The Hyenas, Vultures and Maggots of 1MDB


August 23, 2016

The Hyenas, Vultures and Maggots of 1MDB

by Dr. M. Bakri Musa, Morgan-Hill, California

1MDB is not yet a bloated carcass (it is bloated only with debt) and already the hyenas, vultures and maggots are feasting with glee. In the wild, hyenas and vultures wait till their prey is dead, and maggots, rotting. Not these human hyenas, vultures and maggots.

Scavengers are vital in the ecosystem; they cleanse the environment of dead and decomposing bodies. In contrast, these human hyenas, vultures and maggots feasting on 1MDB are part of the rubbish. Perverse as it may seem, they have an exalted opinion of themselves. They view what they are doing–defending “Malaysian Official 1” who is related to one of the hyenas Riza Aziz–as honorable.

This 1MDB mess is humungous; it will burden Malaysians for generations. That is a grim and undeniable fact.Other facts, also undeniable, include these. One, 1MDB’s debt in excess of RM42 billion, and growing fast, exceeds the current budgetary allocation for education. No other entity, private or public, then or now could come even close. Those loans are ultimately the responsibility of taxpayers as well as those who do not pay tax. Those non-taxpayers, meaning the poor, are impacted because funds meant for them would be diverted to servicing those debts.

Two, 1MDB has gone through as many accounting firms as Britney Spears with boyfriends.  Its latest, Deloitte, has resigned, but not before making a most unusual declaration. That is, the US Department of Justice’s June 20, 2016 asset forfeiture lawsuit contained information that, if known at the time of the 2013 and 2014 audits “would have impacted the financial statements and affected the audit reports.”

The Carmas in the Malaysian Civil Service

“…these human hyenas, vultures and maggots feasting on 1MDB are part of the rubbish“–M. Bakri Musa

Along the same vein, the Auditor-General’s Report on 1MDB which the government had promised to make public is now under the Official Secrets Act. Those reports have always been public. Why keep this one secret?

Three, 1MDB has gone through as many chief executives in as many years, not the sign of a well-managed company. Four, drive by the site of the proposed Tun Razak Exchange, 1MDB’s signature development. It is empty. Last, 1MDB has yet to generate a sen of profit despite being in existence since 2009.

Meanwhile Switzerland has forced the sale of the bank involved with 1MDB and imposed an unusual and tough stipulation. Its new owner must not employ any of the existing senior managers of the sold bank. Singapore summarily closed the local branch of that bank. Its head now faces criminal charges. He was denied bail while awaiting trial, reflecting the gravity of the alleged crime. Singapore admitted to being lax in monitoring the bank’s activities with respect to 1MDB. Singapore also froze the assets of Jho Low, Najib’s financial confidant and key 1MDB player, an unprecedented as well as severe action.

There are other facts. The Attorney-General and Bank Negara have closed their investigations with no negative findings. Then there are the American DOJ’s asset forfeiture lawsuits and the class-action suit of Husam and Chang.

In America anyone can file a lawsuit. Thus you may dismiss the American lawsuits but not the actions of the Swiss and Singaporean authorities. As for the Attorney-General and Bank Negara Governor exonerating 1MDB, I let readers give that its proper weightage and relevance. Nonetheless that would still not explain 1MDB’s huge debts, changes in management and auditing firms, empty TRX lot, and the Auditor-General Report being kept secret.

For those who believe that Najib is God’s gift to Malaysians, you can’t argue with them. It would also be blasphemous to dispute Allah’s choice. For the rest of us, we need a more rational explanation, one that does not assault credibility or insult intelligence.

Back to the hyenas, they are now uncharacteristically quiet, their former flamboyance gone. Perhaps they are enjoying their morsels while they can, in their penthouses of Manhattan, mansions of Beverly Hills, and luxury yachts cruising the South China Sea. One would expect that having benefited handsomely from 1MDB they would harbor some gratitude to defend their benefactor.

The vast majority of Najib’s supporters are simple, unsophisticated Malay villagers still under the grip of feudalism. To them it is a simplistic “my leader, my race, my country, right or wrong!” Their loyalty to leaders is intense and unquestioning, up to a point. Betray that, and you pay the price. Datuk Onn was a hero for stopping Malayan Union, and Tunku Abdul Rahman for bringing merdeka. When they fell out of step with their followers, their drop from hero to villain was precipitous and merciless. Najib is nowhere near the caliber of those two giants. We must remind him and his ardent supporters of that.

Those villagers aside, only those vultures and maggots remain Najib’s supporters. The hyenas should be, but for reasons best known to themselves have chosen to remain silent. That leaves the vultures to be his noisiest and ugliest cheerleaders. Unlike the hyenas with their bounties in the millions, those vultures are satisfied with a promotion or two and a federal award (second or third class) thrown in. Satisfied because stripped of their new appointments, they would earn but a mere fraction back at their old law practices or whatever they did before prostituting themselves to Najib.

The maggots are there as long as there is a decaying carcass. A few ringgit tossed their way to fill the tanks of their used motorbikes, and they are happy parading their red shirts or polluting the social media with their inane comments. Once the carrion is gone, so will they.

Some support Najib out of inertia, buttressed by the havoc of regime change in Iraq and Libya as well as the performance of the opposition. Others reflect the forbearance of Malaysians. Najib, they rationalize, won the last election albeit without the majority of the popular votes. Nonetheless that victory was reaffirmed by the recent state elections in Sarawak as well as the two by-elections in Peninsula Malaysia.

That is a dicey defense. Winning elections is no license to steal or be corrupt. Nixon won a landslide in 1972, yet that did not stop his impeachment and subsequent resignation in disgrace for covering up the Watergate break-in.

A few would argue that Najib’s shenanigans are no different from Mahathir’s many opaque UMNO proxy companies plus London Tin, Maminco, Bank Bumiputra, and Forex debacles. To them 1MDB is merely a different crocodile, albeit much more menacing, but from the same fetid swamp. Malaysia will never progress with that attitude.

Then there is the reflected glory argument. Riza Aziz, Malaysian Official 1’s stepson, is one of the producers of the Academy Award-winning The Wolf of Wall Street. Most would miss the irony as the film is banned in Malaysia. Nonetheless Malays in particular should celebrate that achievement.

Malaysians would have, and proudly too, had the film not been tainted. Indeed, the Academy publicly demanded that Riza Aziz’s name be officially deleted. It is like winning at the Olympics, and later disqualified for doping. Instead of glory, shame.

Another aspect of Najib’s support is crude anti-American rage triggered by the DOJ’s lawsuit. That was seen as interference as well as double standards. America too is blighted with corruption, they sniff. True. But as South Korean Tongsun Park and Indonesian James Riady, as well as former Attorney-General Mitchell and President’s Counsel John Dean found out, the corrupt do get caught, convicted, and jailed. That’s the lesson Malaysians should draw from America.

As for American interference, if Najib and other corrupt Third World leaders do not want that, then next time accept only Zimbabwean dollars and use a bank in Uzbekistan. Buy properties in Bali or Cancun, not Manhattan or Beverly Hills, and bet at casinos in Macau not Las Vegas. There are no shortages of hyenas, vultures and maggots in those countries to clean up your mess.

Rosmah Mansor and her Jewellery, courtesy Jho Low


August 20, 2016

Sarawak Report: Rosmah Mansor and her Jewellery, courtesy Jho Low

Last month’s filing by the US Department of Justice confirmed the money trail, which had long been suggested by Sarawak Report, linking Jho Low’s mysterious role in funding the ‘First Lady’s’ obsessive diamond shopping with money he stole from 1MDB.

Our research in Hong Kong, a favourite jewellery haunt of Rosmah Mansor’s, revealed that by 2009 most of the money to settle Rosmah’s bills was coming via Jho Low.

Insiders from the industry explained to SR that the original ‘link man’ between traders and  Rosmah was the former Malaysian carpet trader Deepak Jaikishan, something that has been extensively exposed and admitted to by Deepak also.

However, in 2009, after Najib became Prime Minister and set about putting together 1MDB, it was Jho Low who started organising such payments, traders say.

He was the man to go to and emails seen by Sarawak Report confirm that he utilised his relationship managers at Coutts Bank Singapore for the purpose, including Yak Yew Chee, who moved on to manage the corrupt 1MDB/Jho Low accounts currently being investigated at the now closed Singapore branch of BSI Bank.

Yak organised transfers for jewellery purchases for Low

Yak organised transfers for jewellery purchases for Low in 2009

Sarawak Report earlier revealed how Jho Low’s company Batumba Investments Limited Hong Kong, which was a subsidiary of his then main business Wynton Capital, paid millions of dollars to a subsidiary of the New York jeweller Louis Glick called Rose Trading in Hong Kong to pay for Rosmah’s diamonds.

Transfer details of one of the payments sent to the relevant dealers

Transfer details of one of the payments sent to the relevant dealers

A related email from Jho Low ran ““Hi….please confirm receiving 1 million in total.. Datin is coming to Hong Kong. Do you want to show her more goods?”.

The transfers were run through Coutts as emails seen by Sarawak Report confirm:

Fwd Payment advice to Rose Trading USD1,000,000
From: Lee Julia (RBS Coutts, SG)
To:  jho.low@gmail.com

Dear Mr Low,

Thanks
Julia Lee (attachment)

Speaking to traders again last week Sarawak Report has confirmed that in late 2009 the series of purchases from Rose Trading had amounted to no less than $3 million.  They added that another $1.7 million was paid to another Hong Kong jewellery outlet called   Firestone.

DOJ confirm the 1MDB link

However, it was the DOJ filing last month which tied these purchases directly to money taken from 1MDB via the theft by Jho Low’s company Good Star Limited from the original ‘joint venture’ with the company PetroSaudi.

Amongst a bacchanal of expenditures towards Jho Low’s gambling and partying was listed that telling payment to Rose Trading:

“between October 2009 and October 2010, misappropriated 1MDB funds sent from the Good Star Account into the Shearman IOLA Account were transferred as follows: (i) approximately $12,000,000 in wires to Caesars Palace, a Las Vegas casino; (ii) approximately $13,400,000 in wires to the Las Vegas Sands Corp., the owner of the Venetian Las Vegas, another casino; (iii) a wire for approximately $11,000,000 to “Eric” TAN Kim Loong, an associate of LOW; (iv) approximately $4,000,000 in wires to Jet Logic Ltd., a luxury jet rental service; (v) a wire for approximately $3,500,000 to LOW’s sister; (vi) a wire for approximately $3,080,000 to Rose Trading, a Hong Kong jeweler; (vii) approximately $2,698,000 in wires to Yachtzoo, a luxury yacht rental service; (viii) approximately $2,288,000 in wires to Argent Design Ltd., a United Kingdom-based interior designer; (ix) a wire for approximately $670,000 to Excel Air, a jet rental company; (x) approximately $460,000 in wires to Skyline Private Air, an aircraft rental company; and (xi) a wire for approximately $155,000 to Billiyon Air, a jet rental company. [Section 108 DOJ Report]

From this information we can now join up how the 1MDB ‘investment’ went from Good Star Limited, first to Low’s US lawyer’s client account at Shearman, then eventually to Batumba Investments Limited and then on to Rose Trading.

“He should remember it’s my money too!”

The confirmation that Rosmah’s diamonds were bought using 1MDB cash, follows hard on the heels of ourearlier story that she paid for millions of ringgit of beauty treatments also from public money stolen from the 1MDB subsidiary SRC International, which had been funded from a loan from the public pension fund KWAP.

At the time stories about Jho Low’s gargantuan spending were hitting the news in the US and Malaysia. One confidante of the time has related that Rosmah had exploded on reading some of the coverage:

“He should remember its my money also!”

the First Lady angrily exclaimed.  At the time her listeners were not certain as to what she had meant.  But, now everyone knows!

$600 million yacht for sale – discounts likely

Major re-fit before sale in Hong Kong?

Major re-fit before sale in Hong Kong?

Meanwhile, the Hong Kong press have taken up Sarawak Report’s information that the yacht Equanimity is in the port and on offer for sale.

The South China Morning Post confirms that the boat has had a major re-fit in their docks and that a local agent has been engaged with a view to an apparent sale.

All parties say they have been forced to sign non-disclosure agreements, but have indicated that the ‘mystery owner’ of the yacht is eager for a quick sale.

Although Jho Low has treated the yacht as his own ever since he acquired it in 2013, hosting a massive party to celebrate his own birthday back in November together with a fundraiser for the UN foundation, Sarawak Report asks if perhaps the actual ownership of the boat is also a little more complex than might first appear?

That the money came from funds stolen from Malaysia can be of little doubt however and the boat ought by rights to be seized and sold by investigators in Hong Kong, who have stated that they are working together with the DOJ and other global agencies who have been working to retrieve 1MDB’s stolen assets on behalf of the Malaysian people.

It’s a job that Malaysia’s own government has been notably failing to undertake itself.

Off the coast in Hong Kong

Off the coast in Hong Kong

SARAWAK REPORT

 

1MDB Highlights Need For Institutional Reform of State’s Role in Business


August 16, 2016

1MDB Highlights Need For Institutional Reform of State’s Role in Business

by  Teck Chi Wong
1MDB Highlights Need For Institutional Reform of State’s Role in Business

Malaysia has a long history of high-level financial scandals, some of them involving the country’s government-linked companies (GLCs). Yet, the recent case of 1MDB is particularly shocking. This is the first time that its sitting Prime Minister ( pic above) is directly implicated.

The 1Malaysia Development Berhad (1MDB) scandal in Malaysia which has recently become the subject of a high-profile lawsuit by the United States Department of Justice’s asset recovery initiative highlights the problems with state-ownership in the Malaysian economy. To prevent such scandals from recurring in the future Malaysia must define the role of the government in business and develop adequate institutional arrangements to counter potential abuse by politicians.

Malaysia has a long history of high-level financial scandals, some of them involving the country’s government-linked companies (GLCs). Yet, the recent case of 1MDB is particularly shocking. This is the first time that its sitting Prime Minister is directly implicated.

Prime Minister Najib Razak has vehemently denied the allegations and claimed that the money was a ‘donation’ from the Saudi Royal Family. But the investigation by the US Department of Justice

Research into state ownership has long argued that GLCs are vulnerable to the problems of politicisation, corruption, and rent-seeking, which can cause them to be inefficient and mired in scandal. In Malaysia, GLCs have been used as a tool for politicians to direct benefits to their political supporters or even themselves.

Syed Ali Alhabshee–Jangan bohong dan Tembak Lah

The case of 1MDB illustrates the problem. It is alleged a total of US$7 billion of funds has gone missing. A majority of the misappropriated funds has allegedly flowed to offshore companies. It is also suspected that some of these funds were used to support the ruling coalition’s campaign in the 2013 Malaysia General Election.

The concerns only erupted into a scandal in 2015 when the issue was raised by former Prime Minister Mahathir Mohamad in an internal party fight with Najib. Hundreds of thousands of people then went into the streets to protest, but Najib has so far successfully resisted the call for him to step down. He has also strengthened his position by sacking critics and the attorney general from his government. He was later cleared of any wrongdoing by the new attorney general.

Excessive State Influence in Business

Malaysia has a long history of high-level financial scandals, but this is the first time a sitting prime minister is directly implicated. Some $7 billion of funds has gone missing from 1MDB. The failure of institutional safeguards to prevent or take action against such irregularities points to major deficiencies within Malaysia’s governance of GLCs.

The failure of institutional safeguards to prevent or take action against such irregularities points to major deficiencies within Malaysia’s governance of GLCs. Six decades of rule by the United Malays National Organisation (UMNO), the main ruling party in Malaysia, has undermined Malaysia’s democratic institutions. There are now no effective institutional checks and balances on the handling of GLCs by the state and politicians.

Underlying the 1MDB scandal is the problem of excessive state influence in business. It is estimated that GLCs account for approximately 36 per cent of the market capitalisation of Bursa Malaysia and 54 per cent of the benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBMKLCI). GLCs do not only participate in natural monopolies or strategic industries, but compete with the private sector in highly lucrative businesses such as retail, construction and property development.

In the case of 1MDB, the state-owned investment company also has a huge involvement in property development, through the projects of Tun Razak Exchange (TRX) and Bandar 1Malaysia. These projects were particularly controversial because the land was sold to 1MDB at a very low price by the government. Critics argued that the land should instead have been auctioned publicly and that the projects could be handled more effectively and efficiently by private companies.

Although the government embarked on a GLC transformation program in 2004 and committed to divest their non-core holdings and non-competitive assets in 2010, its influence in Malaysian business has never really faded. On the contrary, as argued by Malaysian economist Dr. Edmund Terence Gomez, there is increasingly an ‘extreme concentration of powers by the executive’. To prevent future scandals Malaysia should curb the excessive role of the state in business and put in place institutional mechanisms that subject politicians to proper checks and balances.

There are increasing discussions at a global level, particularly by the Organisation for Economic Co-operation and Development (OECD), regarding which institutional governance frameworks can best regulate the state in its handling of GLCs while also improving their performance and accountability.

Malaysia should consider adopting the OECD guidelines on corporate governance of state-owned enterprises (SOEs) to benchmark itself against the world’s best practices. The guidelines recommend a clear separation between the state’s ownership function and regulatory function, which is currently lacking, particularly in the 1MDB case where the prime minister is the ultimate decision-maker.

Both the state and GLCs must also observe a higher standard of transparency. A clear and consistent ownership policy should be established to define the overall objective of state ownership and the state’s role in corporate governance. This move must also be complemented by wider reform in Malaysia’s democratic system. The problem goes beyond the current prime minister. Lasting reform will require ensuring free and fair elections and a true separation of powers between executive, legislative and judiciary branches as well as strengthening the independence of key institutions, including the central bank and the Attorney- General’s Office.

Comprehensive institutional reform is necessary to restore public confidence. But this process is expected to be difficult given the deep influence that the ruling party holds within the different branches of government.

This article was written by Teck Chi Wong,  a Masters student at the Crawford School of Public Policy at the Australian National University (ANU). It first appeared on East Asia Forum under a Creative Common license and is produced  here with its  permission.

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Riza Aziz Facing Malaysians in Racketeering Lawsuit


August 14, 2016

‘Wolf of Wall Street’ Financier Red Granite Now Facing Malaysians in Racketeering Lawsuit

by Eriq Gardner

http://www.hollywoodreporter.com/thr-esq/wolf-wall-street-financier-red-919160

A putative class action alleges that Riza Aziz and Joey McFarland knew the company's money was derived from illegal activity.

A putative class action alleges that Riza Aziz and Joey McFarland knew the company’s money was derived from illegal activity.

Red Granite Pictures, currently under a cloud thanks to an ongoing federal investigation as well as asset forfeiture actions, will now be in court directly with Malaysian citizens.

On Thursday, a putative class action lawsuit was filed in New York federal court. Matthias Chang, a former political secretary in the country, and Husam Musa, currently a state assembly member, is leading a racketeering lawsuit against Red Granite, its principles Riza Aziz and Joey McFarland, as well as others like Low Jho and Goldman Sachs Group being tied to the alleged misappropriation of assets once held by Malaysia’s sovereign wealth fund, 1Malaysia Development Berdhard (1MDB).

The complaint (read here) echoes many of the allegations brought by the U.S. government in its attempt to seize more than $1 billion in allegedly diverted assets including rights and profits to the Red Granite-financed, Oscar-nominated film, The Wolf of Wall Street, directed by Martin Scorsese.

At the time of the Justice Department’s July 20 move, Red Granite stated, “To Red Granite’s knowledge, none of the funding it received four years ago was in any way illegitimate and there is nothing in today’s civil lawsuit claiming that Red Granite knew otherwise.”

The latest lawsuit claims that the defendants did indeed have knowledge that the money was tied to Malaysia. The complaint states directly that Red Granite and its principals — plus Debra Whelan Johnson, a former managing director at the powerhouse accounting firm Nigro Karlin — had “knowledge that the property involved represented the proceeds of illegal activity.”

Joey McFarland (center) with the two infamous Malaysian duo

The 1MDB fund was created in 2009 by Malaysia Prime Minister Najib Razak, the stepfather of Red Granite CEO Aziz. The misappropriation of the money allegedly happened via shell companies around the globe and a Goldman bond underwriting. Low is said to be a central figure in the diversion of 1MDB capital and the complaint again raises the way everything flowed into the United States to fund luxury items like yachts, artwork, jewelry and a blockbuster film.

After attempting to trace the complicated transactions, the Malysian plaintiffs go a bit further than the U.S. government does in talking what Aziz and Low did with the money. For example, the complaint states that “in an effort to divert attention from his business deals and lavish spending, Jho Low also publicized his charitable donations.”

The lawsuit also appears to go beyond Wolf of Wall Street with allegations that ill-gotten money went to — plural — “productions,” plus “sumptuous parties featuring celebrities.”

The complaint picks up on news reports how Red Granite’s office includes a 1927 Metropolis movie poster worth more than $1 million and that the company threw a birthday party for Leonardo DiCaprio, spending more than a million dollars on alcohol, plus a gift to him of Marlon Brando’s 1955 Academy Award statuette.

“Neither the party nor the gift to DiCaprio benefitted 1MDB in any way,” states the complaint. “Rather, Defendants gave the gift to curry favor with DiCaprio and burnish their celebrity credentials.”

DiCaprio is not a defendant, but the lawsuit also cites a Wall Street Journal story to say that he, Aziz and Low “used funds misappropriated from 1MDB to attend the World Cup in Brazil.”

The U.S. government for now is focused on specific assets, but this lawsuit with claims of fraud, conversion and racketeering, demands disgorgement of profits, trebled damages, punitive damages and costs.

Red Granite declined comment about the new lawsuit. The company has retained Boies Schiller partner Matthew Schwartz, who formerly worked in the Justice Department and prosecuted Bernie Madoff.

In a statement, Goldman Sachs responds it “received no proceeds of the offerings. We intend to vigorously contest plaintiffs’ misguided decision to include the firm as a defendant.”

 

Malaysia: Desperate Times, Desperate Measures


August 4, 2016

Malaysia: Desperate Times, Desperate Measures

by Philip Bowring

http://www.asiasentinel.com

The vulnerability of Southeast Asian countries to the combination of Chinese money and their own corrupt politicians has been laid starkly bare by a new report on Malaysia’s scandal ridden 1MDB.

Desperate to extricate himself from the massive misuse of funds supposedly raised for development by the state-backed sovereign fund, Najib has turned to China. The price has been Malaysia’s silence in the face of China’s claims to most of Malaysia’s South China Sea economic zone and failure to speak up following the Court of Arbitration’s ruling against China and its nine-dash line claim. Thwarted by the court of arbitration, China over recent months has been seeking – with considerable success – what it was clearly denied in court: by purchasing the loyalty of the littoral nations.

The Sarawak Report, an online publication with a remarkable record of access to leaked documents on thievery by leading Malaysian politicians, has revealed a plot, now close to realization, to use a Chinese state company as a conduit for dishonestly using public funds to plug gaping holes in 1MDB accounts.

These holes are the direct result of a billion dollar spending spree in the west by 1MDB on luxurious apartments, parties and the international jet set as well as direct and indirect payments to Najib himself and associates such as Jho Taek Low and Najib’s wife Rosmah Mansor’s son, Riza Aziz, from a previous marriage. It is quite likely that before long, other of the clutch of countries investigating the scandal are going to go public with charges equally as damning as those made public last week by the US Justice Department, which named “  Malaysian Official No. 1” 34 times in the document. In all, Attorney- General Loretta Lynch said, at least US$3.5 billion had been siphoned off the Malaysian taxpayer.

Now Najib is attempting to get China to cover that loss surreptitiously and in the process probably selling out his country over its rights in its own exclusive economic zone.  Chinese companies have already helped 1MDB’s cash situation by buying power stations assets at favorable prices. But those deals were aboveboard compared with the latest multi-billion ringgit scam.

According to the documents published by Sarawak Report, the plot is for China’s state owned China Communications Construction Company (CCCC) to be awarded the contract to build the high speed East Coast Rail Line (ECRL). Following official receipt of the award, CCCC is due on Aug. 5 to pay  US$850 million for certain 1MDB assets. CCCC will also assume responsibility for US$4.78 billion in interest and principal due of 1MDB obligations due between now and 2022.

In return for this enormous bailout, Malaysia’s Ministry of Finance is to undertake to pay billions to CCCC on top of the actual cost of the project.

The contract works thus:

Total contract value: MYR60 billion

Actual assumed cost of project: MYR27 billion

CCCC profit margin of 4.55 percent: MYR2.729 billion

Additional differential: MYR29.8 billion

The so-called “additional differential” is the amount needed to compensate CCCC for its support of 1MDB. Thus the Malaysian public is expected to pay double the proper price for the railway simply to bail out Najib and his corrupt associates. The amounts to be paid on behalf of 1MDB total an astonishing US$7.46 billion. This includes the debts due to Abu Dhabi’s sovereign wealth fund which is currently suing 1MDB over unpaid loan guarantees.

According to the Sarawak Report documents, the bail-out also reaches companies controlled by Jho Lo – and by mega rich former Sarawak Chief Minister Taib Mahmud, which were used to funnel money to Najib.

The deal also gives China additional advantages from which it would benefit for years to come, limiting Malaysia’s ability to open later projects to competitive bidding, notably the adoption of China’s rail technology for future major infrastructure. CCCC will get a 10-year break on GST and income taxes, allow CCCC to select suppliers and sub-contractors without reference to the government. Meanwhile the government will take responsibility for land acquisition along the route.

Publication of these details, which many in Malaysia may regard as indicating treason as well as corruption, are likely to make the Chinese nervous. It was bad enough that the US has launched criminal charges against many associated with 1MDB and which implicate Najib in all but name. The latest revelations add to the threat to Najib’s position and hence the possibility that any deal now signed with CCCC would later be repudiated by Malaysia as corruptly won.

https://i0.wp.com/static.asiawebdirect.com/m/kl/portals/borneo-hotels-com/homepage/sabah/beach-island/allParagraphs/07/image/800-5.jpg

Meanwhile it is astonishing that a ruling party that purports to represent the interests of the Malay people keeps a leader who so obviously not only has abused his position to make money for himself and associates, who has diverted vast sums from development to foreign luxuries, and, worst of all, has sold the national interest to a country that has been forcibly pressing its claims to a large part of Malaysia’s waters as well as Layang-Layang island off the coast of Sabah. It is no surprise that Malaysia’s considerable naval strength is doing nothing to halt Chinese fishing in its waters.

 

Malaysia’s Najib Razak demands Respect


August 4, 2016

Malaysia’s Najib Razak, Beset by Growing Scandal, Demands Respect

by Sara Schonhardt in Jakarta and  Yantoultra Ngui in Kuala Lumpur

http://www.wsj.com

The  Malaysian Prime Minister addresses World Islamic Economic Forum in Jakarta

JAKARTA, Indonesia—Malaysian Prime Minister Najib Razak, facing a loss of international standing as he wrestles with global investigations into alleged domestic corruption, on Tuesdayurged countries not to meddle in the affairs of his Southeast Asian nation.

“I have always been a proponent of openness to the world and collaboration, but we must insist on respect for our own sovereignty, our own laws, and our own democratically elected governments,” Mr. Najib said at the opening of a summit on Islamic finance held in neighboring Indonesia.

Mr. Najib has struggled for more than a year in a scandal centered on the state investment fund 1Malaysia Development Bhd. He used a keynote address to the World Islamic Economic Forum to restate his country’s importance in Asian trade and security arrangements and as a counterbalance to Islamic extremism.

The remarks amounted to a pointed statement of Malaysia’s traditional role as an investment-friendly, moderate Muslim mainstay. That role has been overshadowed in the past year by a steady stream of bad news around 1MDB, which Mr. Najib founded in 2009 to promote economic growth.

The three-day forum is the first big international event Mr. Najib has attended since the U.S. Justice Department filed a civil lawsuit July 20 seeking to seize assets that it said were bought with $3.5 billion misappropriated from 1MDB.

The lawsuit doesn’t name Mr. Najib, but there are 32 references to “Malaysian Official 1,” who allegedly received hundreds of millions of dollars in funds siphoned from 1MDB. People close to the investigation have said Malaysian official 1 is Mr. Najib.

“Without a doubt, the ongoing 1MDB investigation by half a dozen countries, including the U.S. and Singapore, is starting to take its toll on Najib’s credibility,” said Murray Hiebert, Deputy Director of the Southeast Asia program at the Center for Strategic and International Studies in Washington, D.C.

“But much of this toll is focused on Najib,” Mr. Hiebert said. “Malaysia itself is still largely viewed as one of the most economically successful Muslim majority countries.”

Mr. Hiebert was jailed briefly in the late 1990s for contempt of court after losing an appeal against a 1997 conviction for writing about a case brought by the wife of a court of appeal’s judge on behalf of her teenage son. Mr. Hiebert was working at the time as a journalist for the Far Eastern Economic Review, then owned by Dow Jones. Mr. Najib wasn’t the prime minister at the time.

On the international stage, Malaysia remains an important member of the 12-nation Trans-Pacific Partnership trade agreement the U.S. is pushing, and an increasingly important security partner for Washington amid tensions in the South China Sea, Mr. Hiebert said.

“Najib is still the Prime Minister and therefore he still must be given all the courtesies for a sitting head of government,’’ said Wan Saiful Wan Jan, Chief Executive of Kuala Lumpur-based think tank Institute for Democracy and Economic Affairs. “So in reality, it does not matter what people think. He is still in charge.”

Mr. Najib has been embroiled in scandal since The Wall Street Journal reported more than a year ago that hundreds of millions of dollars that originated with 1MDB flowed into his personal bank account. Several countries have since launched investigations.

Mr. Najib has said he did nothing wrong and is the target of political smears. The Malaysian Attorney-General has cleared him of wrongdoing, saying the funds that went into Mr. Najib’s account were a legal political donation from Saudi Arabia and that most of the money was returned. 1MDB has also denied wrongdoing.

Mr. Najib is still regarded as a moderate voice in the Muslim world and Malaysia sees itself as a model for developing countries, said Norshahril Saat, a fellow at the ISEAS Yusof Ishak Institute. His approach to terrorism has also earned him kudos among neighbors battling with Islamic extremism while earning rebuke from human-rights groups.

A special security law that took effect Monday widens Mr. Najib’s powers to fight Islamic terrorism but critics say it is broad and overly vague and could be used to silence critics. New York-based Human Rights Watch called for the law to be repealed.

Countries facing similar problems, including corruption, are less likely to pass judgment. But the allegations themselves continue to dog Mr. Najib and perceptions of Malaysia.

Political analyst Wan Saiful Wan Jan says the Sungai Besar and Kuala Kangsar by-elections will better show if Pakatan Harapan can unite as a viable pact or will continue to squabble over seat allocations. ― Picture by Yusof Mat Isa

“I think Malaysia is suffering in terms of international reputation,” said Wan Saiful Wan Jan (pic above). “Everywhere I go these days the question I have to answer is always about Najib and the allegations surrounding him. It is quite embarrassing and it is a distraction to the many good things we can talk about the country.”

The forum was founded in Malaysia in 2005, bringing together business leaders and government officials in the Islamic world to promote trade and investment opportunities. Malaysia is a global leader in the Islamic finance market and has more than tripled Islamic capital markets to $1.7 trillion over the past decade, Mr. Najib said.

An Islamic finance market is based on Islamic law. For instance, the system avoids investment in prohibited industries such as gambling and alcohol.

—Celine Fernandez contributed to this article.