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Taxpayers’ money secretly used to bailout 1MDB

May 25, 2018

Here’s why snake-oil salesman Arul Kanda should be jailed

* 1MDB task force holds meeting with United States FBI and DoJ
*
MoF confirms Khazanah, Bank Negara roped in to pay off 1MDB debts  

Source

Our previous article showed how the disgraced former Prime Minister Najib Razak mismanaged the country and plundered the national coffers to the brink of bankruptcy. After Prime Minister Mahathir Mohamad expressed his displeasure, the new Finance Minister Lim Guan Eng has confirmed that Malaysia is indeed saddled with over RM1 trillion debts.

One of the tricks deployed by Mr. Najib, who was also the then-finance minister, to hide the reality that RM1 trillion debts had been breached was to exclude the government-guaranteed debts. And 1MDB is a classic example of how government-guaranteed debts were being hidden and wrapped and protected under OSA (Official Secrets Act).

The declassified 1MDB audit report said the scandal-tainted firm had debt commitments totalling RM74.6 billion, inclusive of interest and borrowing costs, from November 2015 to 2039. But the best part of the scandal was reserved for Lim Guan Eng. The finance minister was shocked when he discovered that taxpayers have been bailing out 1MDB since April 2017.

Mr. Lim said – “I have been informed by Deputy Treasury-General Siti Zauyah Mohd Desa that among the most urgent items to be resolved during my first days of office is the payment of interest for 1MDB borrowings. This is because the amount of RM143.75 million is due to be paid by 1MDB on May 30.” Heck, why on earth does the government need to pay for 1MDB’s debt?

Apparently, under Najib regime, the government had signed a back-to-back guarantee over 1MDB debt. What this means is in case of failure to pay its debt, 1MDB has nothing to worry because the guarantor – Government of Malaysia – would pick up the bill. In essence, taxpayers (that’s you, due) will have to pay the billions of ringgit of debt accumulated by 1MDB.

So far, it was revealed that the finance ministry, under Najib Razak, had paid RM6.98 billion on behalf of 1MDB. The sum includes payments made to IPIC as part of a settlement agreement amounting to RM5.05 billion. Last year, then-Prime Minister cum Finance Minister Najib Razak reportedly had difficulty paying US$600 million of debt to IPIC.

Flashback – all hell breaks loose after the Malaysian fund (1MDB) defaulted on its bonds in 2016, sparking a dispute with IPIC, which asked a London court to arbitrate a claim totalling some US$6.5 billion. 1MDB claimed initially that it was “confident in its legal position” and had even submitted a “robust” response through legal counsel. Of course, 1MDB failed to prove its innocence.

The long and short of the infamous 1MDB scandal is this. The 1MDB was part of a “Ponzi Scheme“, which is the subject of money-laundering investigations in at least six countries, including the United States, Switzerland and Singapore. When the scheme was discovered and exposed, the bubble burst. It had accumulated debt of more than US$50 billion as of 2016.

The guy who has been running around telling all and sundry that 1MDB was in good health was none other than 1MDB President and CEO Arul “Anaconda” Kanda Kandasamy. The snake oil salesman is now caught with his pants down when Lim Guan Eng has instructed him to brief and clarify if 1MDB is able to pay the RM143.75 million due next week.

Even if Mr. Arul could pay the amount, which is unlikely, another chunk of RM810.21 million worth of interest is due between September and November this year. Of course, the snake oil salesman who is currently barred from leaving the country is nowhere to be seen, let alone speaks out against the bombshell that 1MDB has actually no money at all to pay its debts.

If Najib was guilty of secretly bailing out his “Ponzi Scheme” project by hiding it under “red files”, accessible only to certain parties, Arul was guilty of deceiving and misleading investors and financial markets by lying through his teeth. As far back as 2015, Mr. Arul had lied about the cash in the state investment firm’s BSI Singapore bank account.

He updated the 1MDB Board that the balance of US$939,874,085 had been redeemed and had been held as “cash” since 31st December 2014. On March 11th 2015, Mr. Najib himself confirmed that the remaining US$1.103 billion had already been “redeemed” from Brazen Sky’s alleged off shore fund in the Cayman Islands – stating that it was now being “kept in US currency” at BSI Bank Limited, Singapore.

In reality, not only there was no “CASH”, but documents supplied by 1MDB relating to its Brazen Sky Limited account in Singapore were false bank statements. After exposed by Sarawak Report, Arul Kanda, with his pants down, made a series of retractions before clarified that the assets held by BSI were in the form of “units” instead of “cash”.

Arul conveniently blamed it on “miscommunication”, when he had proudly telling all and sundry that 1MDB owned assets worth RM50 billion versus RM42 billion in liabilities. As it turned out, the so-called US$1.103 billion cash had been pledged to guarantee another loan by Deutsche Bank. Essentially, Arul knew that a new hole was dug to cover another hole of debt.

Snake oil salesman Arul, together with crook Najib, also trumpeted about TRX (Tun Razak Exchange). The Exchange 106 tower will be the tallest tower in Malaysia upon completion in 2018, says them. But after the stunning loss of his boss Najib in the 14th general election, it was revealed that TRX City Sdn Bhd “did not see a single cent” of funding worth US$3 billion (RM11.9 billion) raised in 2013.

The fact remains that since he came on board, not a single 1MDB annual reports has been released. If the company was indeed in the pink of health, there was no compelling reason not to publish its annual reports. Even during the May 9th election campaign, Arul was actively hitting the road, continued to scam and con people that 1MDB scandal was over.

This bald Arul boldly fooled the people that the 1MDB debt problems have been solved. What he didn’t tell the people was that the government has been bailing out the company; diverting taxpayers’ hard-earned money to cover gigantic debts accumulated after the “Ponzi Scheme” was discovered, exposed and burst. Arul Kanda “Anaconda” Kandasamy deserves to be jailed, and the keys thrown away.

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