1MDB says Dr M’s shifting allegations ‘perplexing’
(Malay Mail Online) – 1Malaysia Development Bhd (1MDB) accused one of its chief critics Tun Dr Mahathir Mohamad today of constantly shifting his allegations against the debt-laden state-owned fund.
1MDB pointed out that the former prime minister first claimed that RM42 billion was “missing”, and that after the company gave a breakdown on how the money was spent, Dr Mahathir then resorted to saying yesterday that “vast amounts of money have disappeared”.
“As we have stated before, this continuous shift in numbers and allegations is perplexing,” 1MDB said in a statement.
Dr Mahathir wrote on his blog yesterday that the arrest of former PetroSaudi International (PSI) top executive Xavier Justo in Thailand on accusations of blackmail cannot negate the fact that Putrajaya had told Parliament that 1MDB had issued a US$1.9 billion (RM7.1 billion) loan to a PSI subsidiary during the time of their short-lived joint venture.
1MDB said in response today that it had invested US$1.83 billion cash in murabaha notes issued by JV Co, a company that was then fully owned by PetroSaudi following the termination of the joint venture in March 2010.
Then the entire amount was repaid in June 2012 by converting it into PetroSaudi Oil Services Limited shares for a value of US$2.22 billion.
After that, 1MDB said it sold its shares for US$2.318 billion and received fund units in a Cayman registered fund that were owned via its 100 per cent subsidiary, Brazen Sky, and held in BSI Bank Singapore.
“Accordingly, 1MDB invested a total of US$1.83 billion with PetroSaudi as murabaha notes, and ultimately received US$2.318 billion of fund units, representing a gain over time of US$488 million,” said 1MDB, adding that its relationship with PetroSaudi ended in 2012.
1MDB also pointed out that the murabaha notes were guaranteed by PetroSaudi and hence, had lower risk than equity.
Dr Mahathir also accused 1MDB yesterday of overpaying for its independent power producers (IPPs), citing the fall in Tenaga Nasional Berhad shares in relation to its planned takeover of 1MDB’s 3B power plant project in Negri Sembilan.
1MDB stressed that it only acquires assets that are believed to hold long-term value.
“In this particular case, 1MDB purchased power plants from the original private sector owners i.e. first generation IPP investors, who were granted lucrative, long term, fixed price contracts during the time Tun Mahathir was Prime Minister,” said 1MDB.
“In particular, it is important to note that we acquired our first energy assets in 2012, and have built this into the second largest independent power producer in Malaysia with a strong presence in international markets within three years. In total, 1MDB has successfully consolidated three independent companies with 13 power plants and 5594MW of net generating capacity,” it added.
1MDB further told Dr Mahathir and opposition politicians that their repeated allegations and “misleading” statements significantly affected the company’s ability to conduct its business and damaged the economy at large.
“Furthermore, such allegations negatively impact the implementation of the 1MDB rationalisation plan announced on 29 May 2015, which is intended to reduce the company’s debt levels and ensure that maximum value is generated for our 100 per cent ultimate shareholder, the government of Malaysia,” said 1MDB.
