

    Nothing Najib does can make it up EVER.

  5. What exactly did you fellas expect from PAC?
    Nothing substantive will come out of it, as long as UMNOb remains. Their new motto should be: “Dhobi Best! Cuci! Semua Cuci!”

    Now they’ll just abandon the 1MDB thingy and pretend they remain the Lords of the Universe.

    Their damage control is simple – to hope all the angst will blow away before GE-14. Mudah Lupa and all that. So now all you gentlefolk have to do, is wait for the International Probes to conclude. The Swiss have started the avalanche. But they are partial to suppositories and pessaries.

    Do you think the UMNOb flakes will protest by collectively trashing their jeweled Swiss watches? Starting with the Shahrol flur? Nah..

  6. …and who has the “absolute discretion” on whether Shahrol or any one else in or outside 1MDB be prosecuted or not even if a ton of evidence is unearthed? The AG of course.

    So back to square one. Najib must be laughing his ass out.

    We still need to depend on the orang putih to do our dirty work for us.

  7. I would like to comment on steady progress versus revolution.

    What is written above by John Berthelsen represents attitude and mindset of Western liberals. His attitude and assumption are that not only justice is universal, but the law-enforcement in preserving the justice is universal and rightfully taken for granted.

    That is why John Berthelsen keeps focusing on ultimate goal of bringing down Najib’s for his alleged corruption, while he simply dismisses all Najib’s accomplices as scapegoats and insignificant wrong-doers. He is on moral high horse, and he wears the badge of revolution posed as fighting corruption. He cares little on nation’s capability of law-enforcement and delves in the insanity of prosecuting crimes through public opinion.

    But, all developed nations’ people are more circumspect in removing the head of states. In the case the head of state does not want to resign on his own, his opposition will encircle the head of state by prosecuting his accomplices so that his political standing is weakened. Once he is weakened, the election or parliamentary vote could be used to remove the head of state in a steady and constitutional way.

    We need not just one Rosli Dahlan, but 10,000 Rosli Dhalan’s, in order to have a functioning legal and law-enforcement environment. We can do better without rootless Western liberals such as John Berthelsen.

  8. If u tell the kindergarden children 1+1=3, what respond u get, try yourself. Stupid one, I don’ t know. Stupid n idiot, yes, yes.

  9. It is funny that Shahrol, a Malay has to take the fall. Isn’t it much simpler to blame everything on an obese Chinese boy called JhoLow?
    _________________
    The reason is that Jho Low knows how take care of Queen Rosie.But it is a matter before the long arm of Law gets to him. –Din Merican

  10. Yes there is a white wash but the remarkable thing is of what? The simple minded folks are given so much run around, they can’ t pinpoint in clear black and white what the big fuss is.

    Bottom line is even with white wash, Najib is guilty of either failing his fiduciary duties and/ or CBT or he is thief and bad liar. He is required to resign. It’s the most ridiculous thing and opposition has failed to point it out going after the political blockbuster of the theft and breaking of institutions.

    Najib is guilty of all things, failing his job, CBT, theft, destroying institution. The confusion by simpletons are the feeling of not having law and order. In reality there is chaos, only Unrealised by sheer fear of brute force.

  11. //The reason is that Jho Low knows how take care of Queen Rosie.But it is a matter before the long arm of Law gets to him. –Din Merican

    Jho Low can get inspiration from DiCaprio to play real life ‘Catch me if you can’ now after playing a round of ‘Wolf of Wall Street’ (^_^)

    Queen Rosie need to have dreams like Queen Imelda. Poor King Najib.

  12. Was there any comment by anyone on the reported case of Public lands being given at RM140 psf which was said to have been sold at over RM3K psf? The profit would have been a few billions. So how were these billions used and how did they benefit the rakyat?
    What about the subsidiaries-associates-joint ventures incorporated in foreign countries including some ‘tax havens’, if any? Did any Audit Committee member ever visit those countries for official duties or just had blind trust of the professionals and Management. Most are reported to just visit countries like US-UK-Switzerland-Middle East [and visit the Holy Places on the way]-Australia, etc. in the name of attending international functions to get information about world economic future prospects and thus assist in planning.
    It is a common perception that most Audit Committee Members of most organizations may have little knowledge about the core activities of the organizations whose operations or activities they are charged to review.
    The emphasis is generally on financial aspects and their compliance to approved standards which to some extent may provide opportunities for mismanagement- fraud-corruption and an example would be reported value of real estate in financial statements may be reported on historical cost or current value and this is at the discretion of the Management and no info is provided the financial implications/risk of the two options to the interest of the shareholders. Similarly the Standards do not require reporting individual results of the subsidiaries-associates-joint ventures and thus provide covering of losses of some against the profits of others. Similarly the RM equity participation is not disclosed in most cases but disclosed in percentages thus not being transparent in disclosing the financial implications to investors of potential losses in case of any of the subsidiaries-associates-joint ventures were to go ‘under’.
    [Above views based also on personal observations, responses received from Directors during AGM/EGM of listed companies since 2001 and discussions with professionals/directors.]

  13. 1MDB is now making no sense comparing Parliamentary work to binary pregnancy. 1MDB and Arul Kanda reeks REEKS of hired mercenary, snake oil salesman.

    If Tony Pua is suppose to agree 100% or not with PAC report, how much the Rakyat is the one feeling raped?

  14. @bigjoe99 good analogy with rape. My jaw dropped when reading the analogy of 80% pregnant. That shows the state of mind of these 1MDB folks. Wolf of Wall St clearly shows the mindset of our 1PM cronies.

    if i were tony pua, i would say report only shows how 80% of the rakyat got raped. The main culprit and the most egregious 20% have been left out from the PAC report.

  15. /// Shiou April 8, 2016 at 11:57 pm
    I would like to comment on steady progress versus revolution.

    What is written above by John Berthelsen represents attitude and mindset of Western liberals. His attitude and assumption are that not only justice is universal, but the law-enforcement in preserving the justice is universal and rightfully taken for granted. ///

    Why only Western liberals have such attitude and mindset? Justice as a value is universal. It is only in tin-pot country that the law-enforcement in preserving justice is not there. Yes, justice and the enforcement of it should be taken for granted – this is universally yearned for. But again, its absence in Malaysia is because of people who still want steady progress – steady progress to perdition.

    Yes, the peasants are revolting; they are disgusting too.

  16. It was reported that the Public Accounts Committee [‘PAC’] had declared in its final report released today that ‘1MDB’ Board Of Directors [‘BOD’] had failed to ensure the fund’s management complied with good accounting practices and suggested that there was an apparent negligence on the part of the ‘BOD’ should be blamed for the management’s decisions that led to the fund amassing a debt pile of RM42 billion in just five years. Further it was also stated that the ‘BOD’ had failed to perform its responsibility to protect the interests of the company and shareholders and that it failed to take proactive or necessary measures to scrutinize and supervise the management’s activities and cash flow although supervision by the ‘BOD’ was absolutely necessary especially on the matter of asset prices and debt pile. [Mail Mail dated 7.4.16].

    ‘BOD’/‘AC’ members are normally composed of highly qualified, experienced, knowledgeable, titled and include senior retired government employee or politicians or those connected to the ‘powers’ or nominees of those with vested interest in the company. This leads to the perception that they being prominent members of the society will bring along values that would include honesty, integrity, high ethical standards. Another possible weakness in the local corporate sector that some ‘BOD’ members may have multiple directorships besides other interests and thus may not be able to discharge their expected duties towards the Company to which they may be appointed as Directors. This weakness was recently commented upon by a Singaporean who offered suggestions which included retiring of overworked directors as some of them had multiple directorships and the busiest directors appeared to be more distracted than their counterparts in US and Europe. The national average of the most thinly stretched directors at large Singapore Companies is 4.6 additional Board duties.’ [Acknowledgement: Edge Singapore].

    The ‘PAC’ findings and the local culture gives the perception that some ‘BOD’ accept Directorships more for the financial rewards and the high perks that they can enjoy at the expense of the Companies even when they may not have the time or relevant expertise to make any meaningful contribution to the Company. In the case of ‘1MDB’ the ‘PAC’ Report also revealed that the ‘BOD’ members could have been aware that they and the Single Owner Shareholder had no control or authority on its operations of and thus all including the ‘BOD’/’AC’/’EA’/’IA’ may have been emasculated by Article 117 of its Memorandum and Articles of Association and their positions may have been there just for ‘cosmetic’ purposes as all could be ignored and bypassed by the ‘CEO’ who dealt directly with the named Political Leadership of the Country. [The Edge Malaysia 11.4.16].

    The fact that the suspected MISMANAGEMENT was allowed to continue for over six years gives credence to the perception that neither the Single Owner Shareholder nor any of the Members in the ‘BOD’/’AC’ or ’EA’/’IA’ may have discharged their duties as expected of them by not only the public but also by their own Professional Organizations or Code of Ethics and Integrity Pledges which some of them may have made.

    It is fair to ask whether those involved in ‘1MDB’ are being honest in collecting/keeping the High Fees/Salaries/Perks for over six years as it was their possible failure to perform that allowed the MISMANAGEMENT to continue for all the years.

    WILL THE AUTHORITIES MAKE PUBLIC THE RECIPIENTS OF FEES/SALARIES/PERKS AND THE QUANTUM THEY RECEIVED DURING THEIR TENURE OF SERVICE? The TI-M president also raised concerns over corporate governance issues raised in the PAC report on 1MDB and stated that ‘Further probes needed or ‘1MDB’ ghost will never be laid to rest’. He further stated that ‘Let the right, independent and professional people finish the job’ but then he has not suggested as to where to get such professionals as all those involved in the MISMANAGEMENT and also the INVESTIGATIONS to-date have been ‘PROFESSIONALS’?

    YB Tan Sri Ramon concluded in his letter published [in the Star dated 12.4.16] in response to the KSN’s recent decision which is being implemented by the PSD’s DG and publicly announced that ’50 civil servants holding “sensitive posts” will be transferred within a week and that this exercise would be “ongoing” with a question: Have the Federal and state governments got the political will to do this? Is there a strong enough political will to reform so that our beloved Malaysia can move forward with integrity and pride?. The question is relevant to ‘1MDB’ as those in positions of authority include current and some retired Senior Civil Servants. Further the silence of CUEPACS is deafening to say the least.

    If the way the cases of suspected MISMANAGEMENT OF PUBLIC FUNDS as reported in the

    REPORTS OF THE AUDITOR GENERAL for over THREE DECADES is anything to go by then it may be safe to assume that

    ‘1MDB’ will also soon be forgotten and

    CULTURE OF MISMANAGEMENT-FRAUD-CORRUPTION-BRIBERY-KICKBACKS will continue and the suspects if any is ever identified and action if any is ever taken or penalties if ever imposed may still be free to continue to enjoy their ill-gotten gains as some may have been able to reserve seats in heaven to enable them to continue to enjoy lifestyles there to which they are accustomed to in their life styles.

    [Note: The last view may be common in many countries including perceived developed countries. Refer to internet web-sites including fraud surveys and by using the words ‘corruption’/’fraud’ and others]

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