Will Malaysia have to pay for 1MDB guarantees sooner than later?
Umar Mukhtar
The report by Business Times of Singapore on the 13th of May that the Deutsche Bank-led loan to 1MDB of USD975 million may be called for payment by the syndicated lenders earlier than the due date is worrying. The loan is fully guaranteed by the Malaysian government. It is due some time late this year but may be recalled earlier.
The reason being simply that lenders are taking opportunity of ‘incomplete’ securitising documents to protect themselves. They are already panicky and nervous because 1MDB is showing signs of inability to meet its loan commitments and the fact that this loan was also secured by 1MDB’s wholly-owned subsidiary Brazen Sky’s deposit of USD1.1 billion in private Swiss bank, BSI Singapore, which carries a huge question mark.
If the money is there, it should be not much of a problem to respond to the lenders’ threatening call. If it is not there, as rumored by the banking community, not Dr Mahathir or the teh tarik crowd, voila, Najib is in deep trouble. Even if there is no earlier call, it can be a problem to settle the loan with 1MDB’s present financial health. The point is the lenders can call early, and 1MDB apparently has no money.
So we may have to pay for Najib’s folly. How the government can guarantee the loan with our money without Parliament knowing about it is a lucanae which should be looked into. Used to be when I was working, any type of financial instruments that carry the Rakyat’s exposure must be tabled in Parliament. Who put a stop to that? Mahathir? Really? Why did he do that, I wonder. And I guess UMNO’s cyber troopers and Ahmad Maslan may also have to eat their words.
Borrowing billions without even knowing how to complete the documentation is astonishing for a company that wants to win the trust of Malaysians and the likes of Tabung Haji. No wonder the multi-billion dollar TRX development is not off the ground yet and the multi-billion dollar power project 3B may be lost to competition because of delays. Highly-paid executives with bird brains. Morons.
Assuming 1MDB can’t pay when the loan is due later this year, unless the Ananda Krishnans of the world come in as white knights with their demand for a pound of flesh, the poor struggling Malaysians will have to fork it out through increased taxes, lesser development projects and, maybe, a higher GST. Then it will be sayonara, Najib.
On the other hand, if Dr Mahathir, Tony Phua, Rafizi and the Sarawak Report are just being naughty, a rabbit will pop out of the hat and Najib will be PM for life! That rabbit will have to be 1MDB’s though and not some weird book entry. People will still ask where did 1MDB’s money go.
USD975 million translates to more than 3,600 million Ringgit, for the information of parroting cyber troopers hired recently. That’s enough to increase their unemployed graduates pay by more than 100,000%, two million weird hair-dos and but only 6 new jetliners, without cost of maintenance and crew. Worth saving?
