The Clueless PM And 1MDB’s Nenek Tua Business Model

By admin-s Last updated Apr 22, 2014

Folks, the Board of Directors of 1MDB say they have lost control over RM7.5 Billion of taxpayer guaranteed money.

OutSyed the Box

Do you folks recall Najib Razak launching Syed Mokhtar Bukhary’s RM4.0 Billion Burau Bay project on 30 March, 2014? Here is the New Straits Times :

WORLD CLASS: Najib launches Perdana Quay that includes commercial and leisure developments

LANGKAWI’S place on the world tourism map is set to strengthen, with an investment from Tradewinds Corporation Bhd (TCB). The Perdana Quay project, which spans a period of 10 years, will see the emergence of tourism products, such as hotels and property development tagged at a whopping RM4 billion. It was launched by Prime Minister Datuk Seri Najib Razak yesterday.

Well some Arabs are claiming that the Burau Bay project is theirs. The way they are playing it, Syed Mokhtar and Najib are working for them. Here be the news from Arabian Business :

1. Alabbar firm launches $1.2bn Malaysia island project

By Andy Sambidge, Wednesday, 9 April 2014

Tradewinds Corporation, chaired by Emaar chief Mohamed Alabbar, on Wednesday unveiled the masterplan of its flagship $1.2 billion project Perdana Quay in Langkawi.Malaysian Prime Minister Najib Razak unveiled the masterplan ..in the presence of Dr Mahathir, Mukhriz Mahathir and Alabbar.

Mohamed Alabbar

Here is another foreign newspaper (benchmarkdaily.com) writing in the same fashion :

2. Alabbar firm Tradewinds launches AED4.5 bn hospitality project in Malaysia

Tradewinds Corporation, the premier leisure and hospitality owner-operator in Malaysia chaired by Mohamed Alabbar and backed by The Albukhary Group, has unveiled the masterplan of its flagship project Perdana Quay, with a gross development value of AED 4.5 billion ($1.2 billion), in Langkawi.

So is Tradewinds an Alabbar company now? And the Burau Bay project is also theirs? The Malaysians are just sidekicks? Pasal apalah hangpa semua bodoh macam ini? From previous experiences strange things happen when Arabs are involved.

Anyway 1MDB is hitting the headlines for all the wrong reasons again. I have been highlighting 1MDB for five years now – ever since 1MDB was set up under dubious circumstances. It looks like things are getting worse.

For this post, just bear in mind that today’s USD / RM exchange rate = RM3.2529 (RM3.25 lah) derived from the Net.

There are strange and inexplicable things going on at 1MDB. Firstly 1MDB has changed their auditors three times in FIVE years since 2009. The latest auditor onboard is Deloitte. The previous auditor KPMG was replaced because according to 1MDB : “…KPMG could not conclude the accounts”.

What the hell does that mean? Why couldnt KPMG ‘conclude the accounts‘?

Despite not doing any real business 1MDB has also posted profits of hundreds of millions of Ringgit. They achieved this by revaluing their land holdings. Here is The Star :

1MDB revaluation gains for three years in a row

1MDB has revalued its investment properties for three years in a row
netting RM2.7bil in revaluation gains
revalue investment property portfolio annually
common for property developers to do so once 3 or 5 years
2013, 1MDB posted huge revaluation gain of RM2.7bil, RM569.9mil in previous year.

This is the nenek tua business model. How can 1MDB enjoy such a high revaluation of their land? Simple. It was obviously sold to them at very cheap rates. If it was sold at full market value, there is no way they can revalue their land every year.

And this is a paper profit. Leopards can never gain stripes. Neither can they lose their spots. There are folks in 1MDB who know about paper profits and paper losses. They have used these tricks before. Malaysians have such short memories.

The following are very confusing, very poorly written and very poorly edited stories written by The Star. I have tried to decipher them again :

The Management of 1MDB (and their Board of Directors of course) has “invested” US$2.3 Billion in the Cayman Islands.

Now the Directors of 1MDB say this : “The directors have decided to classify the US$2.3bil (RM7.5 Billion) placed in the Cayman Islands as an “asset for sale” after concluding that they were unable to exercise control or significant influence over the SPC managing the money”

Folks, the Board of Directors of 1MDB say they have lost control over RM7.5 Billion of taxpayer guaranteed money. Who the hell are these SPCs that they do not listen to the owners of the funds?

Shouldn’t the BOD of 1MDB resign? You have lost control of RM7.5 Billion of taxpayer guaranteed funds?

They make an easy statement as if nothing has happened : “they were unable to exercise control or significant influence over the SPC managing the money..”

There is more to this story. Above the Board of Directors sits a Board of Advisors which comprises among others our very own clueless PM and dodos who have caused billions of losses before. Plus a bunch of Arabs. Pasal apa pula selalu bawa masuk pak arab jadi partner? From previous experiences strange things happen when Arabs are involved.

So who calls the shots at 1MDB? The Board of Advisors, the Board of Directors, the Management? Who? And here is the soalan cepu mas, when things go wrong who is answerable? Who ends up carrying the baby?